By Mark Pitts
Executive Director, Printing-Writing & Pulp
Internet connectivity is second nature to many – whether it’s from your work desktop, on your smart phone during your morning bus ride, or on your tablet while sitting on the couch. For those of us with such easy access, it may be difficult to remember that there are still significant portions of the U.S. population who don’t have such convenient connection to the Internet.
The Securities and Exchange Commission (SEC) has proposed a new rule (Rule 30e-3) that would eliminate the current default requirement for financial companies to transmit information to their investors in paper form. If passed, financial institutions would issue a letter to investors announcing the shift to electronic delivery. Should the investor not respond to the notice, they would be automatically converted to electronic delivery of important financial information regarding their financial holdings and no longer receive that information in printed form through the mail.
This is a problem for many, as 30 percent of American adults do not have broadband access. For citizens over 65, this number rises to 53 percent and 45 percent of seniors do not own a computer. But 34 percent of this population does own mutual funds. In addition, 30 percent of all investors today do not use the Internet for investment correspondence due to concerns about security.
As if those stats weren’t enough, SEC’s own 2012 study found that 71 percent of American investors prefer to read their annual reports in paper format rather than online.
Not only would this rule abandon those without reliable Internet access, it ignores the already stated preference of the majority of American investors.
This implied consent approach, requiring investors to opt-in to paper or be automatically switched to digital delivery, is a clear example of the government sidestepping its duties to provide basic information to Americans. Implied consent is prohibited in other federal agencies. The IRS, for example, does not allow financial organizations to use implied consent to enroll investors for electronic delivery of tax documents.
Submit Comments to SEC
The SEC is accepting comments on Rule 30e-3 until Jan. 13. You can use this easy form to email or tweet why you think paper should remain the default option for shareholder reports.
Comments can be as simple as:
- Not everyone uses the Internet, so paper shareholder reports should be the default option.
- I am concerned about the security and reliability of my investment communications, and would rather receive investment reports in the mail.
- I find it easier to review complex information in paper form. Shareholder reports should be transmitted on paper.
Submit your comments by January 13 to tell SEC to rescind Rule 30e-3.