Securities Research Modernization Act

This bill, the Securities Research Modernization Act, would let brokerage firms and dealers publish research reports about any company that plans a public offering. These reports would not count as an offer to sell under federal registration rules. Right now, this exception only applies to reports about “emerging growth companies,” so the bill widens it to cover all companies planning an offering. It also broadens the rule from just common stock to any type of security by changing the law’s wording from “emerging growth company” to “issuer” and from “common equity” to “any” securities.

Key points:

• Who is affected: Brokers and dealers, companies planning public offerings, and investors who read research reports.
• What changes: Research reports about any company’s planned offering, for any type of security, would not be treated as a sales offer under registration rules .
• Practical effect: More research could be available to the public about upcoming offerings, not just those from emerging growth companies.