SEC Proposes E-Delivery Rule to Cut Advisors’ Paperwork

The Securities and Exchange Commission on July 16 opened public comment on Regulation E-Delivery, a proposed rule that would make electronic delivery the default for federally required regulatory disclosures and preserve recipients’ right to request paper copies. The proposal would rescind Rule 30e-3 under the Investment Company Act of 1940 and revise how proxy and tender offer materials are distributed.

Under current SEC guidance, firms generally must deliver certain disclosures on paper unless a client opts into electronic delivery. The proposed rule would allow firms to send required information electronically without first obtaining affirmative consent and would set out acceptable electronic methods for meeting delivery requirements.

The agency said the proposal reflects investor preferences and modern technology. In a statement, SEC Chairman Paul Atkins wrote that “default paper delivery results in a constant source of unnecessary expenses that are paid for by American investors and reduce their investment returns” and described paper defaults as “a relic, not a standard” in an era of technologies such as artificial intelligence and blockchain.

Wealth managers, broker-dealers and asset managers could see lower printing and postage costs if electronic delivery becomes routine. Depending on whether firms, custodians or asset managers have traditionally covered mailing expenses, the savings could reduce firms’ operating costs or affect client fees.

The proposal would shift compliance attention toward recordkeeping and proof of delivery. Firms would need systems that record what was sent, when and to whom to meet audit and examination requirements.

Larry Shumbres, founder and chief executive officer of Archive Intel, wrote in an email that many firms already send statements and proxy materials by encrypted email. He added: “The real change here isn’t the technology. It’s the default.” He also wrote that when e-delivery becomes the default “the burden shifts to demonstrating what was sent, when and to whom. This is where AI earns its place, by auto-classifying outbound communications as covered information, linking each one to the client record and maintaining an audit-ready trail examiners can query.”

The SEC opened the public comment period on July 16. The agency said a final rulemaking timeline will depend on its review of comments and internal deliberations. The proposal would explicitly preserve investors’ ability to request and receive paper copies.