[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 2141 Introduced in Senate (IS)]
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118th CONGRESS
1st Session
S. 2141
To require the Securities and Exchange Commission to extend a no-action
determination relating to the provision of research services by broker-
dealers, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
June 22, 2023
Mr. Moran introduced the following bill; which was read twice and
referred to the Committee on Banking, Housing, and Urban Affairs
_______________________________________________________________________
A BILL
To require the Securities and Exchange Commission to extend a no-action
determination relating to the provision of research services by broker-
dealers, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Increasing Access to Adviser
Information Act''.
SEC. 2. EXTENSION OF NO-ACTION DETERMINATION; STUDY.
(a) Findings.--Congress finds the following:
(1) In 2017, staff of the Securities and Exchange
Commission (referred to in this section as the ``Commission'')
first granted temporary no-action relief regarding compliance
with the provisions related to research in the Markets in
Financial Instruments Directive II (commonly referred to as
``MiFID II'') and related implementing rules and regulations,
before the implementation of European rules designed to protect
European investors from excessive costs and conflicts of
interest.
(2) Staff of the Commission did not engage in any
meaningful cost-benefit analysis of the issues raised by the
no-action relief described in paragraph (1) either before or
after the granting of that relief.
(3) In 2019, staff of the Commission revised and extended
the temporary no-action relief described in paragraph (1),
again without any meaningful cost-benefit analysis of the
issues raised by the no-action relief either before or after
the granting of that relief.
(4) As of the date of enactment of this Act, there are
approximately 15,300 registered investment advisers, including
affiliates that provide the vast majority of investment
research.
(5) The Commission has received complaints from investors
and investor advocacy groups expressing concerns with the no-
action relief described in paragraph (1), as it exists on the
date of enactment of this Act.
(6) The Commission has received concerns from broker-
dealers relating to the potential expiration of the no-action
relief described in paragraph (1).
(b) Extension of No-Action Determination.--The Commission shall
provide an additional 180-day extension of the no-action determination
described in the letter sent on November 4, 2019, from the Chief
Counsel's Office of the Division of Investment Management of the
Commission to the Securities Industry and Financial Markets
Association, entitled ``Investment Advisers Act of 1940--Section
202(a)(11)'' (referred to in this section as the ``no-action
determination''), set to expire on July 3, 2023.
(c) Study Required.--
(1) In general.--After the announcement of the extension,
pursuant to subsection (b), of the expiration date of the no-
action determination, the Commission shall--
(A) after providing notice and the opportunity for
comment, conduct a study of the impact of allowing the
no-action determination to expire or of maintaining the
no-action determination; and
(B) in carrying out the study required under
subparagraph (A), give due regard to any comments
received under that subparagraph.
(2) Contents.--The study required under paragraph (1) shall
include potential impacts on the research market for smaller
issuers, including the following:
(A) The availability of that research, including--
(i) the number and types of firms that
provide that research;
(ii) the volume of that research over time;
and
(iii) competition in the research market.
(B) Any unique challenges faced by minority-owned,
women-owned, or veteran-owned small issuers in
obtaining research coverage.
(C) The impact on the availability of research
coverage for small issuers due to rules of the
Commission.
(D) A cost-benefit analysis of regulatory options
that will support research coverage of small entities
and increase transparency in the cost of research
provided by broker-dealers.
(E) Impacts of the no-action determination on--
(i) investors in--
(I) registered investment companies
and exempt investment funds;
(II) pension funds; and
(III) endowments;
(ii) other asset owners;
(iii) investment advisers;
(iv) broker-dealers that provide both
investment research and trading services;
(v) independent investment advisers that do
not provide trading services;
(vi) broker-dealers that do not provide
investment research; and
(vii) other market participants, including
issuers of securities.
(F) Potential impacts of the expiration of the no-
action determination on the parties described in
subparagraph (E).
(3) Report.--Not later than 18 months after the date of
enactment of this Act, the Commission, or delegated staff of
the Commission, shall submit to the Committee on Banking,
Housing, and Urban Affairs of the Senate and the Committee on
Financial Services of the House of Representatives a report
containing the findings and conclusions from the study
conducted under this subsection, including findings relating to
the expiration of the no-action determination.
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