This bill provides statutory authority for specified Securities and Exchange Commission (SEC) guidance allowing broker-dealers to receive payments for research services provided to investment managers. Under current law, broker-dealers that receive payments for performing this service must register as investment advisors. However, the SEC currently waives enforcement against these broker-dealers.
The bill extends a no-action letter granted by the Securities and Exchange Commission (SEC) for an additional 6 months.
The SEC will conduct a study to evaluate the impact of allowing the no-action letter to expire or maintaining it.
The study will focus on the potential impacts on the research market for smaller issuers, including availability, competition, and challenges faced by minority-owned, women-owned, and veteran-owned small issuers.
The study will also include a cost-benefit analysis of regulatory options to support research coverage of small entities and increase transparency in the cost of research provided by broker-dealers.
The study will assess the impact of the no-action relief on various market participants, such as investors, investment advisers, broker-dealers, and issuers of securities.
