A bipartisan bill that would direct the SEC to allow registered investment companies (RIAs) to submit regulatory documents electronically “by default,” as opposed to requiring investors to opt in, has been introduced by Bill Huizenga (R-MI), Vice Chairman of the House Financial Services Committee,

Under current SEC rules, investors have to “opt-in” to receive electronic documents from RIAs. That requires:

• informed consent from the investor or evidence of actual delivery;
• that the investor has notice of the electronic transmission;
• that the investor has adequate access to the electronic transmission.

Under the new bill, co-introduced by Brad Sherman (D-CA), Bryan Steil (R-WI), and Jake Auchincloss (D-MA), those antiquated requirements would be eliminated, with electronic transmission made the standard route of delivery. If investors wish to receive paper documents, then they must opt out of electronic delivery.

Document delivery

If the bill passed, it would mark the first time in 20 years that the SEC updated its document delivery framework.

In 2023, the agency highlighted the necessity to adopt electronic delivery in a proposal, where then-chair Gary Gensler expressed his dismay over the lack of progress made in modernizing the agency’s system.

The move was celebrated by Eric Pan, CEO of the Investment Company Institute, an industry advocacy group.

“E-delivery will accommodate the preferences of millions of retail investors, enhancing their experience by providing faster, more convenient, and secure access to essential disclosures. We thank the committee members for their support of this bill and look forward to seeing the legislation progress through the House of Representatives,” he said.