SEC Proposes New E-Delivery Approach to Make Information More Readily Accessible and Useful for Investors
The Securities and Exchange Commission today proposed Regulation E-Delivery, a new rule that would expand the ability of issuers, broker-dealers, investment advisers, and others to use electronic delivery to satisfy information delivery requirements under the federal securities laws.
Regulation E-Delivery would make information more readily accessible and useful for investors and others while preserving the ability to receive delivery in paper format on request. Currently, required regulatory information typically is delivered in paper format unless the recipient affirmatively elects otherwise. The proposed e-delivery approach includes requirements and conditions under which required information could be delivered electronically without first obtaining affirmative consent. It generally would supersede the Commission’s decades-old, guidance-based e-delivery approach and provide savings to issuers, market intermediaries, and, ultimately, investors, in paper, printing, and postage costs.
“Today, the Commission took an important step toward allowing the financial services industry to harness technology for the benefit of everyday American investors. By proposing to permit electronic delivery to become the default method for issuers, market intermediaries, and others to communicate with investors, we are taking another stride toward a regulatory framework suitable for the modern era, a key pillar of my agenda,” SEC Chairman Paul S. Atkins said in a statement. “In an age of artificial intelligence and blockchain technology, a default to paper delivery should be a relic, not a standard.”
The proposal reflects how today’s issuers, market intermediaries, investors, and others use electronic media to provide and access information. E-delivery offers the opportunity to give investors and others potentially more personalized, interactive, timely, and efficient experiences with disclosure than paper delivery. It also provides accessibility and retention benefits. The range of information deliverable electronically under the proposed rule would be broad, including, among other things, prospectuses for funds and other issuers, fund annual and semi-annual shareholder reports, proxy statements, trade confirmations, disclosures pursuant to Form CRS, and Form ADV Part 2 Brochures.
The proposal includes a transition process for investors and others who are currently receiving regulatory information in paper format. These recipients would receive two paper notices if they would be transitioned to e-delivery under the rule, which would provide information about the upcoming transition and the ability to opt out of e-delivery.
The public comment period will remain open for 60 days following publication of the proposing release in the Federal Register.
