FSI Submits Comment Letter on SEC’s E-Delivery Proposal

The Financial Services Institute (FSI) today submitted a comment letter to the Securities and Exchange Commission (SEC) regarding its proposed Regulation E-Delivery, which would expand firms' and advisors' ability to provide client communications electronically while preserving clients' ability to choose paper delivery.

In its letter, FSI expresses its support for the proposal while recommending several changes to provide greater clarity and flexibility while avoiding overly rigid and operationally complex requirements that do not improve investor understanding or protection.

FSI notes that e-delivery provides investors with faster access to information, improved search and retention of documents, enhanced security, and it reduces the resources and costs associated with printing and mailing documents.

"As technology and clients' expectations continue to evolve, it is important for regulations and the industry to keep pace," said FSI President & CEO Dale Brown. "The SEC's Regulation E-Delivery proposal is a needed step in modernizing the rules so that firms and advisors can deliver information in the way a client prefers. We encourage the SEC to ensure the final rule is flexible, technology-neutral and workable while maintaining strong investor protections."

FSI's recommendations include:

Make the transition and paper-access rules more flexible and efficient.

• Require one clear, paper notice with a maximum transition period of 60 days.
• Allow for a tiered standard for paper document deadlines and fees based on the age and volume of the request.

Requirements should be flexible, secure and technology-neutral.

• Use technology-neutral and secure standards for document sharing by permitting secure alternatives such as encrypted or password-protected PDFs and authenticated portal pages.
• Statements of availability requirements should be mobile-friendly by allowing for layered disclosures.
• While an all-paper delivery option should be required, offering document-by-document delivery preferences should be optional.
• Allow for flexibility in failed-delivery remediation, including telephone calls, secure portal messages, advisor outreach or other electronic channels

Ensure coordination across regulators and firms.

• Harmonize SEC and FINRA standards and implementation dates.
• Clarify the treatment of new clients during the transition period.
• Permit presumption of client-provided address already used for account communications.
• Allow coordination between introducing and clearing firms.

Preserve investor protections.

• Require affirmative consent before including electronic contact information on non-objecting beneficial owners (NOBO) lists.
• Retain existing SEC e-delivery guidance as an alternative compliance pathway.
• Prevent premature escheatment by clarifying that failed delivery, lack of electronic engagement or account inactivity does not indicate abandonment.

Click here to read FSI's full comment letter.