On Thursday, April 28, 2016, the House will complete consideration of H.R. 5019, the Fair Access to Investment Research Act of 2016, under suspension of the rules. H.R. 5019 was introduced on April 21, 2016, by Rep. French Hill (R-AR), and was referred to the Committee on Financial Services.
H.R. 5019 establishes a safe harbor that would allow broker-dealers to issue research reports that cover Exchange Traded Funds (ETFs), so that these reports are not considered “offers” under the securities law. The research reports would need to meet certain requirements to be eligible for this safe harbor. The bill requires the SEC to finalize the rules within 180 days and if the deadline is not met, an interim safe harbor will take effect until the SEC’s completes its rules.
An ETF is an investment company whose shares are traded intraday on stock exchanges at market-determined prices. Investors may buy or sell ETF shares through a broker or in a brokerage account just as they would the shares of any publicly traded company. Investor interest in ETFs has increased significantly in recent years, with 5.7 million U.S. households holding ETF shares in 2013. Despite their growing popularity and increasing importance to retail investors, anomalies in the SEC’s safe harbor rules have discouraged most broker-dealers from publishing research regarding ETFs. H.R. 5019 bill grants certain reports on ETFs safe-harbor status. 
According to the bill sponsor, “This commonsense bill, which mirrors other research safe harbors implemented by the SEC, will provide clarity to the law and allow investors to access useful information in this rapidly growing market. I appreciate the support of Congressman Carney and thank the Committee for its efforts to promote capital formation, remove unnecessary burdens, and grow jobs and the economy.”
H.R. 5019 is nearly identical to H.R. 2356, which was included as Title II of H.R. 1675, the Capital Markets Improvement Act of 2016, which passed the House 265 to 159 on February 3, 2016. H.R. 2356 allows the SEC 120 days to issue an implementing rule, while H.R. 5019 allows the SEC 180 days to do so.
 See House Report 114-401 at 2.
 See Rep. French Hill Press Release, “Hill, Carney Introduce Bipartisan Bill to Increase Consumer Access to Investment Information,” May 18, 2015.
A Congressional Budget Office (CBO) cost estimate is currently not available.
For questions or further information please contact John Huston with the House Republican Policy Committee by email or at 6-5539.