Broker-dealers will soon be able to offer investors research on exchange-traded funds, just like for plain equities or fixed-income securities.
President Trump has signed S. 327, the Fair Access to Investment Research Act of 2017, into law, allowing broker-dealers to provide research reports to clients on exchanged-traded funds.
According to Think Advisor, the Senate passed the measure in early September. In introducing the legislation, Sen. Dean Heller, R-Nev., explained that securities laws provide legal protections for broker-dealers to provide research reports for several asset classes such as listed stocks and corporate debt – but not for ETFs.
The Fair Access to Investment Research Act creates parity in the law by allowing broker-dealers to publish public research reports on ETFs, which millions of households invest in, Heller added.
Ben Johnson, Morningstars director of global ETF research, told ThinkAdvisor in a Monday phone interview that the law puts ETFs on equal footing with other securities, with BDs allowed to publish research now on ETFs.
The more intelligent people you have looking at these securities, the better it is for investors, Johnson added.