H.R. 3672, Securities Research Modernization Act

H.R. 3672 would amend the Securities Act of 1933 to allow brokers and dealers to publish research reports on any issuer planning to sell securities to the public. Under current law, brokers and dealers can only publish such reports on emerging growth companies, which are firms that meet certain criteria including gross annual revenues of less than $1.235 billion.

Using information about the cost of similar rulemakings at the Securities and Exchange Commission (SEC), CBO estimates that implementing H.R. 3672 would cost less than $500,000 over the 2026-2030 period. CBO expects that the commission would need one employee, at an average annual cost of $330,000, to issue and amend rules over six months. Because the SEC is authorized to collect fees each year to offset its annual appropriation, CBO expects that the net effect on discretionary spending over the 2026-2030 period would be negligible, assuming appropriation actions consistent with that authority.

If the SEC increases fees to offset the costs associated with implementing the bill, H.R. 3672 would increase the cost of an existing mandate on private entities required to pay those assessments. CBO estimates that the incremental cost of that mandate would be small and fall below the annual threshold established in the Unfunded Mandates Reform Act (UMRA) for private-sector mandates ($206 million in 2025, adjusted annually for inflation).

H.R. 3672 contains no intergovernmental mandates as defined in UMRA.

The CBO staff contacts for this estimate are Sean Christensen (for federal costs) and Lucy Marret (for mandates). The estimate was reviewed by H. Samuel Papenfuss, Deputy Director of Budget Analysis.