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SEC Allows Funds to Stop Mailing Shareholder Reports

The SEC adopted a new rule that allows mutual funds and ETFs to dispense with having to deliver paper shareholder reports to investors.  New rule 30e-3 allows funds to post shareholder reports to a website so long as the funds provide paper notice of the reports’ availability and shareholders have the right to receive a hard copy upon request.  The rule does not go into effect until 2021.  The SEC also seeks comment about how to improve fund disclosure as well as the overall framework for processing fees charged by intermediaries for forwarding shareholder reports.

OUR TAKE: If you didn’t work in the fund industry, you might think it inconceivable that fund firms have been required to mail hard copies of voluminous shareholder reports.  Finally, the SEC has stood down the paper lobby to adopt this long overdue modernization.  Our only question is why wait until 2021?

Link to SEC Press Release