The SEC proposed two new rules intended to encourage broker-dealers to publish research reports on certain SEC-registered investment companies.
Under proposed Securities Act Rule 139b, a covered investment fund research report would not be considered an "offer for sale or offer to sell a security that is the subject of an offering," even if the broker-dealer is participating or may participate in a registered offering of the covered investment fund's securities. The proposed rule is generally consistent with the current "safe harbor" under Securities Act Rule 139 that allows broker-dealers to publish and distribute research reports on corporate issuers without such reports being considered offers for sale. In addition, the SEC proposed new Investment Company Act Rule 24b-4, which would exempt covered investment fund research reports from ICA Section 24(b) filing requirements, except to the extent such reports are otherwise not subject to the content standards of self-regulatory organization rules related to research reports.
The SEC also proposed a conforming amendment to Regulation M Rule 242.101.
The rules and amendment were proposed in accordance with the Fair Investment Research Act. SEC Chair Jay Clayton said that the proposals are "intended to provide investors with greater access to research to aid them in making investment decisions."
Comments must be submitted within 30 days of publication of the proposal in the Federal Register.
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