Huizenga, Auchincloss, Steil, and Nickel Introduce Bipartisan Improving Disclosure for Investors Act
Washington, March 27, 2023
Today, Congressman Bill Huizenga (R-MI), announced the introduction of the Improving Disclosure for Investors Act. This bipartisan bill was introduced with Congressman Jake Auchincloss (D-MA), Congressman Bryan Steil (R-WI), and Congressman Wiley Nickel (D-NC). The Improving Disclosure for Investors Act directs the Securities and Exchange Commission (SEC) to engage in rulemaking that would allow registered investment companies to satisfy their obligation to deliver regulatory documents to investors under the federal securities laws using electronic means. Congressman Huizenga released the following statement regarding the Improving Disclosure for Investors Act.
“The Improving Disclosure for Investors Act is a commonsense reform that is designed to modernize disclosure requirements and bring them into the modern era,” said Congressman Huizenga. “By allowing disclosures through electronic means it will reduce costs and increase efficiency while still providing investors the ability to continue with paper delivery if that is their preferred method.”
“This commonsense bipartisan legislation is the next step in the decades-long process of modernizing the SEC’s electronic delivery rules while providing strong investor protections. This pro-business bill puts an end to the enormous amount of waste from paper being sent through the mail just to be thrown away. I’m thrilled to join Rep. Huizenga in co-leading this bill,” said Congressman Nickel.
“We live in an increasingly digital world. Investors want easier access to their disclosure documents. Our public policies have failed to keep up with the speed of business. The Improving Disclosures to Investors Act acknowledges that electronic disclosures are often the preferred option for investors. This is a commonsense solution to modernize a dated policy,” said Congressman Steil.
The SEC currently permits electronic delivery of certain documents under the federal securities laws, subject to requirements that a registrant provide notice that the information is available electronically, the investor has effective access to such information, and the registrant either obtains evidence to show actual delivery or obtains informed consent from the investor (“opt-in” requirement). The SEC has not comprehensively updated this framework in over 20 years.
Last week, the SEC announced a proposal that would require electronic submissions for nearly all forms, filings, and other materials. The proposal further highlights the need for a more digitalized reporting ecosystem.