[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[S. 327 Enrolled Bill (ENR)]

        S.327

                     One Hundred Fifteenth Congress

                                 of the

                        United States of America


                          AT THE FIRST SESSION

          Begun and held at the City of Washington on Tuesday,
          the third day of January, two thousand and seventeen


                                 An Act


 
   To direct the Securities and Exchange Commission to provide a safe 
  harbor related to certain investment fund research reports, 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 ``Fair Access to Investment Research 
Act of 2017''.
SEC. 2. SAFE HARBOR FOR INVESTMENT FUND RESEARCH.
    (a) Expansion of the Safe Harbor.--Not later than the end of the 
180-day period beginning on the date of enactment of this Act, the 
Securities and Exchange Commission shall propose, and not later than 
the end of the 270-day period beginning on such date, the Commission 
shall adopt, upon such terms, conditions, or requirements as the 
Commission may determine necessary or appropriate in the public 
interest, for the protection of investors, and for the promotion of 
capital formation, revisions to section 230.139 of title 17, Code of 
Federal Regulations, to provide that a covered investment fund research 
report that is published or distributed by a broker or dealer, other 
than a broker or dealer that is an investment adviser to the fund or an 
affiliated person of the investment adviser to the fund--
        (1) shall be deemed, for purposes of sections 2(a)(10) and 5(c) 
    of the Securities Act of 1933 (15 U.S.C. 77b(a)(10), 77e(c)), not 
    to constitute an offer for sale or an offer to sell a security that 
    is the subject of an offering pursuant to a registration statement 
    that is effective, even if the broker or dealer is participating or 
    will participate in the registered offering of the covered 
    investment fund's securities; and
        (2) shall be deemed to satisfy the conditions of paragraph (1) 
    or (2) of section 230.139(a) of title 17, Code of Federal 
    Regulations, or any successor provisions, for purposes of the 
    Commission's rules and regulations under the Federal securities 
    laws and the rules of any self-regulatory organization.
    (b) Implementation of Safe Harbor.--In implementing the safe harbor 
pursuant to subsection (a), the Commission shall--
        (1) not, in the case of a covered investment fund with a class 
    of securities in substantially continuous distribution, condition 
    the safe harbor on whether the broker's or dealer's publication or 
    distribution of a covered investment fund research report 
    constitutes such broker's or dealer's initiation or reinitiation of 
    research coverage on such covered investment fund or its 
    securities;
        (2) not--
            (A) require the covered investment fund to have been 
        registered as an investment company under the Investment 
        Company Act of 1940 (15 U.S.C. 80a-1 et seq.) or subject to the 
        reporting requirements of section 13 or 15(d) of the Securities 
        Exchange Act of 1934 (15 U.S.C. 78m, 78o(d)) for any period 
        exceeding the period of time referenced under section 
        230.139(a)(1)(i)(A)(1) of title 17, Code of Federal 
        Regulations; or
            (B) impose a minimum float provision exceeding that 
        referenced in section 230.139(a)(1)(i)(A)(1)(i) of title 17, 
        Code of Federal Regulations;
        (3) provide that a self-regulatory organization may not 
    maintain or enforce any rule that would--
            (A) prohibit the ability of a member to publish or 
        distribute a covered investment fund research report solely 
        because the member is also participating in a registered 
        offering or other distribution of any securities of such 
        covered investment fund; or
            (B) prohibit the ability of a member to participate in a 
        registered offering or other distribution of securities of a 
        covered investment fund solely because the member has published 
        or distributed a covered investment fund research report about 
        such covered investment fund or its securities; and
        (4) provide that a covered investment fund research report 
    shall not be subject to section 24(b) of the Investment Company Act 
    of 1940 (15 U.S.C. 80a-24(b)) or the rules and regulations 
    thereunder, except that such report may still be subject to such 
    section and the rules and regulations thereunder to the extent that 
    it is otherwise not subject to the content standards in the rules 
    of any self-regulatory organization related to research reports, 
    including those contained in the rules governing communications 
    with the public regarding investment companies or substantially 
    similar standards.
    (c) Rules of Construction.--Nothing in this Act shall be construed 
as in any way limiting--
        (1) the applicability of the antifraud or antimanipulation 
    provisions of the Federal securities laws and rules adopted 
    thereunder to a covered investment fund research report, including 
    section 17 of the Securities Act of 1933 (15 U.S.C. 77q), section 
    34(b) of the Investment Company Act of 1940 (15 U.S.C. 80a-33(b)), 
    and sections 9 and 10 of the Securities Exchange Act of 1934 (15 
    U.S.C. 78i, 78j); or
        (2) the authority of any self-regulatory organization to 
    examine or supervise a member's practices in connection with such 
    member's publication or distribution of a covered investment fund 
    research report for compliance with applicable provisions of the 
    Federal securities laws or self-regulatory organization rules 
    related to research reports, including those contained in rules 
    governing communications with the public, or to require the filing 
    of communications with the public the purpose of which is not to 
    provide research and analysis of covered investment funds.
    (d) Interim Effectiveness of Safe Harbor.--
        (1) In general.--From and after the 270-day period beginning on 
    the date of enactment of this Act, if the Commission has not 
    adopted revisions to section 230.139 of title 17, Code of Federal 
    Regulations, as required by subsection (a), and until such time as 
    the Commission has done so, a broker or dealer distributing or 
    publishing a covered investment fund research report after such 
    date shall be able to rely on the provisions of section 230.139 of 
    title 17, Code of Federal Regulations, and the broker or dealer's 
    publication of such report shall be deemed to satisfy the 
    conditions of paragraph (1) or (2) of section 230.139(a) of title 
    17, Code of Federal Regulations, if the covered investment fund 
    that is the subject of such report satisfies the reporting history 
    requirements (without regard to Form S-3 or Form F-3 eligibility) 
    and minimum float provisions of such subsections for purposes of 
    the Commission's rules and regulations under the Federal securities 
    laws and the rules of any self-regulatory organization, as if 
    revised and implemented in accordance with subsections (a) and (b).
        (2) Status of covered investment fund.--After such period and 
    until the Commission has adopted revisions to section 230.139 of 
    title 17, Code of Federal Regulations, and FINRA has revised rule 
    2210, for purposes of subsection (c)(7)(O) of such rule, a covered 
    investment fund shall be deemed to be a security that is listed on 
    a national securities exchange and that is not subject to section 
    24(b) of the Investment Company Act of 1940 (15 U.S.C. 80a-24(b)).
        (3) Covered investment funds communications.--
            (A) In general.--Except as provided in subparagraph (B), 
        communications that concern only covered investment funds that 
        fall within the scope of section 24(b) of the Investment 
        Company Act of 1940 (15 U.S.C. 80a-24(b)) shall not be required 
        to be filed with FINRA.
            (B) Exception.--FINRA may require the filing of 
        communications with the public if the purpose of those 
        communications is not to provide research and analysis of 
        covered investment funds.
    (e) Exception.--The safe harbor under subsection (a) shall not 
apply to the publication or distribution by a broker or a dealer of a 
covered investment fund research report, the subject of which is a 
business development company or a registered closed-end investment 
company, during the time period described in section 
230.139(a)(1)(i)(A)(1) of title 17, Code of Federal Regulations, except 
where expressly permitted by the rules and regulations of the 
Securities and Exchange Commission under the Federal securities laws.
    (f) Definitions.--For purposes of this Act:
        (1) The term ``affiliated person'' has the meaning given the 
    term in section 2(a) of the Investment Company Act of 1940 (15 
    U.S.C. 80a-2(a)).
        (2) The term ``covered investment fund'' means--
            (A) an investment company registered under, or that has 
        filed an election to be treated as a business development 
        company under, the Investment Company Act of 1940 (15 U.S.C. 
        80a-1 et seq.) and that has filed a registration statement 
        under the Securities Act of 1933 (15 U.S.C. 77a et seq.) for 
        the public offering of a class of its securities, which 
        registration statement has been declared effective by the 
        Commission; and
            (B) a trust or other person--
                (i) issuing securities in an offering registered under 
            the Securities Act of 1933 (15 U.S.C. 77a et seq.) and 
            which class of securities is listed for trading on a 
            national securities exchange;
                (ii) the assets of which consist primarily of 
            commodities, currencies, or derivative instruments that 
            reference commodities or currencies, or interests in the 
            foregoing; and
                (iii) that provides in its registration statement under 
            the Securities Act of 1933 (15 U.S.C. 77a et seq.) that a 
            class of its securities are purchased or redeemed, subject 
            to conditions or limitations, for a ratable share of its 
            assets.
        (3) The term ``covered investment fund research report'' means 
    a research report published or distributed by a broker or dealer 
    about a covered investment fund or any securities issued by the 
    covered investment fund, but does not include a research report to 
    the extent that the research report is published or distributed by 
    the covered investment fund or any affiliate of the covered 
    investment fund, or any research report published or distributed by 
    any broker or dealer that is an investment adviser (or an 
    affiliated person of an investment adviser) for the covered 
    investment fund.
        (4) The term ``FINRA'' means the Financial Industry Regulatory 
    Authority.
        (5) The term ``investment adviser'' has the meaning given the 
    term in section 2(a) of the Investment Company Act of 1940 (15 
    U.S.C. 80a-2(a)).
        (6) The term ``research report'' has the meaning given that 
    term under section 2(a)(3) of the Securities Act of 1933 (15 U.S.C. 
    77b(a)(3)), except that such term shall not include an oral 
    communication.
        (7) The term ``self-regulatory organization'' has the meaning 
    given that term under section 3(a)(26) of the Securities Exchange 
    Act of 1934 (15 U.S.C. 78c(a)(26)).

                               Speaker of the House of Representatives.

                            Vice President of the United States and    
                                               President of the Senate.