The Securities and Exchange Commission (SEC) adopted Friday guidelines promoting research on mutual funds, exchange‑traded funds, registered closed-end funds, business development companies, and similar covered investment funds.
The rules and amendments, under the Fair Access to Investment Research Act of 2017 (FAIR Act), would reduce obstacles to providing research on investment funds by harmonizing the treatment of such research with research on other public companies.
“These rules will promote greater access to research for investors in funds,” SEC Chairman Jay Clayton said. “Our response to this legislation is crafted to facilitate more informed decision making, which in turn should improve the quality of a market that has become important to our Main Street investors.”
According to the SEC, if the conditions in the rule are satisfied, the publication or distribution of a covered investment fund research report would be deemed not to be an offer for sale or offer to sell the covered investment fund’s securities for purposes of sections 2(a)(10) and 5(c) of the Securities Act of 1933.
Officials said establishing the revisions creates a safe harbor for a broker or dealer to publish or distribute research reports on investment funds under certain conditions, noting the safe harbor is similar to a regulatory safe harbor that currently exists for research reports about public companies.