U.S. Senate is Making it Easier for Investors to Research ETFs

“The use of ETFs continues to grow at a rapid rate,” Hill said in a statement when the House bill was introduced earlier. “However, this complex market lacks research and information that could greatly benefit consumers. I always will advocate for commonsense legislation that promotes capital formation, removes unnecessary burdens and improves investor access to information.”

Prior the bill’s vote, the practice was not allowed due to a technicality in securities law that does not provide ETFs the same safe passage given other investment vehicles, like mutual funds.

The bill passed the House of Representatives last year by a large margin, but failed to go through the Senate and had to be re-introduced this year.

Sen. Elizabeth Warren, D-Mass., though was not in favor of the bill as written. Warren offered an amendment on the ETF research bill, which was later withdrawn, that would deny liability protection for brokers who wrote reports about ETFs in which they have a financial interest, arguing that the situation creates an “obvious conflict of interest” for brokers.

For more information on ETFs, visit our ETF 101 category.