(August 28 – 16:10 ET) – The Securities Industry Association is proposing that the Securities and Exchange Commission allow brokers and issuers to make more use of electronic document delivery.
The SIA says it’s time to re-examine the assumption that paper delivery is better than electronic delivery, and it urges the SEC to develop a whole new regulatory approach to “accommodate the whole range of distribution channels.” While investor protection should remain paramount, the association said existing SEC rules are an “unnecessary impediment to commercially efficient transactions.”
“For a growing number of customers access equals delivery,” it said. If information is freely available on the Internet it can be considered delivered. “In the future, we expect a growing portion of the investing public to prefer electronic access to securities information and securities accounts,” it said in a letter to the SEC.
“Marketing surveys conducted by our firms indicate many customers already feel overwhelmed by the volume of e-mail they receive and would actually prefer to access or ‘pull’ information on their own terms. As this segment of the investing public grows, the ‘access equals delivery’ standard will ultimately become universally acceptable.”
New rules must provide maximum flexibility, and should develop a framework for things such as direct online offerings, rather than relying on case-by-case approval. “They must accommodate, on a rational and fair basis, offers and sales to institutions and offers and sales to individuals, as well as offers and sales made both online and off-line through traditional distribution channels,” the letter said.
“SIA is essentially seeking SEC recognition of the fact that communication between customer and broker is now a two-way street, with customers able to control what they see and when, concludes the letter. “Similarly, the recommendation to liberalize the rules governing communications during the offering process will produce a fairer process with far more opportunities for investor input at each critical stage.”
-IE Staff