ETF Safe Harbor Bill Passes House Committee

WASHINGTON — Legislation that would allow broker/dealers to provide research on exchange-traded funds (ETFs) to their clients has cleared the House Financial Services Committee by an overwhelming vote.

H.R 2356, the Fair Access to Investment Research Act would provide a safe harbor that would allow advisors and broker/dealers to provide data on ETFs to their clients without these reports being considered “offers” under the Securities and Exchange Commission (SEC) Act of 1933.

The bill was sponsored by Reps. French Hill, R-Ark., and John Carney, D-Del. It passed the full committee last week by an overwhelming vote of 48-9.

Carney said the bill “is a good example of a simple fix that just makes sense.”

Hill, a former broker, said the bill mirrors other research safe harbors implemented by the SEC, will provide clarity to the law and will “allow investors to access useful information in this rapidly growing market.”

Hill noted that over the past 30 years, ETFs have grown from about 100 funds with $100 billion in assets to more 1,300 funds with $1.8 trillion in assets.

“However, due to anomalies in the securities laws and regulations, most broker/dealers do not publish research on ETFs, despite their growth in popularity,” Hill added.

InsuranceNewsNet Washington Bureau Chief Arthur D. Postal has covered regulatory and legislative issues for more than 30 years. He can be reached at [email protected].

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InsuranceNewsNet Washington Bureau Chief Arthur D. Postal has covered regulatory and legislative issues for more than 30 years. He can be reached at [email protected].