Tillis-Led Bill Facilitates eDelivery of SEC Docs to Investors

Tillis-Led Bill Facilitates eDelivery of SEC Docs to Investors

March 7, 2024 : United States Senator Thom Tillis (R-NC) has unveiled a bipartisan bill to modernize the Securities and Exchange Commission’s (SEC) disclosure requirements. This legislation proposes transitioning the default communication method for certain required disclosure documents from paper to electronic delivery.

Senator Tillis emphasized the need for modernization, stating, “U.S. capital markets have embraced the digital age and rely on far less paper now than they did 20 years ago, and it is past time that we bring disclosure requirements into the 21st century.”

The proposed legislation seeks to enhance efficiency and significantly contribute to environmental sustainability by reducing paper usage. However, it ensures investors can still receive physical copies of disclosure documents, striking a balance between digital transformation and environmental responsibility.

Currently, the SEC permits eDelivery under specific conditions. Companies must provide notice of electronically available information, verify investor access to this information, and either obtain evidence of successful delivery or receive informed consent from the investor.

This bill proposes streamlining these requirements, potentially facilitating a broader adoption of eDelivery. Proponents argue that this shift would benefit the environment, increase efficiency, and potentially revolutionize investor access to information by offering a more convenient and readily available format, fostering a more informed and engaged investor community.

However, concerns regarding potential digital literacy gaps and ensuring equitable access to technology for all investors necessitate further consideration. Additionally, robust cybersecurity measures remain crucial to safeguard sensitive financial information in the digital realm.

The proposed legislation represents a potential step toward modernizing financial communication practices. While its ultimate impact and effectiveness remain to be seen, it has ignited crucial discussions regarding the need to balance technological advancements with investor protection and equitable access to information.