SEC Chairman Jay Clayton. (Photo: New York Law Journal)
The Securities and Exchange Commission on Monday adopted a new rule, 30e-3, which creates an optional "notice and access" method for electronic delivery of shareholder reports. The agency is also seeking comment on improving fund disclosure as well as feedback on the fees that intermediaries like broker-dealers charge for delivering fund reports.
"These actions are an important part of the Commission's effort to better serve Main Street investors in our ever changing marketplace," SEC Chairman Jay Clayton said in a statement.
The new rule, Clayton said, "significantly modernizes delivery options for fund information while preserving the right of fund investors to receive information in paper form as they do today."
Clayton said he looked forward to public feedback "on next steps," and encouraged those with an interest in fund disclosure, especially Main Street investors, "to give us their ideas on how to improve the design, delivery and content of fund disclosures."
Rule 30e-3 requires that shareholder reports and other specified documents be available to investors on a publicly available website, allowing improved search functions, the ability to hyperlink and move quickly within a document, and the option to more conveniently save a document for future reference.
Clayton stated that "this is only the beginning of the Commission exploring the ways that electronic documents can be more interactive and ultimately useful for investors."
The rule, he said, "also will help funds save on printing and mailing costs, which are ultimately borne by fund investors."
The new rule also includes modifications to improve investor protection, including an extended transition period and important protections for investors who wish to receive their shareholder reports in paper.
The SEC notes that it's important that investors receive "advance notice of the coming change and ample opportunity to let funds and intermediaries know how they would like to receive their reports."
