A bipartisan bill directing the Securities and Exchange Commission to propose rules allowing regulated entities to electronically deliver required documents to investors by default was introduced Feb. 29 in the Senate.
Sen. Thom Tillis, R-N.C. and John Hickenlooper, D-Colo., introduced the Improving Disclosure for Investors Act of 2024, which mirrors a bill introduced in the House last year.
Currently, the SEC allows electronic delivery of certain documents, subject to requirements that a registrant provides notice that the information is available electronically, the investor has adequate access to such information and the registrant either obtains evidence to show actual delivery or obtains informed consent from the investor, the lawmakers noted in a news release.
Their bill would require the SEC to update that framework. It would also direct the agency to establish a means for investors to opt out of electronic delivery at any time and receive paper documents.
"U.S capital markets have embraced the digital age and rely on far less paper now than they did 20 years ago, and it is past time that we bring disclosure requirements into the 21st century," Tillis said in the news release. "This commonsense legislation will heighten efficiency and cut down on paper while preserving investors' ability to receive hard copies."
The bill was welcomed by several firms and industry groups, including Fidelity Investments, Charles Schwab, the Investment Company Institute and the Securities Industry and Financial Markets Association.
"Default e-delivery is long-overdue, as a large majority of investors prefer the speed and convenience of receiving documents electronically," Schwab said in a statement. "E-delivery allows Schwab to deliver our products at lower cost, avoids waste and is environmentally friendly. Schwab looks forward to working with these senators and their colleagues to move this important legislation forward."
SIFMA President and CEO Kenneth E. Bentsen Jr. said in a statement that the bill is long overdue.
"This important bipartisan legislation is the natural next step in modernizing the SEC's framework in light of changing investor preferences and technology," he said.
The House Financial Services Committee advanced the House version of the bill in April 2023, but the full chamber has yet to consider it.
