Electronic Disclosure Bill Reintroduced in House

Representative Bill Huizenga, R-Michigan, has reintroduced the Improving Disclosure for Investors Act, which would require the Securities and Exchange Commission to ensure securities issuers distribute disclosures to investors electronically, rather than using physical notices.

The bill, introduced on March 27, would limit the number of paper investment disclosures, but allows investors to opt out of electronic delivery. The bill has been referred to the House Committee on Financial Services, of which Huizenga is vice chair, and awaits a hearing or a vote.

If passed, the SEC would have six months to propose rules for providing e-disclosures and one year to finalize them.

Under the bill, the SEC’s final rule must require securities issuers to send investors two annual written notices notifying them of their ability to opt out of e-delivery. If investors fail to opt out during that period, they would automatically be enrolled, but would maintain the ability to opt out at any time and revert to receiving mailed paper disclosures.

“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,” Huizenga said in a statement. “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.”

In 2023, the SEC proposed amendments which intended to increase the number of filings submitted electronically.

The current bill closely resembles a 2023 bill of the same name that was introduced in the House and Senate. In 2024, the House passed an amendment—authored by Huizenga and that required the SEC to prioritize electronic delivery—via the Expanding Access to Capital Act of 2023 by a vote of 269 to 153, but the full bill never advanced out of committee in the Senate.

The legislation has received bipartisan support through its five co-sponsors: Representatives Jake Auchincloss D-Massachusetts; Brittany Pettersen, D-Colorado; and Brad Sherman, D-California; Bryan Steil, R-Wisconsin; and Ann Wagner, R-Missouri.

Several financial services organizations have lauded the bill, including the Investment Company Institute, the Investment Adviser Association and the Securities Industry and Financial Markets Association.

“The bipartisan Improving Disclosure for Investors Act is an important step toward ensuring all investors can receive their disclosures electronically,” said Eric Pan, CEO of the Investment Company Institute, in a statement. “E-delivery will transform investor communication and engagement, making information more accessible and efficient.”