Electronic Disclosure Bill Introduced in Senate

Senator Thomas Tillis, R-North Carolina, has introduced the Improving Disclosure for Investors Act in the Senate, after the House version of the bill cleared committee.

The Senate bill, identical to the House version, would require the Securities and Exchange Commission to ensure securities issuers distribute disclosures to investors electronically, rather than using physical notices.

Similar to the House bill, the Senate version of the bill received bipartisan support through six co-sponsors: Senators Katie Boyd Britt, R-Alabama; Ted Budd, R-North Carolina; John W. Hickenlooper, D-Colorado; Gary C. Peters, D-Michigan; Mike Rounds, R-South Dakota and Jeanne Shaheen, D-New Hampshire.

“U.S capital markets have embraced the digital age and rely on far less paper now than they did 25 years ago, and it is past time that we bring disclosure requirements into the 21st century,” Tillis stated in a June 2 press release.

Several organizations offered written support of the latest Senate bill, including Charles Schwab, the Environmental Paper Network, Fidelity Investments, the Investment Company Institute and LPL Financial.

A 2022 study by the Securities Industry and Financial Markets Association, which supports the legislation, found that 85% of retail investors across all age groups are comfortable with e-delivery as the default for investor documents, provided they can still opt in to paper delivery, which the bill does allow.

“The time has come—and arguably is overdue—to implement electronic delivery as the default means for delivering investor communications, while giving investors the power to choose paper delivery if preferred,” said Kenneth E. Bentsen, Jr., SIFMA’s president and CEO, in a statement. “Research shows a large majority of retail investors across demographics, regardless of income or age, want e-delivery for its environmental benefits, speed, and convenience.”

The Senate version of the bill, introduced on May 22, came after the House version of the bill cleared the House Committee on Financial Services on May 20 by a vote of 39 to 11.

If enacted, the bill would give the SEC six months to propose rules for electronic disclosure and one year to finalize them. The final rules would be required to mandate that securities issuers send investors two annual written notices informing them of their right to opt out of e-delivery. Investors who do not opt out within that period would be automatically enrolled in electronic delivery but could revert to paper mail at any time. The legislation mirrors a 2023 bill introduced in both chambers of Congress, which sought to expand electronic filing requirements. That same year, the SEC proposed regulatory changes aimed at increasing the volume of electronically submitted filings.

In 2024, the House passed a related amendment—introduced by Representative Bill Huizenga, R-Michigan—through the Expanding Access to Capital Act of 2023, requiring the SEC to prioritize electronic delivery. The measure passed by a vote of 269 to 153 but stalled in the Senate.