H.R.3672 - Securities Research Modernization Act (119th Congress)
Summary
H.R.3672, the Securities Research Modernization Act, aims to amend the Securities Act of 1933. The bill seeks to expand the research report exception to include reports about any issuer undertaking a proposed offering of public securities, rather than limiting it to emerging growth companies. This change would allow for broader dissemination of research reports during the offering process.
Expected Effects
The likely effect of this bill is to increase the availability of research reports for a wider range of companies. This could lead to more informed investment decisions. It may also reduce information asymmetry in the market.
Potential Benefits
- Increased Information Availability: More research reports available to investors.
- Wider Range of Companies Covered: Research extended beyond emerging growth companies.
- Potentially More Informed Investment Decisions: Investors have access to more data.
- Reduced Information Asymmetry: Levels the playing field for smaller investors.
- Modernization of Securities Research: Updates regulations to reflect current market practices.
Most Benefited Areas:
Potential Disadvantages
- Potential for Biased Research: Increased availability doesn't guarantee unbiased reports.
- Risk of Misleading Information: More reports could mean more opportunities for misinformation.
- Compliance Costs: Issuers may face increased costs to ensure research compliance.
- Market Manipulation: Possibility of using research reports for manipulative purposes.
- Over-Reliance on Research: Investors might over-rely on reports without independent analysis.
Constitutional Alignment
The bill appears to align with the spirit of promoting economic activity and efficient markets, which indirectly relates to the general welfare clause of the Constitution's preamble. Specifically, Article 1, Section 8 grants Congress the power to regulate commerce. This bill falls under that purview as it amends securities regulations.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).