Fair Access to Investment Research Act of 2017 Signed Into Law
An ETF is a marketable security that tracks a stock index, a commodity, bonds, or a basket of assets like an index fund and trades like a common stock on a stock exchange. Under current law, this type of report is considered an offering for sale and a broker-dealer is required to file a registration statement for that offering. As such, broker-dealers have historically not been able to provide research on these products. Broker-dealers are already allowed to provide such reports for several other asset classes. FAIR will allow broker-dealers to provide the same reports on ETFs, even if the broker-dealer is participating in the underwriting of an offering of that ETF.
As we continue to see record breaking inflows to ETFs, it is critical that investors are able to obtain information in order to be able to evaluate their investment options. FAIRwill give investors access to more information, which could facilitate the flow of additional capital into these types of investment vehicles. This new law will put ETFs on the same playing field as
other securities in terms of information made available to the public.
Investors and their tax advisors need to be mindful of these issues and are well advised to seek assistance of tax advisors to insure that the information is properly presented.
