SEC Proposed Rule Regarding Covered Investment Fund Research Reports – Summary by Ronald Woessner

On May 23, 2018, as directed by Congress pursuant to the Fair Access to Investment Research Act of 2017, the SEC proposed a new rule under the Securities Act of 1933.

If adopted, the proposal would establish a safe harbor for an unaffiliated broker or dealer participating in a securities offering of a “covered investment fund” to publish or distribute a “covered investment fund research report.” If the conditions for the safe harbor are satisfied, this publication or distribution would be deemed not to be an offer for sale or offer to sell the covered investment fund’s securities for purposes of sections 2(a)(10) and 5(c) of the Securities Act of 1933.

The SEC also proposed a new rule under the Investment Company Act of 1940. This proposal would exclude a covered investment fund research report from the coverage of section 24(b) of the Investment Company Act (or the rules and regulations thereunder), except to the extent the research report is otherwise not subject to the content standards in self-regulatory
organization rules related to research reports, including those contained in the rules governing communications with the public regarding investment companies or substantially similar standards.

Public comments on the proposal were required to be submitted to the SEC on July 9, 2018.


This is a reprint of an earlier posting at

See Mr. Woessner’s biography at the link here.

Author: Ron

Ron Woessner of Dallas, Texas is former Senior Counsel to the Financial Services Committee of the US House of Representatives where he was special advisor to the Chairman for capital markets and fintech matters. He founded Microcap Strategies building upon his 25+ years' legal and operational experience in the smaller-cap and startup company ecosphere in the capacity of General Counsel to two NASDAQ-listed companies and CEO of an OTC-traded company that he up-listed to NASDAQ.  He currently mentors and advises companies in the start-up and smaller-cap company ecosphere and helps them raise capital through Regulation CF crowdfunding and other means. He also advocates in Washington DC for policies that create a more hospitable public company environment for smaller-cap companies, enhance capital formation, promote entrepreneurship, and increase upward mobility for all Americans, particularly minorities. Mr. Woessner, a certified Toastmaster, speaks and writes about US public and private capital markets topics and his articles are published at and elsewhere. For more information on Mr. Woessner's background or to contact him about a speaking engagement, see his Linked In profile at