WASHINGTON, July 16 - The U.S. Securities and Exchange Commission on Thursday put forward a proposed rule that would let firms deliver investor disclosures electronically as a default option. The agency said the change aims to improve access to information for investors, brokerages, investment fund advisers and other market participants, and reflects what it called the contemporary technology environment on Wall Street.
Under the current process, companies typically distribute disclosures in paper form unless an investor or other recipient has requested an electronic option. The proposal would reverse that default: companies would be able to offer electronic delivery without first obtaining consent from recipients, the SEC said. The agency highlighted potential cost savings tied to reducing paper-based distribution.
SEC leadership described the proposal as part of a broader pro-innovation agenda. In a public statement, the SEC chair pointed to advances such as artificial intelligence and blockchain technology and said that paper delivery should not be the default standard in an era of modern technologies.
The proposal is not final. It is subject to a two-month notice-and-comment period before the commission would make any decision about adopting the rule. During that period, stakeholders will have the opportunity to submit feedback to the agency for consideration.
Why this matters
From the agency's perspective, permitting default electronic distribution is intended to make materials more readily available and to align regulatory practice with the technologies firms are using today. The SEC explicitly connected the proposed change to its pro-innovation objective and to ongoing technological shifts referenced in its public remarks.
The proposal impacts various participants across the financial ecosystem, including individual investors, broker-dealers, and investment fund advisers, by changing how disclosure communications can be delivered and potentially altering the cost structure for distribution.
Next steps
The two-month notice-and-comment period will determine whether any revisions are requested by market participants or other commenters. Only after that period will the commission decide whether to proceed with a final rule.