The proposal, known as Regulation E-Delivery, would replace the SEC’s existing framework, under which many investor communications are still required to be delivered in paper form unless recipients consent to electronic delivery. Instead, companies and other regulated entities would be able to send disclosures electronically by default while retaining investors’ ability to opt out and continue receiving paper documents. The proposal is open for public comment for 60 days.
Although much of corporate America has shifted toward digital communications over the past two decades, governance professionals have continued to navigate rules that were developed before electronic communication became the norm. Proxy statements, annual reports, prospectuses, shareholder reports and other required disclosures are frequently made available online, but existing SEC requirements still create operational complexity around how those documents are delivered.
If adopted, Regulation E-Delivery would create a consistent framework across the federal securities laws, replacing a patchwork of SEC guidance with a single set of requirements governing electronic delivery. Companies, broker-dealers, investment advisers and investment companies would all be able to rely on the same structure, provided they meet the conditions to ensure investors receive and can access required information.
SEC chair Paul Atkins described the proposal as a necessary update to reflect how investors access information today.
'In an age of artificial intelligence and blockchain technology, a default to paper delivery should be a relic, not a standard,' Atkins said when the proposal was announced.
The SEC also argues that moving to electronic delivery would reduce printing and postage costs while making regulatory information easier to access. According to Atkins, 'default paper delivery results in a constant source of unnecessary expenses that are paid for by American investors and reduce their investment returns.’
From a governance perspective, the proposal extends beyond cost savings. Annual meeting materials, proxy statements and shareholder reports remain central to board accountability and shareholder engagement. A standardized electronic delivery framework could simplify compliance while allowing companies to communicate with shareholders more quickly and through channels that many investors already use.
The proposal would not eliminate paper communications altogether. Investors would continue to have the right to request physical copies at any time, an acknowledgment that not all shareholders have the same level of digital access or preference. Before switching existing paper recipients to electronic delivery, firms would also be required to provide advance notice explaining the change and how recipients can opt out.
The SEC’s proposal also introduces operational safeguards. Covered entities would need to maintain a valid electronic address, implement policies to identify failed deliveries and take reasonable steps to remedy delivery failures. These requirements are intended to ensure that electronic delivery does not come at the expense of reliable investor communications.
Whether Regulation E-Delivery is ultimately adopted in its current form will depend in part on feedback received during the consultation period. Market participants are expected to broadly support the proposal given the potential efficiencies, while investor advocates are likely to focus on whether sufficient safeguards remain for shareholders who continue to rely on paper communications.
Natalie Bannerman
Natalie is a former telecoms and infrastructure journalist, a role she held for nearly seven years. Before this, she worked in the B2C startup space, covering lifestyle, arts and culture reporting. As senior reporter for Governance Intelligence she...
