Hill’s bill on securities clears House

WASHINGTON — The U.S. House of Representatives passed the Fair Access to Investment Research Act this week, legislation that would ease the way for brokers and dealers to share research with potential clients about an increasingly popular type of investment.

The bill, sponsored by U.S. Rep. French Hill, R-Ark., had passed the House 411-6 last year. This time, it passed 405-2.

Exchange traded funds, or ETFs, were first launched in the United States in 1993.

Today, there are more than 1,500 of the funds, with assets of $2.1 trillion.

Exchange traded funds can be bought and sold like stocks throughout the day. Transaction fees are typically low. Small investors can easily buy them. Those with exchange traded funds also can receive the dividends and invest that money however they see fit.

Brokers have been hesitant to release research reports that analyze particular exchange traded funds because they fear running afoul of decades-old federal restrictions.

Hill calls it “an arcane anomaly in the securities law,” noting that investors can already get reports that analyze individual stocks and bonds.

If the legislation, House Resolution 910, becomes law, similar reports will be available for exchange traded funds as well.

“We passed [the] bill to allow consumers to get research they need to make good investment decisions,” Hill said.

Before his election to Congress in 2014, Hill worked for years as a banker and an investment manager.

The lawmaker from Little Rock is the former chairman and chief executive officer of Delta Trust and Banking

Corp., a Little Rock financial institution he founded and led before its purchase in 2014 by Simmons First National Corp. of Pine Bluff.

As a freshman, Hill watched the legislation sail through the House last year only to see it stall in the Senate.

But with U.S. Sen. Dean Heller, R-Nev., pushing a similar bill in the Senate, Hill says, the chances look better this time.

“We did not have momentum in the Senate last Congress and we do now. It’s now passed the Senate Banking Committee, so we hope we can now get

it passed in the Senate and be signed into law,” Hill said.

The exchange traded funds legislation has faced opposition from Americans for Financial Reform, a nonprofit group that favors increased regulation of Wall Street.

“It’s a bad bill,” said Marcus Stanley, the organization’s policy director.

Rather than providing unbiased information, the reports may simply be promotional tools, he said.

“We feel it’s likely this stuff is going to be a sales pitch,” he said.

Officials with Sifma, formerly known as the Securities Industry and Financial Markets Association, said the legislation is good for investors and the

nation.

“As the ETF market continues to grow, this bill’s common sense clarifications will allow broker-dealers to produce more research on ETFs, providing consumers with greater access to information and fueling capital formation and job creation,” the organization said in a written statement.

David Oxner, one of Sifma’s managing directors, praised Hill’s leadership on the issue.

“His experience in the industry, his knowledge of the markets and how investors use the markets has been a huge benefit. I know he’s been tireless on this,” Oxner said. “With French Hill at the helm, I think this bill has a pretty good chance of becoming law.”