[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[H.R. 6139 Reported in House (RH)]

<DOC>





                                                 Union Calendar No. 627
115th CONGRESS
  2d Session
                                H. R. 6139

                          [Report No. 115-808]

To require the Securities and Exchange Commission to carry out a study 
  to evaluate the issues affecting the provision of and reliance upon 
                investment research into small issuers.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                             June 19, 2018

    Mr. Huizenga (for himself and Ms. Maxine Waters of California) 
 introduced the following bill; which was referred to the Committee on 
                           Financial Services

                             July 10, 2018

Committed to the Committee of the Whole House on the State of the Union 
                       and ordered to be printed

_______________________________________________________________________

                                 A BILL


 
To require the Securities and Exchange Commission to carry out a study 
  to evaluate the issues affecting the provision of and reliance upon 
                investment research into small issuers.


 


    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 ``Improving Investment Research for 
Small and Emerging Issuers Act''.

SEC. 2. RESEARCH STUDY.

    (a) Study Required.--The Securities and Exchange Commission shall 
conduct a study to evaluate the issues affecting the provision of and 
reliance upon investment research into small issuers, including 
emerging growth companies and companies considering initial public 
offerings.
    (b) Contents of Study.--The study required under subsection (a) 
shall consider--
            (1) factors related to the demand for such research by 
        institutional and retail investors;
            (2) the availability of such research, including--
                    (A) the number and types of firms who provide such 
                research;
                    (B) the volume of such research over time; and
                    (C) competition in the research market;
            (3) conflicts of interest relating to the production and 
        distribution of investment research;
            (4) the costs of such research;
            (5) the impacts of different payment mechanisms for 
        investment research into small issuers, including whether such 
        research is paid for by--
                    (A) hard-dollar payments from research clients;
                    (B) payments directed from the client's commission 
                income (i.e., ``soft dollars''); or
                    (C) payments from the issuer that is the subject of 
                such research;
            (6) any unique challenges faced by minority-owned, women-
        owned, and veteran-owned small issuers in obtaining research 
        coverage; and
            (7) the impact on the availability of research coverage for 
        small issuers due to--
                    (A) investment adviser concentration and 
                consolidation, including any potential impacts of fund-
                size on demand for investment research of small 
                issuers;
                    (B) broker and dealer concentration and 
                consolidation, including any relationships between the 
                size of the firm and allocation of resources for 
                investment research into small issuers;
                    (C) Securities and Exchange Commission rules;
                    (D) registered national securities association 
                rules;
                    (E) State and Federal liability concerns;
                    (F) the settlement agreements referenced in 
                Securities and Exchange Commission Litigation Release 
                No. 18438 (i.e., the ``Global Research Analyst 
                Settlement''); and
                    (G) Directive 2014/65/EU of the European Parliament 
                and of the Council of 15 May 2014 on markets in 
                financial instruments and amending Directive 2002/92/EC 
                and Directive 2011/61/EU, as implemented by the 
                European Union (``EU'') member states (``MiFID II'').
    (c) Report Required.--Not later than 180 days after the date of the 
enactment of this Act, the Securities and Exchange Commission shall 
submit to Congress a report that includes--
            (1) the results of the study required by subsection (a); 
        and
            (2) recommendations to increase the demand for, volume of, 
        and quality of investment research into small issuers, 
        including emerging growth companies and companies considering 
        initial public offerings.
                                                 Union Calendar No. 627

115th CONGRESS

  2d Session

                               H. R. 6139

                          [Report No. 115-808]

_______________________________________________________________________

                                 A BILL

To require the Securities and Exchange Commission to carry out a study 
  to evaluate the issues affecting the provision of and reliance upon 
                investment research into small issuers.

_______________________________________________________________________

                             July 10, 2018

Committed to the Committee of the Whole House on the State of the Union 
                       and ordered to be printed