[Congressional Bills 118th Congress]
[From the U.S. Government Publishing Office]
[S. 3815 Introduced in Senate (IS)]
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118th CONGRESS
2d Session
S. 3815
To direct the Securities and Exchange Commission to promulgate rules
with respect to the electronic delivery of certain required
disclosures, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
February 27, 2024
By Mr. Thune (for Mr. Tillis (for himself and Mr. Hickenlooper))
introduced the following bill; which was read twice and referred to the
Committee on Banking, Housing, and Urban Affairs
_______________________________________________________________________
A BILL
To direct the Securities and Exchange Commission to promulgate rules
with respect to the electronic delivery of certain required
disclosures, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Improving Disclosure for Investors
Act of 2024''.
SEC. 2. DEFINITIONS.
In this Act:
(1) Commission.--The term ``Commission'' means the
Securities and Exchange Commission.
(2) Covered entity.--The term ``covered entity'' means--
(A) an investment company, as defined in section
3(a)(1) of the Investment Company Act of 1940 (15
U.S.C. 80a-3(a)(1)), that is registered under such Act;
(B) a business development company, as defined in
section 2(a) the Investment Company Act of 1940 (15
U.S.C. 80a-2(a));
(C) a registered broker or dealer, as those terms
are defined in section 3(a) of the Securities Exchange
Act of 1934 (15 U.S.C. 78c(a));
(D) a registered municipal securities dealer, as
defined in section 3(a) of the Securities Exchange Act
of 1934 (15 U.S.C. 78c(a));
(E) a registered government securities broker or
government securities dealer, as defined in section
3(a) of the Securities Exchange Act of 1934 (15 U.S.C.
78c(a));
(F) a registered investment adviser, as defined in
section 202(a) of the Investment Advisers Act of 1940
(15 U.S.C. 80b-1(a));
(G) a registered transfer agent, as defined in
section 3(a) of the Securities Exchange Act of 1934 (15
U.S.C. 78c(a)); or
(H) a registered funding portal, as defined in
section 3(a) of the Securities Exchange Act of 1934)
(15 U.S.C. 78c(a)).
(3) Electronic delivery.--The term ``electronic delivery'',
with respect to regulatory documents, includes--
(A) the direct delivery of such regulatory document
to an electronic address of an investor;
(B) the posting of such regulatory document to a
website and direct electronic delivery of an
appropriate notice of the availability of the
regulatory document to the investor; and
(C) an electronic method reasonably designed to
ensure receipt of such regulatory document by the
investor.
(4) Regulatory documents.--The term ``regulatory
documents'' includes--
(A) prospectuses meeting the requirements of
section 10(a) of the Securities Act of 1933 (15 U.S.C.
77j(a));
(B) summary prospectuses meeting the requirements
of section 230.498 or 230.498A of title 17, Code of
Federal Regulations;
(C) Statements of Additional Information, as
defined in section 270.30e-3(h) of title 17, Code of
Federal Regulations;
(D) annual and semiannual reports to investors
meeting the requirements of section 30(e) of the
Investment Company Act of 1940 (15 U.S.C. 80a-29(e));
(E) notices meeting the requirements of section
270.19a-1 of title 17, Code of Federal Regulations;
(F) confirmations and account statements meeting
the requirements of section 240.10b-10 of title 17,
Code of Federal Regulations;
(G) proxy statements meeting the requirements of
section 240.14a-3 of title 17, Code of Federal
Regulations;
(H) privacy notices meeting the requirements of
Regulation S-P under subpart A of part 248 of title 17,
Code of Federal Regulations;
(I) affiliate marketing notices meeting the
requirements of Regulation S-AM under subpart B of part
248 of title 17, Code of Federal Regulations; and
(J) all other regulatory documents required to be
delivered by covered entities to investors under the
securities laws and the rules and regulations of the
Commission and the self-regulatory organizations.
(5) Securities laws.--The term ``securities laws'' has the
meaning given the term in section 3(a) of the Securities
Exchange Act of 1934 (15 U.S.C. 78c(a)).
(6) Self-regulatory organization.--The term ``self-
regulatory organization'' means a self-regulatory organization,
as defined in section 3(a) of the Securities Exchange Act of
1934 (15 U.S.C. 78c(a)).
(7) Website.--The term ``website'' means an internet
website or other digital, internet, or electronic-based
information repository, such as a mobile application, to which
an investor of a covered entity has been provided reasonable
access.
SEC. 3. ELECTRONIC DELIVERY.
(a) Promulgation of Rules.--Not later than 180 days after the date
of the enactment of this section, the Commission shall propose and, not
later than 1 year after the date of the enactment of this section, the
Commission shall finalize, rules, regulations, amendments, or
interpretations, as appropriate, to allow a covered entity to satisfy
the obligation of the entity to deliver regulatory documents required
under the securities laws to investors using electronic delivery.
(b) Required Provisions.--Rules, regulations, amendments, or
interpretations the Commission promulgates pursuant to subsection (a)
shall--
(1) with respect to investors that do not receive all
regulatory documents by electronic delivery, provide for--
(A) delivery of an initial communication in paper
form regarding electronic delivery;
(B) a transition period not to exceed 180 days
until such regulatory documents are delivered to such
investors by electronic delivery; and
(C) during a period not to exceed 2 years following
the transition period set forth in subparagraph (B),
delivery of an annual notice in paper form solely
reminding such investors of the ability to opt out of
electronic delivery at any time and receive paper
versions of regulatory documents;
(2) set forth requirements for the content of the initial
communication described in paragraph (1)(A);
(3) set forth requirements for the timing of delivery of a
notice of website availability of regulatory documents and the
content of the appropriate notice described in section 2(3)(B);
(4) provide a mechanism for investors to opt out of
electronic delivery at any time and receive paper versions of
regulatory documents;
(5) require measures reasonably designed to identify and
remediate failed electronic deliveries of regulatory documents;
(6) set forth minimum requirements regarding readability
and retainability for regulatory documents that are delivered
electronically; and
(7) for covered entities other than brokers, dealers,
investment advisers registered with the Commission, and
investment companies, require measures reasonably designed to
ensure the confidentiality of personal information in
regulatory documents that are delivered to investors
electronically.
(c) Treatment of Revisions Not Completed in a Timely Manner.--If
the Commission fails to finalize the rules, regulations, amendments, or
interpretations required under subsection (a) before the date specified
in such subsection--
(1) a covered entity may deliver regulatory documents using
electronic delivery in accordance with subsection (b); and
(2) such electronic delivery shall be deemed to satisfy the
obligation of the covered entity to deliver regulatory
documents required under the securities laws.
(d) Other Required Actions.--
(1) Review of rules.--The Commission shall--
(A) not later than 180 days after the date of
enactment of this Act, conduct a review of the rules
and regulations of the Commission to determine whether
any such rules or regulations require delivery of
written documents to investors; and
(B) not later than 1 year after the date of
enactment of this Act, promulgate amendments to such
rules or regulations to provide that any requirement to
deliver a regulatory document in writing may be
satisfied by electronic delivery.
(2) Actions by self-regulatory organizations.--Each self-
regulatory organization shall adopt rules and regulations, or
amend the rules and regulations of the self-regulatory
organization, consistent with this Act and consistent with
rules, regulations, amendments, or interpretations finalized by
the Commission pursuant to subsection (a).
(3) Applicability.--This subsection shall not apply to a
rule or regulation issued pursuant to a Federal statute if that
Federal statute specifically requires delivery of written
documents to investors.
(e) Exemption From Certain Requirements.--Section 101(c) of the
Electronic Signatures in Global and National Commerce Act (15 U.S.C.
7001(c)) shall not apply with respect to a regulatory document
delivered in accordance with this section.
(f) Rule of Construction.--Nothing in this section shall be
construed as altering the substance or timing of any regulatory
document obligation under the securities laws or regulations of a self-
regulatory organization.
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