The Securities and Exchange Commission adopted a rule Monday that will allow investment funds to post their shareholder reports and other required materials online beginning in 2021.
In addition to disseminating the required materials online, funds will have to send investors a paper notice by mail of each report's availability. With the adoption of Rule 30e-3, funds can satisfy their delivery obligations for shareholder reports via traditional mail; electronically to investors who have chosen this method under the commission's electronic delivery guidance; by providing notice and website accessibility; or a combination of the three.
Rule 30e-3 provides for an extended transition period until Jan. 1, 2021, that is intended to better inform current investors of the coming change and better enable them to easily continue to receive paper reports if they wish, the SEC said in a news release. During the extended transition period, the earliest that notices may be transmitted to investors in lieu of paper reports is Jan. 1, 2021. In general, funds will be required to provide notification to shareholders for two years before relying on the rule.
The "notice and access" method is part of a larger effort to improve the design, delivery and content of information provided to fund investors, the SEC said.
The Consumer Federation of America, a consumer watchdog group, blasted the SEC decision, saying in a news release that the move will reduce investor readership of the disclosures.