In a move that reflects the evolving preferences of retail investors and the growing reliance on digital technology, a bipartisan group of lawmakers introduced the Improving Disclosure for Investors Act of 2025. The proposed legislation directs the Securities and Exchange Commission (SEC) to modernize the delivery of regulatory documents by making electronic delivery the default method for investor communications, while preserving the option for paper delivery upon request.
Legislative Background
The 2025 legislation builds on earlier efforts from the 118th Congress, including the Improving Disclosure for Investors Act of 2023 (H.R. 1807) and its Senate counterpart. Those bills similarly directed the SEC to allow default electronic delivery of regulatory materials while preserving investor choice and requiring transition safeguards. Although H.R. 1807 advanced through the House Financial Services Committee, it did not progress to final enactment. The reintroduction of the bill in 2025 appears to reflect sustained bipartisan support and renewed legislative momentum to modernize disclosure practices.
Purpose and Scope
SEC rules requiring paper delivery of regulatory documents were originally established through a series of Commission releases issued in the mid-1990s. These rules govern the delivery of key investor communications, including prospectuses, annual reports, proxy materials, and other mandated disclosures. Although the SEC took steps toward modernization with the adoption of Rule 14a‑16 in 2007, permitting “notice and access” for proxy materials, a comprehensive shift to electronic delivery as the default has not occurred. Under current law, unless a recipient affirmatively consents to electronic delivery in advance, financial firms must continue to provide paper documents.
To address this regulatory gap, the Improving Disclosure for Investors Act of 2025 seeks to streamline and modernize how investors receive critical regulatory information. By shifting the default delivery method from paper to electronic, while preserving the option to receive paper upon request, the legislation responds to mounting evidence that most investors favor the speed, accessibility, and environmental benefits associated with electronic delivery. If enacted, the Improving Disclosure for Investors Act of 2025 would apply broadly across the financial services industry, including broker-dealers, investment advisers, mutual funds, municipal and government securities dealers, transfer agents, and funding portals.
Key Provisions
The Improving Disclosure for Investors Act of 2025 outlines a series of structured reforms to modernize how regulatory information is delivered to investors.
- Rulemaking Deadline. Under the proposed legislation, the SEC would be required to take swift regulatory action, proposing rules within 180 days and finalizing them within one year of the bill’s enactment.
- Default to E-Delivery. Central to the legislation is a provision allowing financial firms to default investors to electronic delivery of regulatory documents, such as account statements and prospectuses. This shift to e-delivery would be permitted only if certain investor protections are maintained, including the ability for investors to opt out and continue receiving paper communications.
- Transition Period and Notifications. To ensure a smooth transition, the Improving Disclosure for Investors Act of 2025 mandates that investors not currently using electronic delivery must first receive a paper notice informing them of the pending change. A 180-day transition period would then begin, after which firms could switch to electronic delivery. For up to two years following the transition, firms would be required to send annual paper reminders notifying investors of their continued right to revert to paper delivery.
- Investor Protections. Investor safeguards are a key element of the bill. Electronic delivery systems must guarantee that disclosures are readable, retainable, and secure. Firms must actively monitor for delivery failures and take prompt corrective action. In addition, they must offer investors a clear and easily accessible method to resume paper delivery if preferred.
- Regulatory Coordination. Finally, the proposed bill calls for regulatory alignment. The SEC would be required to revise existing rules that mandate delivery “in writing” to reflect the new electronic default standard. Self-regulatory organizations, including FINRA and the Municipal Securities Rulemaking Board (MSRB), would also be expected to update their rules to remain consistent with the SEC’s revised framework.
Assessment of Passage Probability
Bipartisan backing and strong support from key industry stakeholders, including SIFMA, the Investment Company Institute, Fidelity, Charles Schwab, and various environmental groups, significantly strengthen the bill’s prospects. However, while approval by the House Financial Services Committee is an encouraging step, it does not ensure passage by the full House, particularly given the competing legislative priorities this session. Furthermore, progress in the Senate remains uncertain, as the bill has yet to advance and must compete for attention within an already crowded legislative agenda.
Conclusion
The Improving Disclosure for Investors Act of 2025 represents a meaningful step toward the modernization of securities regulation by aligning disclosure methods with investor preferences and technological capabilities. If adopted, it will mark a pivotal step in how regulatory communications are delivered across the U.S. financial marketplace. Although the bill reflects continued bipartisan support and renewed legislative momentum, its ultimate fate remains uncertain, as it must still navigate the same legislative hurdles that stalled its predecessor legislation.