Improving Investment Research for Small and Emerging Issuers Act

Bill: 115-hr-6139
Sponsor: full_name: Rep. Huizenga, Bill [R-MI-2]
Introduced: 2018-06-19
Policy area: Finance and Financial Sector
Subjects: Congressional oversight

Financial services and investments

Government studies and investigations

Minority and disadvantaged businesses

Research administration and funding

Securities

Securities and Exchange Commission (SEC)

Small business

Women in business
Latest action: action_date: 2018-07-11
text: Received in the Senate and Read twice and referred to the Committee on Banking, Housing, and Urban Affairs.

Summaries:
action_date: 2018-06-19
action_desc: Introduced in House
text: <p><b>Improving Investment Research for Small and Emerging Issuers Act </b></p> <p>This bill requires the Securities and Exchange Commission to report on investment research regarding small issuers, including emerging growth companies and companies considering initial public offerings. The report must: (1)&nbsp;include topics such as the availability of such research and potential conflicts of interest relating to its production and distribution, and (2) make recommendations for increasing small-issuer investment research. </p>

action_date: 2018-07-10
action_desc: Passed House without amendment
text: <p><b>Improving Investment Research for Small and Emerging Issuers Act </b></p> <p>(Sec. 2) This bill requires the Securities and Exchange Commission to report on investment research regarding small issuers, including emerging growth companies and companies considering initial public offerings. The report must: (1)&nbsp;include topics such as the availability of such research and potential conflicts of interest relating to its production and distribution, and (2) make recommendations for increasing small-issuer investment research. </p>

tv_txt: I 115th CONGRESS 2d Session H. R. 6139 IN THE HOUSE OF REPRESENTATIVES June 19, 2018 Mr. Huizenga (for himself and Ms. Maxine Waters of California ) introduced the following bill; which was referred to the Committee on Financial Services A BILL To require the Securities and Exchange Commission to carry out a study to evaluate the issues affecting the provision of and reliance upon investment research into small issuers.

1. Short title This Act may be cited as the Improving Investment Research for Small and Emerging Issuers Act . 2. Research study (a) Study required The Securities and Exchange Commission shall conduct a study to evaluate the issues affecting the provision of and reliance upon investment research into small issuers, including emerging growth companies and companies considering initial public offerings. (b) Contents of study The study required under subsection (a) shall consider— (1) factors related to the demand for such research by institutional and retail investors; (2) the availability of such research, including— (A) the number and types of firms who provide such research; (B) the volume of such research over time; and (C) competition in the research market; (3) conflicts of interest relating to the production and distribution of investment research; (4) the costs of such research; (5) the impacts of different payment mechanisms for investment research into small issuers, including whether such research is paid for by— (A) hard-dollar payments from research clients; (B) payments directed from the client’s commission income (i.e., soft dollars ); or (C) payments from the issuer that is the subject of such research; (6) any unique challenges faced by minority-owned, women-owned, and veteran-owned small issuers in obtaining research coverage; and (7) the impact on the availability of research coverage for small issuers due to— (A) investment adviser concentration and consolidation, including any potential impacts of fund-size on demand for investment research of small issuers; (B) broker and dealer concentration and consolidation, including any relationships between the size of the firm and allocation of resources for investment research into small issuers; (C) Securities and Exchange Commission rules; (D) registered national securities association rules; (E) State and Federal liability concerns; (F) the settlement agreements referenced in Securities and Exchange Commission Litigation Release No. 18438 (i.e., the Global Research Analyst Settlement ); and (G) Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU, as implemented by the European Union ( EU ) member states ( MiFID II ). (c) Report required Not later than 180 days after the date of the enactment of this Act, the Securities and Exchange Commission shall submit to Congress a report that includes— (1) the results of the study required by subsection (a); and (2) recommendations to increase the demand for, volume of, and quality of investment research into small issuers, including emerging growth companies and companies considering initial public offerings.

tv_txt: IIB 115th CONGRESS 2d Session H. R. 6139 IN THE SENATE OF THE UNITED STATES July 11, 2018 Received; read twice and referred to the Committee on Banking, Housing, and Urban Affairs AN ACT To require the Securities and Exchange Commission to carry out a study to evaluate the issues affecting the provision of and reliance upon investment research into small issuers.

1. Short title This Act may be cited as the Improving Investment Research for Small and Emerging Issuers Act . 2. Research study (a) Study required The Securities and Exchange Commission shall conduct a study to evaluate the issues affecting the provision of and reliance upon investment research into small issuers, including emerging growth companies and companies considering initial public offerings. (b) Contents of study The study required under subsection (a) shall consider— (1) factors related to the demand for such research by institutional and retail investors; (2) the availability of such research, including— (A) the number and types of firms who provide such research; (B) the volume of such research over time; and (C) competition in the research market; (3) conflicts of interest relating to the production and distribution of investment research; (4) the costs of such research; (5) the impacts of different payment mechanisms for investment research into small issuers, including whether such research is paid for by— (A) hard-dollar payments from research clients; (B) payments directed from the client’s commission income (i.e., soft dollars ); or (C) payments from the issuer that is the subject of such research; (6) any unique challenges faced by minority-owned, women-owned, and veteran-owned small issuers in obtaining research coverage; and (7) the impact on the availability of research coverage for small issuers due to— (A) investment adviser concentration and consolidation, including any potential impacts of fund-size on demand for investment research of small issuers; (B) broker and dealer concentration and consolidation, including any relationships between the size of the firm and allocation of resources for investment research into small issuers; (C) Securities and Exchange Commission rules; (D) registered national securities association rules; (E) State and Federal liability concerns; (F) the settlement agreements referenced in Securities and Exchange Commission Litigation Release No. 18438 (i.e., the Global Research Analyst Settlement ); and (G) Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU, as implemented by the European Union ( EU ) member states ( MiFID II ). (c) Report required Not later than 180 days after the date of the enactment of this Act, the Securities and Exchange Commission shall submit to Congress a report that includes— (1) the results of the study required by subsection (a); and (2) recommendations to increase the demand for, volume of, and quality of investment research into small issuers, including emerging growth companies and companies considering initial public offerings.

Passed the House of Representatives July 10, 2018. Karen L. Haas, Clerk

tv_txt: I 115th CONGRESS 2d Session H. R. 6139 IN THE HOUSE OF REPRESENTATIVES AN ACT To require the Securities and Exchange Commission to carry out a study to evaluate the issues affecting the provision of and reliance upon investment research into small issuers.

1. Short title This Act may be cited as the Improving Investment Research for Small and Emerging Issuers Act . 2. Research study (a) Study required The Securities and Exchange Commission shall conduct a study to evaluate the issues affecting the provision of and reliance upon investment research into small issuers, including emerging growth companies and companies considering initial public offerings. (b) Contents of study The study required under subsection (a) shall consider— (1) factors related to the demand for such research by institutional and retail investors; (2) the availability of such research, including— (A) the number and types of firms who provide such research; (B) the volume of such research over time; and (C) competition in the research market; (3) conflicts of interest relating to the production and distribution of investment research; (4) the costs of such research; (5) the impacts of different payment mechanisms for investment research into small issuers, including whether such research is paid for by— (A) hard-dollar payments from research clients; (B) payments directed from the client’s commission income (i.e., soft dollars ); or (C) payments from the issuer that is the subject of such research; (6) any unique challenges faced by minority-owned, women-owned, and veteran-owned small issuers in obtaining research coverage; and (7) the impact on the availability of research coverage for small issuers due to— (A) investment adviser concentration and consolidation, including any potential impacts of fund-size on demand for investment research of small issuers; (B) broker and dealer concentration and consolidation, including any relationships between the size of the firm and allocation of resources for investment research into small issuers; (C) Securities and Exchange Commission rules; (D) registered national securities association rules; (E) State and Federal liability concerns; (F) the settlement agreements referenced in Securities and Exchange Commission Litigation Release No. 18438 (i.e., the Global Research Analyst Settlement ); and (G) Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU, as implemented by the European Union ( EU ) member states ( MiFID II ). (c) Report required Not later than 180 days after the date of the enactment of this Act, the Securities and Exchange Commission shall submit to Congress a report that includes— (1) the results of the study required by subsection (a); and (2) recommendations to increase the demand for, volume of, and quality of investment research into small issuers, including emerging growth companies and companies considering initial public offerings.

Passed the House of Representatives July 10, 2018. Karen L. Haas, Clerk.

tv_txt: IB Union Calendar No. 627 115th CONGRESS 2d Session H. R. 6139 [Report No. 115–808] IN THE HOUSE OF REPRESENTATIVES June 19, 2018 Mr. Huizenga (for himself and Ms. Maxine Waters of California ) introduced the following bill; which was referred to the Committee on Financial Services July 10, 2018 Committed to the Committee of the Whole House on the State of the Union and ordered to be printed A BILL To require the Securities and Exchange Commission to carry out a study to evaluate the issues affecting the provision of and reliance upon investment research into small issuers.

1. Short title This Act may be cited as the Improving Investment Research for Small and Emerging Issuers Act . 2. Research study (a) Study required The Securities and Exchange Commission shall conduct a study to evaluate the issues affecting the provision of and reliance upon investment research into small issuers, including emerging growth companies and companies considering initial public offerings. (b) Contents of study The study required under subsection (a) shall consider— (1) factors related to the demand for such research by institutional and retail investors; (2) the availability of such research, including— (A) the number and types of firms who provide such research; (B) the volume of such research over time; and (C) competition in the research market; (3) conflicts of interest relating to the production and distribution of investment research; (4) the costs of such research; (5) the impacts of different payment mechanisms for investment research into small issuers, including whether such research is paid for by— (A) hard-dollar payments from research clients; (B) payments directed from the client’s commission income (i.e., soft dollars ); or (C) payments from the issuer that is the subject of such research; (6) any unique challenges faced by minority-owned, women-owned, and veteran-owned small issuers in obtaining research coverage; and (7) the impact on the availability of research coverage for small issuers due to— (A) investment adviser concentration and consolidation, including any potential impacts of fund-size on demand for investment research of small issuers; (B) broker and dealer concentration and consolidation, including any relationships between the size of the firm and allocation of resources for investment research into small issuers; (C) Securities and Exchange Commission rules; (D) registered national securities association rules; (E) State and Federal liability concerns; (F) the settlement agreements referenced in Securities and Exchange Commission Litigation Release No. 18438 (i.e., the Global Research Analyst Settlement ); and (G) Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU, as implemented by the European Union ( EU ) member states ( MiFID II ). (c) Report required Not later than 180 days after the date of the enactment of this Act, the Securities and Exchange Commission shall submit to Congress a report that includes— (1) the results of the study required by subsection (a); and (2) recommendations to increase the demand for, volume of, and quality of investment research into small issuers, including emerging growth companies and companies considering initial public offerings.

July 10, 2018 Committed to the Committee of the Whole House on the State of the Union and ordered to be printed