Nationwide e-delivery of investor documents took a stride forward today with the introduction of bipartisan legislation in the Senate that directs the Securities and Exchange Commission to write a rule that would allow financial firms to make digital delivery of documents the default method of delivery.

The Senate bill, “Improving Disclosure for Investors Act of 2024, was introduced by Sens. John Hickenlooper, a Democrat from Colorado and Tom Tillis, a Republican from North Carolina.

The bill would allow firms to go paperless by making electronic delivery their default delivery method for required investor communications. It tracks companion legislation that the House Financial Services Committee passed last spring.

Currently, the SEC allows electronic delivery of certain documents, subject to mandates that include requiring firms to either obtain notice of actual delivery or informed consent from the investor, the lawmakers said.

The legislation directs the SEC to update its current rules for the first time in 20 years and requires the agency to establish means for investors to opt out of electronic delivery at any time to receive paper documents, the senators added.

“Today’s economy runs in the digital age, and we need to catch up,” Hickenlooper said. “Cutting red tape is as simple as going paperless.”

Large broker-dealers and their trade groups immediately signaled their support for the bill.

Charles Schwab said in a statement that “default e-delivery is long-overdue, as a large majority of investors prefer the speed and convenience of receiving documents electronically.” Paperless delivery also allows the firm “to deliver our products at lower cost, avoids waste, and is environmentally friendly,” Schwab added.

Investment Company Institute President and CEO Eric Pan said in a statement that the legislation “will allow millions of investors to receive information electronically, the overwhelming preference for most Americans.” The fund industry’s trade association urged Congress to pass the bill as soon as possible.

Fidelity said in a statement, “In the 21st century American investors deserve a more engaging, secure, and timely standard to receive information in line with digital-first policies at the Department of Labor, Thrift Savings Plan, Social Security Administration, and Internal Revenue Service."

It is also important that the legislation “preserves the right of retail investors to receive paper, and provides robust consumer protections through any transition to eDelivery,” the firm said.

SIFMA,  a trade association that represents broker-dealers, investment banks and asset managers, said “the time is overdue to make electronic delivery the default means for delivering investor communications, while giving investors the power to choose paper delivery if preferred.”

Recent Sifma survey results found that 81% of retail investors, regardless of income or age, “want e-delivery for its environmental benefits, speed, and convenience,” the trade group said.