[United States Statutes at Large, Volume 131, 115th Congress, 1st Session]
[From the U.S. Government Publishing Office, www.gpo.gov]


Public Law 115-66
115th Congress

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;

[[Page 1197]]

(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

[[Page 1198]]

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--

[[Page 1199]]

(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)).

Approved October 6, 2017.

LEGISLATIVE HISTORY--S. 327:
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CONGRESSIONAL RECORD, Vol. 163 (2017):
Sept. 11, considered and passed Senate.
Sept. 27, considered and passed House.