Senators have reintroduced the Improving Disclosure for Investors Act, legislation requiring the Securities and Exchange Commission to write a rule allowing financial firms to deliver their documents in digital format.
The House Financial Services Committee advanced companion legislation, sponsored by Rep. Bill Huizenga, R-Mich., and Rep. Brad Sherman, D-Calif., in late May.
Sens. Thom Tillis, R-N.C., and John Hickenlooper, D-Colo., along with four co-sponsors reintroduced the bill June 2.
“U.S capital markets have embraced the digital age and rely on far less paper now than they did 25 years ago, and it is past time that we bring disclosure requirements into the 21st century,” Tillis said in a statement. “Nearly 80% of surveyed Americans already utilize electronic delivery and this commonsense legislation will heighten efficiency and cut down on unwanted paper while still preserving investors’ ability to receive printed hard copies if they wish.”
Hickenlooper added: “Today’s economy runs in the digital age, and we need to catch up."
The bill is supported by Fidelity Investments, Charles Schwab, the Investment Company Institute and the Securities Industry and Financial Markets Association.
Fidelity said Tuesday that it applauds the bill's re-introduction, which directs the SEC to make e-delivery "the primary way to receive disclosures, with significant investor protections in the transition."
Electronic delivery "has been shown to be a more secure, effective, and timely way to receive critical investment information. We look forward to continuing to work with Congress and the SEC to advance this commonsense reform,” Fidelity said.
SIFMA added that “the time is overdue to make electronic delivery the default means for delivering investor communications, while giving investors the power to choose paper delivery if preferred." The group pointed to survey results showing that "a large majority of retail investors, regardless of income or age, want e-delivery for its environmental benefits, speed and convenience."
Melissa MacGregor, deputy general counsel at SIFMA, said Tuesday at the BNY Pershing Insite conference that "we’ll see progress at the SEC before we see action” in Congress on e-delivery.
Consumer groups balked last year, saying that the bill would open the door "for many investors to be pushed into a disclosure system that investors did not choose, depriving them of information in a format that works for them."
The consumer groups, which included Better Markets and the Consumer Federation of America, said the bill would also make it "much harder for many investors to find and review important information on their investments, including the fees that they pay."
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