A bill that would foster the publishing of research on exchange traded funds (ETFs) was reintroduced in the U.S. House of Representatives by Reps. French Hill (R-AR) and Bill Foster (D-IL).
The Fair Access to Investment Research Act directs the Securities and Exchange Commission (SEC) to provide a safe harbor for research reports on ETFs. A similar bill was introduced in the U.S. Senate by Sens. Dean Heller (R-NV) and Gary Peters (D-MI).
The ETF market has exploded since the product was introduced in the 1990s. In the United States, there are currently about 1,500 ETFs totaling $2.1 trillion in assets. Due to the anomalies in securities laws, however, most broker-dealers do not publish research on ETFs.
“The use of ETFs continues to grow at a rapid rate,” Hill said. “However, this complex market lacks research and information that could greatly benefit consumers. I always will advocate for commonsense legislation that promotes capital formation, removes unnecessary burdens, and improves investor access to information.”
Hill first introduced the bill last June and it passed in the House, but was not signed into law.
“I am proud to introduce legislation that will strengthen our financial system with Congressman Hill,” Foster said. “These funds’ popularity requires us to work together to make sure investors have access to the information they need to make sound investment decisions. This legislation would create transparency in financial markets that will ultimately benefit consumers.”