The SEC adopted new rules and amendments intended to encourage broker-dealers to publish research reports on SEC-registered investment companies and business development companies.
New Securities Act Rule 139b extends the current "safe harbor" available under Securities Act Rule 139 to a covered investment fund research report. Under the rule, a covered investment fund research report by a broker-dealer would not be considered an "offer for sale or offer to sell a security that is the subject of an offering," even if the broker-dealer is participating or may participate in a registered offering of the covered investment fund's securities. The safe harbor will not be available to a broker-dealer that is affiliated with an adviser to the relevant fund.
In addition, the SEC adopted new Investment Company Act Rule 24b-4, which would exempt covered investment fund research reports from ICA Section 24(b) filing requirements, except to the extent such reports are otherwise not subject to the content standards of self-regulatory organization rules related to research reports.
The rules and amendments will become effective 30 days after their publication in the Federal Register.
The SEC proposed two new rules intended to encourage broker-dealers to publish research reports on certain SEC-registered investment companies.
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