ASA Urges SEC to Finalize E-Delivery Rule

WASHINGTON – The American Securities Association (ASA) today submitted a comment letter to the Securities and Exchange Commission (SEC) strongly supporting proposed Regulation E-Delivery, which would make electronic delivery the default method of communicating with investors, while urging the Commission to adopt a final rule without the provision requiring non-objecting beneficial owner (NOBO) lists to include electronic addresses.

“Making e-delivery the default is a major win for American investors, retirement savers, and working families, and ASA applauds Chairman Atkins and the Commission for advancing it,” said ASA President and CEO Chris Iacovella. “Importantly, we urge the SEC to remember that investors gave their broker-dealers an email address and a mobile number so the firm could service their accounts, not so that information could be forwarded to third parties who have no obligation to protect them. The SEC can adopt this rule without any changes to the NOBO list and that would avoid needlessly confusing investors and putting their personal information at risk.”

ASA's letter details why furnishing client electronic addresses to third parties raises concerns that mailing addresses do not. Existing client consents generally do not extend to this type of disclosure. Mobile numbers in particular function as an authentication factor, and a downstream breach would compromise not just the number but the security control it supports. ASA also noted that FINRA's own rule change achieves the digital default without transferring any client's electronic address to a third party.

ASA's letter additionally recommends shortening the 180-day investor notice period to 60 days, replacing the proposed three-business-day paper fulfillment deadline with a commercially reasonable standard, pursuing a uniform e-delivery standard across self-regulatory organizations, and clarifying how e-delivery interacts with state unclaimed property laws following an account holder's death.

To read ASA’s full letter to the SEC, click here.

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The American Securities Association (ASA) represents the retail and institutional capital markets interests of regional financial services firms who provide Main Street businesses with access to capital and advise hardworking Americans how to create and preserve wealth. ASA’s mission is to promote trust and confidence among investors, facilitate capital formation, and support efficient and competitively balanced capital markets. This mission advances financial independence, stimulates job creation, and increases prosperity. The ASA has a geographically diverse membership of almost one hundred members that spans the Heartland, Southwest, Southeast, Atlantic, and Pacific Northwest regions of the United States.