The "Improving Disclosure for Investors Act of 2025" enables the SEC to establish rules allowing companies to send investment documents to investors electronically, while ensuring investor access and choice.
Bill Huizenga
Representative
MI-4
The Improving Disclosure for Investors Act of 2025 enables the SEC to establish rules allowing companies to send investment documents to investors electronically, with specific guidelines to protect investors, especially those who prefer paper copies. It mandates the SEC to review and update its rules to permit electronic delivery as an alternative to written documents and requires self-regulatory organizations to align their rules accordingly. The Act defines key terms like "electronic delivery" and "regulatory documents" to clarify the scope and implementation of electronic disclosures. If the SEC fails to finalize the rules in a timely manner, the bill provides guidelines for companies to follow for electronic delivery.
Investment Docs Going Digital? New Bill Allows SEC to Permit Electronic Delivery Within One Year
This legislation, the "Improving Disclosure for Investors Act of 2025," gives the green light for the Securities and Exchange Commission (SEC) to set up rules allowing financial companies to send required investment documents—like prospectuses, account statements, and annual reports—electronically. The bill sets a timeline: the SEC has 180 days to propose these new rules and one year to finalize them, aiming to modernize how investors receive important information.
From Mailbox to Inbox: The Shift to Digital Docs
The core change here is moving away from mandatory paper documents. Section 2 defines "electronic delivery" broadly, covering everything from emails with attachments to notifications that a document is ready on a company website or app. This applies to a wide range of "regulatory documents" that investors currently get stuffed in their physical mailboxes. Think fund prospectuses, trade confirmations, privacy notices, and those hefty annual reports. The types of companies covered—referred to as "covered entities"—include investment firms, brokers, dealers, and investment advisers you likely interact with.
Keeping Control: Investor Safeguards in the Digital Age
Worried about missing something important or just prefer paper? The bill includes several guardrails. Companies shifting to electronic delivery must first send an initial paper notice explaining the change. There's also a built-in transition period of up to 180 days. For the first two years after the switch, you'll get an annual paper reminder highlighting your right to opt-out. Critically, Section 2 explicitly states investors can opt-out at any time and request paper copies instead, free of charge. The rules must also address what happens if an email bounces back (failed delivery) and ensure electronic documents are readable, retainable, and keep personal information confidential.
The Bottom Line: Convenience vs. Accessibility
What does this mean for the average person? If you're comfortable managing finances online, this could mean less paper clutter and potentially faster access to information. For the financial firms, it could translate to significant cost savings on printing and postage. However, the shift isn't without potential hiccups. The convenience factor hinges on reliable internet access and comfort with digital platforms, which isn't universal. The bill requires safeguards, but the onus will be partly on individuals to manage their preferences and ensure they don't overlook crucial information buried in an inbox. Even if the SEC misses its deadline, the bill allows companies to proceed with electronic delivery provided they follow the specified investor protection guidelines.