ASA presses SEC to unlock e-delivery for shareholder communications

The American Securities Association is urging Securities and Exchange Commission Chair Paul Atkins to clear a path for wider use of electronic delivery in shareholder communications, saying investors should be able to receive fund and account information digitally while retaining the right to opt out.

In a new letter to Atkins, ASA asked the SEC to use its existing authority to update rules so broker-dealers and investment managers can rely on e-delivery when communicating with customers who prefer it. The group points to how investors already manage most of their financial lives online and argues that the agency’s paper-first framework is out of step with that reality.

“Modernizing e-delivery will save America’s Main Street investors, retirement savers, and working families millions of dollars while reducing the risk of fraud,” ASA president and chief executive Chris Iacovella said in a the letter Monday.

He said that ASA “applauds Chairman Atkins for speaking positively about the benefits of e-delivery for investors and the need for the SEC to update its regulations in this area,” noting that a recent House vote should strengthen the case for regulatory change.

That vote came last month, when the House passed H.R. 3383, the Incentivizing New Ventures and Economic Strength Through Capital Formation Act. Folded into the bill is the Improving Disclosure for Investors Act, a bipartisan measure led by Reps. Bill Huizenga and Brad Sherman. Their proposal would allow customers of investment funds and broker-dealers to receive communications electronically and opt out of e-delivery at any time.

ASA embraces that opt-out structure in its own ask to the SEC, framing e-delivery as a choice that should be readily available rather than a one-way push away from paper. At the same time, the group is aligning itself with a broader industry campaign that has explicitly called for default digital delivery, with paper as an option for those who want it.

Trade groups including the Securities Industry and Financial Markets Association, the Investment Adviser Association, and the Investment Company Institute have been pressing the SEC for years to flip the model so that e-delivery becomes the starting point. In a 2020 discussion paper, industry groups argued that “e-delivery with notifications via email, website or mobile application, or text messaging is faster, safer, and more timely than physical delivery through the postal service” and said “the time has come to allow firms to ‘flip the model’ of delivery.”

Those groups, along with large firms like Fidelity, have leaned on investor survey data suggesting that a strong majority of clients prefer digital communications and that an e-delivery default could generate significant cost savings. ICI has separately estimated that default e-delivery for fund disclosures could save funds and shareholders billions of dollars over several years, while still allowing investors to request paper documents whenever they want.

“ICI’s data finds that – even using conservative estimates – American middle-class investors would save several billion dollars by switching to default e-delivery,” Eric Pan, president and CEO of ICI, said in a November statement. “Not only is e-delivery cost efficient, investors want it. Our survey shows a vast majority of Americans support an e-delivery default.”

ASA’s letter echoes those efficiency arguments but keeps its focus on investor preference and SEC authority. The association argues that paper-based requirements can delay important information, add unnecessary printing and mailing costs, and raise questions about whether investors actually read lengthy envelopes that arrive by mail.

"In the past, you have spoken positively about the benefits of e-delivery for investors4 and the need for the SEC to update its regulations in this area," Iacovella said. "Now, with a strong bipartisan majority voting to pass legislation in agreement with your policy views, we urge the SEC to use its existing authority to amend its current regulations and allow for e-delivery."