A bipartisan bill introduced in the House would direct the Securities and Exchange Commission to promulgate rules allowing regulated entities like mutual funds, exchange-traded funds, registered broker-dealers and registered advisers to deliver required documents to investors electronically as the default option.
Under the Improving Disclosure for Investors Act of 2022, introduced Thursday by Rep. Bill Huizenga, R-Mich., and Rep. Jake Auchincloss, D-Mass., the SEC would have to propose rules within 180 days of the bill's enactment to allow for electronic delivery of all regulatory documents to investors and to issue final rules within one year after becoming law.
There would be a 180-day transition period to default all customers to electronic delivery for whom firms have an email address on file. Investors could opt out any time to receive paper versions of the documents.
Fidelity Investments in a statement welcomed the bill and said it "acknowledges there is a more secure and efficient way to communicate with our customers, while ensuring they understand that paper delivery of their documents is always an option. We look forward to working with Congress to advance this innovative bill into law."
Kenneth E. Bentsen Jr., president and CEO of the Securities Industry and Financial Markets Association, said in a statement that the "time has come — and arguably is overdue — to implement electronic delivery as the default means for delivering investor communications, while giving investors the power to choose paper delivery if preferred."
The bill is "an important step forward in modernizing delivery of investor disclosures," added Eric J. Pan, president and CEO of the Investment Company Institute, in a statement. "The vast majority of investors have internet access. This bill reflects their strong preference to receive disclosure documents electronically, which also helps investors find the information that is most relevant to them."
With only a couple weeks remaining in the congressional session, the bill is unlikely to become law, but it could be reintroduced next session and move.