Last week, the House Financial Services Committee approved legislation that would allow broker-dealers to publish research on exchange traded funds that would not be considered a solicitation to buy or sell shares of ETFs mentioned in research reports.

“The measure was co-authored by Rep. French Hill, R-Ark., and Rep. John Carney, D-Del. The measure was one of 13 bills the House Financial Services Committee approved that are designed to ease capital-raising rules for small businesses. They will go to the House floor next for a vote by the full chamber,” reports Mark Schoeff Jr. for InvestmentNews.

Due to various securities laws and regulations, broker-dealers currently do not publish ETF research. The legislation “would direct the Securities and Exchange Commission (SEC) to provide a safe harbor for research reports that cover Exchange Traded Funds (ETFs) so that the reports would not be considered “offers” under the Securities Act of 1933,” according to a statement from Hill’s office.

Permitting broker-dealers to publish ETF research would allow those companies to gain a potentially larger slice of the rapidly growing ETF industry.

According to ETFGI, a London-based ETF research firm, the global exchange traded products industry will surpass hedge funds in terms of assets under management this quarter.

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