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On Friday, Congressman Bill Huizenga (R-MI), Vice Chairman of the House Committee on Financial Services, announced the introduction of the Improving Disclosure for Investors Act. This bipartisan bill was introduced with Congressman Brad Sherman (D-CA), Congressman Bryan Steil (R-WI), and Congressman Jake Auchincloss (D-MA). 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.

After introducing this bipartisan legislation, Congressman Huizenga released the following statement:

“The Improving Disclosure for Investors Act is designed to modernize disclosure requirements, building on President Trump’s efforts to make our financial system more efficient and inclusive” said Congressman Huizenga. “Continuing to send customers paper disclosure notices is not only wasteful but fails to acknowledge that digital communications are safer and more effective in reaching all Americans. I look forward to working with my colleagues in the House as well as the Securities and Exchange Commission to finally make this a reality.”

Background

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.

In 2023, 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.

In the 118^th Congress, the House of Representatives, overwhelming passed the Improving Disclosure for Investors Act with a vote of 269-153.