August 3, 2022

Honorable Gary Gensler
Chair
U.S. Securities and Exchange Commission
100 F Street N.E.
Washington, DC 20549

Re: E-Delivery in a T+1 Environment

Dear Chair Gensler,

SIFMA1 believes the pending acceleration of the securities settlement cycle heightens the need for the Securities and Exchange Commission (“Commission” or “SEC”) to modernize its rules to make e-delivery the default mechanism for transmitting investor communications and disclosures.2 As highlighted in SIFMA’s T+1 comment letter, the shortened timeframe for sending confirmations, prospectuses, and disclosures to clients may require the use of e-delivery instead of postal mail to meet the proposed delivery timeframes to comply with Rule 15c6-1 under the Securities Exchange Act of 1934 (“Exchange Act”) and related rules.3 When receiving e-delivery, retail investors have quicker access to trade details and may identify errors much sooner than for paper delivery. E-delivery is also more secure and environmentally friendly than paper.

Further, as detailed in our letter dated July 18, 2022, a recent survey commissioned by SIFMA demonstrates investor support for making e-delivery the default mechanism for investor communications including confirmations and prospectuses.4 Approximately 85% of individual investors regardless of age or income-level are comfortable with making e-delivery the default so long as there remains an option to opt-in to paper delivery. The survey results also demonstrate that investors still have challenges in signing up for e-delivery because 42% say they still receive paper documents of some kind but want all communications to be delivered electronically. The Commission can greatly reduce the ongoing burden on firms and investors by making e-delivery the default for all investor communications.

 

1 The Securities Industry and Financial Markets Association (SIFMA) is the leading trade association for broker-dealers, investment banks and asset managers operating in the U.S. and global capital markets. On behalf of our industry’s one million employees, we advocate on legislation, regulation and business policy affecting retail and institutional investors, equity and fixed income markets and related products and services. We serve as an industry coordinating body to promote fair and orderly markets, informed regulatory compliance, and efficient market operations and resiliency. We also provide a forum for industry policy and professional development. SIFMA, with offices in New York and Washington, D.C., is the U.S. regional member of the Global Financial Markets Association (GFMA). For more information, visit http://www.sifma.org.

2 See Shortening the Securities Transaction Settlement Cycle, Exchange Act Release No. 94196 (Feb. 9, 2022) (the “Proposal”).

3 See letter to Vanessa Countryman from Thomas Price and Lindsey Keljo, SIFMA, April 13, 2022 (available at https://www.sifma.org/wp-content/uploads/2022/04/SIFMA-T1-Comment-Letter-Final-04.13.2022-1.pdf).

4 See letter to Chair Gary Gensler from Kenneth E. Bentsen, Jr., SIFMA, July 18, 2022 (available at https://www.sifma.org/resources/submissions/e-delivery-investor-survey-results/).