On November 30, the Securities and Exchange Commission adopted new Rule 139b under the Securities Act of 1933. Rule 139 currently provides a safe harbor for the publication or distribution of research reports concerning one or more issuers by a broker-dealer participating in a registered offering of a covered issuer’s securities. However, Rule 139’s safe harbor does not extend to the publication or distribution of research reports by a broker-dealer with respect to registered investment companies or business development companies.
New Rule 139b extends the current safe harbor available under Rule 139 to “covered investment fund research reports.” “Covered investment fund research reports” include research reports published or distributed by a broker-dealer relating to a covered investment fund or any securities issued by such a covered investment fund. However, research reports published or distributed by the covered investment fund or any affiliate thereof, or any research report published or distributed by a broker-dealer that is an investment adviser of such covered investment fund, are not covered under the new safe harbor contained in Rule 139b. A “covered investment fund” includes registered investment companies, business development companies, and certain commodity- or currency-based trust funds. Rule 139b is intended to promote research on mutual funds, exchange-traded funds, registered closed-end funds, business development companies and similar investment funds.
Rule 139b will become effective 30 days following the publication of the notice in the Federal Register.
The final Rule is available here.