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 last Friday 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.
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, Morningstar’s director of global ETF research, told ThinkAdvisor in a Monday phone interview that the law “puts ETFs on equal footing with other securities,” with broker-dealers “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.