To amend the Securities Act of 1933 to expand the research report exception to include reports about any issuer that undertakes a proposed offering of public securities.
Sponsors
Legislative Progress
ReportedReported with an amendment, committed to the Committee of the …
Mr. Williams of Texas (for himself and Mr. Fields) introduced …
Summary
What This Bill Does
The Securities Research Modernization Act removes restrictions on when investment banks and broker-dealers can publish research reports about companies issuing securities. Currently, these "research report exceptions" only apply to emerging growth companies during their IPO process. This bill extends these exceptions to cover any company issuing any type of securities, not just small, fast-growing companies issuing common stock.
Who Benefits and How
Investment banks and broker-dealers benefit by being able to publish research reports about all securities offerings without facing the same regulatory restrictions that currently apply. This gives them more flexibility to generate research revenue and support their underwriting activities. Large, established companies seeking to issue securities (bonds, preferred stock, or new equity) also benefit because they can receive research coverage that was previously only available to emerging growth companies. Securities analysts and research departments gain expanded opportunities to publish during offering periods.
Who Bears the Burden and How
Retail investors may face increased exposure to potentially biased research during securities offerings, as the rules were originally designed to prevent conflicts of interest where banks promote stocks they are underwriting. The SEC may find it harder to police conflicts of interest in research reports since more offerings will qualify for the exception. Consumer protection and investor advocacy groups have historically opposed such expansions, arguing they weaken protections put in place after the dot-com bubble scandals.
Key Provisions
- Amends Section 2(a)(3) of the Securities Act of 1933 to replace "emerging growth company" with "issuer," applying the research exception to all companies
- Replaces "common equity" with "any" securities, extending the exception to bonds, preferred stock, and other security types
- Removes the restriction that limited these exceptions to just emerging growth company IPOs
- Maintains the basic structure of the JOBS Act research exception but dramatically expands its scope
Evidence Chain:
This summary is derived from the structured analysis below. See "Detailed Analysis" for per-title beneficiaries/burden bearers with clause-level evidence links.
Primary Purpose
Expands the research report exception in securities law from applying only to emerging growth companies to all issuers undertaking public securities offerings
Policy Domains
Legislative Strategy
"Deregulate securities research by removing restrictions on broker-dealer research reports during IPO and other offering processes"
Likely Beneficiaries
- Investment banks and broker-dealers (can publish research on more offerings without safe harbor restrictions)
- All companies seeking to issue securities (not just emerging growth companies)
- Institutional investors (receive more research coverage)
- Securities research firms and analysts
Likely Burden Bearers
- Retail investors (potentially exposed to more promotional research during offerings)
- SEC enforcement division (harder to police conflicts of interest in research)
- Investor protection advocates
Bill Structure & Actor Mappings
Who is "The Secretary" in each section?
Key Definitions
Terms defined in this bill
Any type of securities being offered (replaces 'common equity' in the Securities Act of 1933)
Any company undertaking a proposed offering of public securities (replaces 'emerging growth company' in the Securities Act of 1933)
We use a combination of our own taxonomy and classification in addition to large language models to assess meaning and potential beneficiaries. High confidence means strong textual evidence. Always verify with the original bill text.
Learn more about our methodology