Securities Research Modernization Act
Introduced June 2, 2025 · Last action July 15, 2025
Plain English Summary
This bill amends the Securities Act of 1933 to expand a research report exception that currently applies only to emerging growth companies so that it applies to any company conducting a public securities offering. The change allows brokerage firms and investment banks to publish research reports about companies planning to go public without triggering restrictions on what those reports can say.
Who benefits
Investment banks, brokerage firms, and securities analysts who publish research reports—particularly the largest underwriters who advise on initial public offerings (IPOs) and secondary offerings; large investment research providers like Goldman Sachs, Morgan Stanley, JPMorgan Chase, and independent research shops that advise institutional clients on securities offerings
Who pays / loses
Individual retail investors and smaller institutional investors who rely on independent, unbiased research to evaluate securities offerings; competing research providers not affiliated with major underwriters; the regulatory scrutiny and disclosure burden on companies conducting offerings (reduced requirement to provide comparative analysis and independent verification)
Funding & Lobbying Interests
The securities industry—specifically investment banks, underwriters, and institutional brokerage firms—have a direct financial interest in this bill. These firms generate substantial revenue from underwriting fees on IPOs and secondary offerings and from selling research access to institutional clients. Sponsors Mr. Williams (R-TX) and Mr. Fields (R-NY) represent districts with significant financial services presence. The Investment Company Institute, Securities Industry and Financial Markets Association (SIFMA), and major banking industry groups typically lobby for exceptions that reduce compliance burdens on research publication in capital markets transactions.
Political Impact
Affected Groups
Retail investors participating in IPOs and secondary offerings (estimated 58 million U.S. households own stocks); institutional asset managers; public companies planning to raise capital; securities underwriters and their research divisions (estimated 250,000+ research analysts and underwriting professionals in the U.S. financial services industry)
Political Subtext
Proponents argue this modernizes securities research rules by removing outdated categorical restrictions and allowing more research to flow to market participants. Critics contend that emerging growth company protections were enacted specifically to protect less-scrutinized young companies from coordinated analyst cheerleading by their own underwriters, and expanding the exception to all issuers recreates the pre-2012 environment where underwriter research teams faced minimal restrictions on conflicts of interest. Non-partisan securities law scholarship and the SEC's own enforcement history document that investment banks used research reports to promote offerings without adequate disclosure of conflicts during the 2000s.
Real-World Stakes
If passed, this removes a protective firewall established by the Jumpstart Our Business Startups (JOBS) Act of 2012, which created the 'emerging growth company' category and imposed research restrictions on underwriters covering those companies during their early public life. Prior to 2012, research analysts employed by underwriting firms had few restrictions on publishing favorable reports about companies they were also underwriting—documented in SEC and FINRA enforcement actions and congressional testimony following the 2008 financial crisis as a major conflict of interest. Analysts at underwriting firms face pressure (documented compensation incentives and internal emails in regulatory files) to support offerings their employers are underwriting. Expanding the exception likely increases retail investor reliance on conflicted research for investment decisions, particularly for newer and smaller public companies. The 2015 SEC Dodd-Frank study documented elevated conflicts in pre-IPO research on smaller issuers.
Sponsor
Sponsor information not available.
Vote Record
No recorded votes.
Campaign Finance — Primary Sponsor
No campaign finance data available yet.
501(c)(4) disclosure: Contributions from 501(c)(4) "dark money" organizations are not required to be publicly disclosed and are not reflected in the figures above. Data sourced from FEC public disclosure filings.
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