Bipartisan Bill Introduced Allowing Investors to Receive Information Electronically

On February 29, 2024, Thom Tillis, R-N.C. and John Hickenlooper, D-Colo., introduced proposed legislation entitled “Improving Disclosure for Investors Act of 2024” (the “2024 Act”), which would require the Securities and Exchange Commission (“SEC”) to write a rule allowing the delivery of required regulatory documents by electronic delivery. The bill also requires the SEC to adopt a means for investors to opt out of electronic delivery of documents for paper receipt, making electronic delivery the default option.

The introduction of this bill comes on the heels of companion legislation (H.R. 1807), introduced in April 2023, permitting registered investment companies, broker-dealers, investment advisors and other financial entities to deliver investor communications automatically via email.

The 2024 Act has received support across the board, including from Reps., Jake Auchincloss (D-MA), Bryan Steil (R-WI), Wiley Nickel (D-NC) and Bill Huizenga (R-MI) who called it “a commonsense reform that is designed to modernize disclosure requirements and bring them into the modern era.” The bill has also received support from major investment firms including Fidelity Investments and Charles Schwab, who called default e-delivery “long-overdue” to address investors preference for the “speed and convenience of receiving documents electronically”.[1]

While the majority supports this bill, some had reservations. For example, Steve Staganelli, a certified financial planner, expressed concern for the bill’s impact on those who lack digital security or cannot keep track of their login credentials.[2]

If passed, the SEC would be required to adopt regulations consistent with the proposed legislation within 180 days and to finalize them within one year.