Securities Research Modernization Act

Bill Number

H.R. 3672

Origin Chamber

House

Congress

119th Congress, Session 1

Policy Area

Finance and Financial Sector

Status

Introduced

Latest Action

2025-07-15: Placed on the Union Calendar, Calendar No. 167.

Last Updated

2026-06-11T23:26:41Z

AI-Generated Summary

Purpose

The Securities Research Modernization Act (H.R. 3672) aims to update securities regulations by broadening an existing exemption for research reports. This allows more types of companies to benefit from published analyst research during public offerings without triggering strict registration requirements under federal securities laws. The goal is to modernize rules originally focused on smaller, emerging companies to support a wider range of issuers accessing capital markets.

Key Provisions

• Expansion of Exemption: Amends Section 2(a)(3) of the Securities Act of 1933 (15 U.S.C. 77b(a)(3)) to extend the "research report" exception beyond just "emerging growth companies" (younger, smaller public companies with limited revenue and market value) to any issuer (any company issuing securities) planning a proposed public offering.
• Broadened Scope of Securities: Changes the exemption to cover research on any type of security, not limited to "common equity" (basic shares of stock ownership).
• Short Title: The bill is officially named the "Securities Research Modernization Act."

Significant Changes to Existing Law

• From Narrow to Broad Applicability: Previously, the exemption applied only to research reports on emerging growth companies' common equity securities during their initial public offerings or subsequent offerings. The bill removes these restrictions, making the exception available to all issuers and all types of public securities (e.g., bonds, preferred stock, or other instruments).
• Textual Amendments: Specifically replaces phrases like "an emerging growth company" with "an issuer," "the common equity" with "any," and "such emerging growth company" with "such issuer" in the relevant law section.
• This builds on the Jumpstart Our Business Startups (JOBS) Act of 2012, which introduced the original exemption, by expanding its reach without adding new regulatory burdens.

Potential Impacts

• On Government Agencies: The U.S. Securities and Exchange Commission (SEC), which enforces securities laws, may see reduced oversight needs for research reports on non-emerging issuers, potentially streamlining enforcement but requiring updates to guidance or rules to implement the broader exemption.
• On Citizens and Investors: Could increase availability of independent research on a wider range of companies, helping everyday investors make informed decisions about public offerings. This might lower information barriers for retail investors but could also raise risks if research quality varies.
• On International Relations: Minimal direct impact, though it may indirectly encourage foreign issuers to list in U.S. markets by easing research publication rules, potentially boosting cross-border investment flows.
• Overall, the change could facilitate more efficient capital raising for companies of all sizes, promoting economic growth without significantly altering investor protections.

Main Stakeholders Affected

• Issuers (Companies): All public companies planning offerings benefit from easier access to analyst coverage, especially larger or established firms previously excluded from the exemption.
• Broker-Dealers and Analysts: Financial firms and researchers gain flexibility to publish reports without fear of violating securities offering rules, potentially increasing research output.
• Investors: Individual and institutional investors receive more comprehensive market analysis, aiding better participation in public markets.
• SEC and Regulators: Must adapt to the expanded exemption, possibly leading to revised interpretations or monitoring to prevent misuse.

Notable Legal, Constitutional, or Political Implications

• Legal Implications: Strengthens the safe harbor for research reports, reducing litigation risks for analysts under Section 5 of the Securities Act (which prohibits unregistered offers/sales). However, it maintains anti-fraud protections under other laws like Section 10(b) of the Securities Exchange Act, ensuring research cannot be misleading.
• Constitutional Implications: None significant; the bill aligns with Congress's authority under the Commerce Clause to regulate interstate securities markets, promoting free speech for analysts while balancing investor safeguards.
• Political Implications: Reflects bipartisan support (introduced by Rep. Williams of Texas and Rep. Fields) for pro-business reforms, potentially appealing to financial industry lobbies. It could spark debates on whether broadening exemptions dilutes investor protections, though the bill avoids major overhauls to core regulations.

This summary was generated by AI and may contain inaccuracies. Refer to the official source document for the authoritative text.

Sponsor

Rep. Williams, Roger [R-TX-25]

Cosponsors (1)

Rep. Fields, Cleo [D-LA-6]

Recent Actions

• 2025-07-15: Placed on the Union Calendar, Calendar No. 167.
• 2025-07-15: Reported (Amended) by the Committee on Financial Services. H. Rept. 119-204.
• 2025-07-15: Reported (Amended) by the Committee on Financial Services. H. Rept. 119-204.
• 2025-06-10: Ordered to be Reported (Amended) by the Yeas and Nays: 31 - 19.
• 2025-06-10: Committee Consideration and Mark-up Session Held
• 2025-06-02: Referred to the House Committee on Financial Services.
• 2025-06-02: Introduced in House
• 2025-06-02: Introduced in House

Bill Versions

• Securities Research Modernization Act — issued 2025-06-02 — PDF (2 pages)
• Securities Research Modernization Act — issued 2025-07-15 — PDF (4 pages)