H.R. 3672: Securities Research Modernization Act

This bill, titled the Securities Research Modernization Act, proposes amendments to the Securities Act of 1933 regarding the provision of research reports related to public securities. The key points of the bill are as follows:

Modification of Research Report Eligibility

The main change is to expand the types of entities for which research reports can be provided. Specifically, the bill aims to:

• Replace the term “emerging growth company” with “issuer.” This means that any entity that is looking to offer public securities could be the subject of research reports.
• Broaden the scope from “common equity” to “any” type of securities, allowing research reports to cover a wider range of financial instruments beyond just common stocks.

Impact on Research Reports

By allowing reports on all issuers undertaking proposed public offerings, the bill is intended to enhance the availability of research information for investors. This could potentially lead to:

• More comprehensive analysis and information on a wider variety of companies, including those not traditionally classified as emerging growth companies.
• Increased competition among research providers, which may result in more detailed and frequent research publications.

Goals of the Legislation

The bill aims to modernize outdated regulatory provisions regarding securities research. The overarching objective is to:

• Encourage investment in a broader range of companies by providing better access to information.
• Support the capital formation process by making it easier for different types of companies to attract investors through improved research availability.

Possible Consequences

While the bill primarily modifies existing provisions, it could lead to various outcomes, including:

• Enhanced transparency in the securities market due to increased research output.
• The potential for more informed investment decisions as a result of broader access to research on diverse issuers.

Relevant Companies

None found.