SIFMA Urges Recognition of E-Delivery as Standard Form of Communication
Commentary by Steven Lofchie
SIFMA urged the SEC to adopt e-delivery as the standard medium for delivering investor communications and disclosures.
In a comment letter, SIFMA cautioned that as the industry transitions to a T+1 settlement cycle, the compressed timeline between trade date and settlement date make it difficult for firms to comply with investor communication obligations. The association asserted that e-delivery is more effective than postal mail and encouraged the SEC to allow broker-dealers to adopt e-delivery as the default transmission method.
SIFMA reported that the majority of retail investors favor making e-delivery the default as long as investors can still opt for paper delivery. Additionally, SIFMA said that through e-delivery retail investors have "quicker access to trade details and may identify errors much sooner," adding that e-delivery has been found to be more secure and is more environmentally friendly.
Further, SIFMA recommended that the SEC refrain from including the phrase "in writing" in the final T+1 rulemaking to avoid inconsistency with the E-Sign Act.
Commentary
If anyone wanted evidence of how long regulatory change takes to keep with the real world, the SEC's failure to recognize email delivery as the ordinary format of investor communications can serve as example number 1. Beyond notices to investors, many of the SEC's rules do not provide for regulated firms to give notice to the SEC by email.
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