Legislation offered by Huizenga, Steil helps modernize SEC’s document rules

U.S. Reps. Bill Huizenga (R-MI) and Bryan Steil (R-WI) on March 27 unveiled a bipartisan bill that would authorize the next step in the decades-long modernization of the Securities and Exchange Commission’s (SEC’s) electronic delivery rules while providing strong investor protections. 

The Improving Disclosure for Investors Act of 2023, H.R. 1807, which Rep. Huizenga sponsored with three original cosponsors, including Rep. Steil and U.S. Rep. Jake Auchincloss (D-MA), would direct the SEC to engage in a rulemaking that would allow registered investment companies to satisfy their obligation to deliver regulatory documents to investors under the federal securities laws using electronic means, according to a bill summary provided by the lawmakers.

“The Improving Disclosure for Investors Act is a commonsense reform that is designed to modernize disclosure requirements and bring them into the modern era,” Rep. Huizenga said. “By allowing disclosures through electronic means it will reduce costs and increase efficiency while still providing investors the ability to continue with paper delivery if that is their preferred method.”

Currently, the SEC permits electronic delivery of certain documents under the federal securities laws, subject to requirements that a registrant provides notice that the information is available electronically, the investor has effective access to such information, and the registrant either obtains evidence to show actual delivery or obtains informed consent from the investor, the summary says, noting that the SEC has not updated this framework in more than 20 years.

“We live in an increasingly digital world. Investors want easier access to their disclosure documents. Our public policies have failed to keep up with the speed of business,” said Rep. Steil. “The Improving Disclosures to Investors Act acknowledges that electronic disclosures are often the preferred option for investors. This is a common-sense solution to modernize a dated policy.”