SEC Proposes Regulation E-Delivery

On July 16 the SEC proposed Regulation E-Delivery, which would make electronic delivery the default method for information required to be delivered under the federal securities laws. The proposal is broad in scope, reaching issuers, investment advisers, registered investment companies, and broker-dealers. Chairman Atkins put the rationale plainly: “In an age of artificial intelligence and blockchain technology, a default to paper delivery should be a relic, not a standard.”

The Core Change

Today firms generally rely on investor consent to deliver electronically. The proposal reverses that default. Three conditions would need to be satisfied:

• The firm has the recipient’s electronic address, defined as an email address, a mobile phone number, or any other means of electronic communication.
• The firm has provided prominent disclosure that information will be delivered electronically.
• The recipient has not opted out.

The rule would not mandate electronic delivery, and it is not the only way to satisfy a delivery obligation. Delivery that does not meet every condition may still comply; what the rule offers is assurance that it does. Clients who already opted in to electronic delivery would see no change.

Two Permitted Delivery Methods

1. Direct delivery places the information in the body of an electronic message or attaches it to the message.
2. A statement of availability instead notifies the recipient that the information is available, provides a link, and must state that the information may not remain available indefinitely and that the recipient may wish to download it.

Paper Rights and Transition Notices

• A recipient could request paper at any time, and the firm would generally have to send it free of charge within three business days of the request.
• Where the securities laws prescribe a retention period, the paper right runs for that period. Where they do not, a recipient could request paper for any information received in the preceding two years.
• Recipients currently receiving paper would get an initial notice at least 180 days before transition and a second notice 30 days before.
• Recipients could update their electronic address at no charge.

One New Written Procedure

The proposal would require a single new policy: procedures reasonably designed to identify and remediate failed electronic delivery. On a failure, the firm would have to promptly obtain a new electronic address or deliver in paper until one is provided. In practice this converts email bounce-backs from an operations annoyance into a documented compliance process, and it is the one genuinely new operational requirement here.

Personal Financial Information

The proposal would not permit transmission of personal financial information, defined as an account number or details regarding a specific securities transaction. That information could instead be made available through a secure website or application, and the proposal contemplates that it remain accessible for at least three years. Regulation S-P obligations would continue to apply in full. The SEC points to passwords and, where appropriate, two-factor authentication, biometrics, or cryptography as means of protecting this information.

What a Final Rule Would Replace

A final rule would rescind the SEC’s 1995 and 1996 electronic delivery guidance, amend the 2000 interpretive release, and eliminate Investment Company Act Rule 30e-3, which currently governs internet availability of shareholder reports.

Documents Potentially Covered

• Form ADV brochures and brochure supplements, and Form CRS.
• Marketing and testimonial disclosures.
• Agency cross-transaction disclosures.
• Custody rule account statement notices.
• Fund prospectuses and annual and semiannual shareholder reports.
• Trade confirmations and issuer disclosure documents, including proxy statements and tender offer materials.

Current Status

The proposal contains more than 200 questions for commenters. Comments are due Monday, September 21, 2026. If adopted, implementation would follow 180 days after publication of the final rule. Commissioner Hester Peirce supported the proposal but criticized it for retaining a paper-first design mentality, and asked whether it should be expanded to cover firms that deliver only electronically by agreement with clients.

Takeaways

• Do not change delivery practices yet. The rule is proposed, not adopted.
• Inventory every document you deliver, how you deliver it, and how you evidence delivery.
• Test whether your systems can detect bounce-backs, maintain current electronic addresses, and track paper opt-outs.
• Keep electronic delivery planning connected to Regulation S-P, cybersecurity, and privacy controls.
• Consider commenting by September 21, particularly on the three-business-day paper turnaround.