SEC’s Proposed Reg E-Delivery
The SEC’s proposed Regulation E-Delivery would establish a new framework for electronic delivery of required investor communications. This report analyzes the proposed framework, highlights key compliance considerations, and outlines practical planning steps.
Key Takeaways
- Default e-delivery would become available, but would be optional. The regulation would establish a safe harbor allowing firms to default recipients to e-delivery without prior affirmative consent, subject to opt-out and free paper on request.
- The rule would be a federal securities-law framework only. It would not displace FINRA, MSRB, tax, or ERISA delivery requirements. Its relation to state securities laws is less clear.
- The means of e-delivery would be technology-neutral. Email, text, and in-app delivery all appear permissible; the SEC should confirm that in-app and API-based delivery to investor portals and AI agents fall within the framework.
- The rule would provide a defined transition that applies to current paper recipients with an electronic address on file. Moving these existing paper recipients to e-delivery would require 180-day and 30-day paper notices, likely pushing the earliest realistic cutover well into 2027 or later.
- Legislation may shape the outcome. The proposal is largely consistent with the INVEST Act, which passed the House and is now before the Senate; any enacted statute could affect the final framework.
SEC PROPOSES REG E-DELIVERY TO MODERNIZE ELECTRONIC COMMUNICATIONS
As a follow-up to our LawFlash SEC Proposes Regulation E-Delivery to Modernize Electronic Communications, this report provides our perspective on key aspects of proposed Regulation E-Delivery for broker-dealers, investment advisers, registered investment companies, and other funds.
On July 16, the SEC proposed Reg E-Delivery, which, if adopted, would establish a safe harbor that would permit firms to deliver disclosures and reports required by the federal securities laws electronically, subject to the regulation’s conditions being satisfied.
Notably, Reg E-Delivery would permit e-delivery as the default delivery method, which could be used without first obtaining a recipient’s affirmative consent, subject to the recipient’s ability to opt out and receive paper copies free of charge.
The proposal would replace the SEC’s longstanding guidance-based investor opt-in approach to e-delivery, which dates to interpretive releases first issued in 1995. Comments are due by September 21, 2026. In addition to any forthcoming public comments, the proposal may be affected by pending legislation discussed below and may change before adoption.
If adopted, the proposed rule would modernize and streamline the delivery of SEC-required disclosures to investors while creating operational efficiencies and cost savings for investment advisers, broker-dealers, and SEC-regulated investment funds (as well as issuers and other entities subject to delivery obligations under US securities laws).
Affected firms should review the proposal carefully to assess its potential impact, consider whether any aspects could be improved, and evaluate whether to submit comments to the SEC.
