Why the SEC Needs to Reconsider Regulation E-Delivery
What Is the SEC Proposing with Regulation E-Delivery?
The Securities and Exchange Commission (SEC) proposed Regulation E-Delivery. Under this rule, financial institutions would be allowed to send financial documents to customers electronically by default. That includes:
- Brokerage firms
- Mutual fund companies
- Banks
- Trust companies
- Retirement plan administrators
Currently, these financial disclosures must be sent on paper through the mail by default, with the option to choose digital delivery.
That means issuers of financial information would no longer need permission to switch someone to digital. And it would be the individual’s responsibility to switch back to paper.
That shift puts seniors, rural residents and families without reliable internet at risk of missing essential information they rely on.
How Does Regulation E-Delivery Affect Americans?
Regulation E-Delivery would make electronic delivery the default method for financial disclosures. This would fundamentally change how Americans who prefer paper communications receive, review, and take action on important financial information.
Many Americans receive paper disclosures related to their savings and investments, including:
- 401(k) retirement accounts
- IRAs
- Pension plans
- College Savings Plans
- Mutual fund investments
Millions of Americans rely on paper communications because they do not have reliable access to the internet or a computer, or lack the skills to navigate in a digital environment. That includes seniors, rural residents, low-income families and people with disabilities.
Digital delivery is already an option for those who choose it. Americans should not have to take extra steps to continue receiving paper communications if that is their preference.
Does Everyone Have Reliable Internet Access?
No, millions of Americans do not have reliable internet, a computer or the confidence to manage important documents on a screen. Regulation E-Delivery would leave them behind.
According to the Federal Communications Commission (FCC), many lack access to fixed broadband, including:
- Nearly 28% of people in rural areas
- More than 23% of people on Tribal lands
For many seniors, people with disabilities and lower-income households, a printed statement is not just a preference. Paper is an essential, trusted and secure way to receive and retain important information.
The SEC must make sure everyone can easily access their financial information, not make it harder for millions of Americans.
Can People Already Choose Digital Delivery?
Yes, Americans who want digital delivery can already choose it today. That option is not going away. The proposed Regulation E-Delivery changes the default send method.
Currently, the default method is paper with the option for e-delivery, and it has been for decades. Regulation E-Delivery makes digital delivery the default instead.
But Americans believe that choice should be theirs. Nearly 80% say they want the right to decide how they receive financial and service communications, according to Two Sides North America.
Preserving paper as the default choice for information delivery helps ensure Americans can:
- Continue receiving important investor documents
- Interact in the format that works best for them
Digital Delivery Has Its Risks
While digital storage may be convenient, it is not without cyber threats and vulnerabilities.
Cybersecurity risks and data breaches continue to be a concern. 22% of Americans have been victims of identity theft. The most common type of ID theft is financial.
Paper records offer an alternative to reduce digital theft, hacking or accidental data loss.
Why Must Paper Stay the Default?
When digital becomes the default, paper volumes drop. That loss moves down the value chain, from U.S. paper mills and the people who work in them to the Postal Service that depends on this mail.
The SEC must not move forward with its proposed Regulation E-Delivery. Modernization must be measured by whether information actually reaches people.
This proposal leaves millions behind.
The SEC must:
- Keep paper as the default. Digital is already an option
- Preserve affirmative consent to choose digital
- Maintain policies that protect access to important investor communications
- Ensure the final rule recognizes the continued value and necessity of printed communications