SEC proposes framework permitting default e-delivery of disclosures

If adopted, Reg E-Delivery would generally supersede the SEC’s current guidance-based e-delivery framework, which requires issuers and market intermediaries to obtain affirmative consent from disclosure recipients before using e-delivery. Reg E-Delivery would permit covered entities to establish e-delivery as their default delivery method unless a recipient affirmatively opts out. 

To facilitate the Reg E-Delivery framework, the proposal would rescind and amend certain existing regulations, some of which are discussed in more detail later in this briefing. Notably, the proposal would rescind Rule 30e-3 under the Investment Company Act of 1940 (1940 Act), which provides alternative means for registered investment companies to satisfy shareholder report transmission requirements. It would also amend certain rules addressing the dissemination of proxy materials and tender offer materials in Regulations 14A and 14C and Rule 14d-5 under the Securities Exchange Act of 1934 (Exchange Act).

Scope and framework of Reg E-Delivery

The proposal would apply broadly across federal securities laws and permit covered entities to deliver covered information to covered recipients electronically.

• Covered entities would include any entity that has an obligation to deliver covered information to a covered recipient under the federal securities laws. This would include registered investment companies, business development companies (BDCs), investment advisers, broker-dealers, transfer agents and certain third parties with statutory delivery obligations (such as bidders for third-party tender offers and dissidents in contested proxy solicitations).
• Covered information would include any information required to be delivered to a covered recipient under the federal securities laws. Depending on the covered entity, this could include fund prospectuses, annual and semi-annual shareholder reports, proxy materials and tender offer materials.
• Covered recipients would include any current or prospective customer, client, investor, security holder, counterparty or similar recipient entitled to receive such information. It would not include the SEC, other federal or state regulators or self-regulatory organizations.

Conditions for reliance on Reg E-Delivery

A covered entity could rely on Reg E-Delivery where the following conditions are met: (1) the covered recipient has provided an electronic address; (2) the covered entity has provided a prominent disclosure to the covered recipient that it will send covered information to the electronic address provided; and (3) the covered recipient has not opted out of e-delivery. Covered recipients would retain the right to opt out of e-delivery and to receive a paper version of covered information free of charge upon request at any time.

Permitted methods of e-delivery

The proposal would establish two permissible methods of e-delivery:

• Statement of availability: Required for covered information containing personal financial information (PFI) and available for all other covered information. The covered entity delivers an electronic notification, such as an email with a link, directing the recipient to a website where the covered information can be accessed through a process reasonably designed to safeguard the information.
• Direct delivery: Available only for covered information that does not include PFI. All of the covered information is delivered in the body of the electronic communication or as an attachment, in a widely available format that is convenient for reading, printing and permanent retention.

Failure identification and website requirements

Covered entities would be required to adopt and implement written policies and procedures reasonably designed to identify and remediate failed e-deliveries. Websites on which covered information is made available would need to meet certain requirements relating to timing, availability, format and retention.

E-SIGN Act exemption

The proposal would exempt covered information delivered under Reg E-Delivery from the consumer consent requirements of the Electronic Signatures in Global and National Commerce Act (E-SIGN Act). E-delivery of information statutorily required to be delivered “in writing” would otherwise trigger the E-SIGN Act’s multi-step affirmative consent procedures.

Transition process for current paper recipients

Reg E-Delivery would impose a special transition process for covered recipients who, as of the effective date, receive covered information in paper format. The transition process would require two sequential paper notices to be sent to the covered recipient about the transition and the ability to opt out of e-delivery: (1) an initial notice, provided at least 180 days prior to the transition; and (2) a follow-up notice, provided at least 30 days prior to the transition.

Considerations for BDCs and closed-end funds

The proposal carries particular significance for BDCs and registered closed-end funds in several respects:

• Rescission of Rule 30e-3. The proposal would rescind Rule 30e-3 under the 1940 Act, which currently permits closed-end funds and BDCs to deliver shareholder reports by posting a report online and sending recipients a paper notice of availability. Entities would instead rely on Reg E-Delivery to deliver shareholder reports electronically, once the applicable conditions are satisfied. Funds and BDCs that currently rely on Rule 30e-3 may need to conduct shareholder outreach to obtain electronic addresses to take advantage of Reg E-Delivery. This may present logistical challenges for BDCs and funds that have widely dispersed retail shareholder bases.
• Elimination of “notice and access” delivery of proxy materials. Reg E-Delivery would supersede the SEC’s current “notice and access” guidance, which allows a registrant to deliver proxy materials by posting the materials online and mailing a paper notice of internet availability to shareholders at least 40 calendar days before the meeting. The proposal would require a registrant soliciting proxies to deliver a full set of proxy materials in paper to any shareholder who opts out of e-delivery or does not provide an electronic address. Reg E-Delivery would eliminate the 40-calendar-day deadline under the “notice and access” model; proxy materials would need to be delivered no later than the date required under the federal securities laws.
• Third-party tender offers and proxy contests. The proposal would clarify that issuers and third-party bidders may deliver tender offer materials by e-delivery. Under Reg E-Delivery, an issuer may be required to distribute a dissident’s or bidder’s materials if the issuer cannot or will not provide shareholders’ electronic addresses to the soliciting party.

BDCs and closed-end funds should begin reviewing their policies and procedures to determine what changes would be required or what new processes may need to be implemented to take advantage of the proposal, if adopted.

Compliance date

The proposal includes a two-year interim period before the SEC’s current e-delivery interpretive guidance would be rescinded. The transition period would begin 60 days after publication of any final rule in the Federal Register. 

Comment period

The public comment period will remain open for 60 days following publication of the proposing release in the Federal Register, with comments due on or before September 21, 2026.

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If you have any questions about this Legal Briefing, please feel free to contact any of the attorneys listed or the Eversheds Sutherland attorney with whom you regularly work.