SEC signals modernization of off-channel communications & e-delivery rules

The U.S. Securities and Exchange Commission (SEC) is reviewing its approach to off-channel communications compliance and electronic delivery (e-delivery) requirements, signaling potential updates to potentially outdated recordkeeping and disclosure frameworks. Industry stakeholders have urged the agency to modernize longstanding books-and-records and communications retention requirements and to expand the use of electronic delivery for investor disclosures and notices. 

During a recent oversight hearing before the House Financial Services Committee, Chairman Paul Atkins said the agency is examining recordkeeping expectations for digital communications and ways to increase flexibility around electronic delivery of shareholder and investor materials. He also emphasized the need for more uniform communication retention standards across market participants, noting that today’s patchwork requirements can create confusion and operational challenges.

Separately, the Financial Industry Regulatory Authority (FINRA) announced that it plans to seek SEC approval for an updated rule that would allow broker-dealers to make electronic delivery the default method for investor disclosures and other communications.

Together, these developments reflect a broader effort to better align regulatory requirements with how firms and investors communicate today and to ease compliance burdens tied to informal or off-platform messaging channels that have been the focus of recent enforcement actions.

Additional guidance and potential rulemaking are expected as the SEC continues its review.

Additional authors: Carolyn Rietig