SIFMA Weighs In: How to Get E-Delivery Right

• For years, SIFMA has made the case that it was time for the SEC to modernize how required investor communications get delivered.
• The SEC took a major step in that direction with the proposal of Regulation E-Delivery.
• Last week, SIFMA and SIFMA AMG submitted detailed comments to help get the new framework right.

A Rule Worth Getting Behind

In July, the SEC proposed “Regulation E-delivery” which would let firms make electronic delivery the default way to send required disclosures — things like , confirmations, prospectuses, and advisory brochures — without needing to collect affirmative consent first. Investors would always retain the choice to receive paper. SIFMA strongly supports this shift.

As SIFMA stated in our recently filed comment letter, the rule “will result in significant benefits for covered recipients who increasingly prefer to access information electronically and substantial cost savings for covered entities and shareholders.”

It is the culmination of years of advocacy, and the proposal reflects many of the core principles SIFMA has long asked for, including those laid out in a detailed letter sent last September.

Why It Matters

The numbers make the case on their own. Firms send an average of fourteen documents per retail account each year — billions of documents industry-wide — and a SIFMA member survey found that paper delivery costs roughly $1.45 per document, compared to less than $0.20 electronically. Large firms alone spend well over $100 million a year each just getting paper into investors’ hands. Modernizing delivery frees up real resources that firms can reinvest in the products, services, and technology investors actually want.

In addition, the SEC’s own OMB filing on Rule 10b-10 confirmation delivery found that the industry pays over $20 billion a year to deliver paper trade confirmations — 80% of the $25 billion total cost of delivering confirmations both electronically and by mail.

It is also simply how people already communicate. Investors overwhelmingly manage their financial lives online and via mobile devices — and, as SIFMA has noted, electronic delivery can be more secure than paper, not less, since digital channels support identity verification, encryption, and faster notice when something needs attention.

Making the Rule Work in Practice

SIFMA’s comments submitted to the SEC focus on ensuring this valuable policy idea is also a workable rule. Among the recommendations:

• Give firms flexibility on electronic addresses — including addresses obtained through affiliates, employers, or account transfers — so firms aren’t forced to re-collect information they already have through a trusted relationship.
• Preserve existing practices that already serve investors well, like postcard notice of the electronic availability of information.
• Protect investor privacy by not requiring broker-dealers to hand over customers’ electronic contact information to third parties.
• Right-size the rules for institutional investors, who overwhelmingly prefer to access information on their own terms rather than receive a notice for every document.
• Shorten the transition period from the proposed 180 days to a more workable 60–90 days, and streamline the notice process so it doesn’t become its own paperwork burden.
• Avoid duplicative policies, procedures, and recordkeeping requirements that firms are already subject to under existing securities laws.

Looking Ahead

This is a case where policy direction and the practical details can both work in investors’ favor.

SIFMA’s message to the SEC is straightforward: finalize a rule that reflects how people actually manage their financial lives today, while giving firms the operational flexibility to implement it efficiently and securely.

SIFMA appreciates the work of Brian Baltz and James Anderson of Wilkie, Farr and Gallagher, who were retained to counsel on this issue and helped draft the comment letter.