[House Report 119-136]
[From the U.S. Government Publishing Office]
119th Congress } { Report
HOUSE OF REPRESENTATIVES
1st Session } { 119-136
======================================================================
IMPROVING DISCLOSURE FOR INVESTORS ACT OF 2025
--------------
June 4, 2025.--Committed to the Committee of the Whole House on the
State of the Union and ordered to be printed
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Mr. Hill of Arkansas, from the Committee on Financial Services,
submitted the following
R E P O R T
together with
MINORITY VIEWS
[To accompany H.R. 2441]
The Committee on Financial Services, to whom was referred
the bill (H.R. 2441) to provide for the electronic delivery of
certain regulatory document required under the securities laws,
having considered the same, reports favorably thereon with an
amendment and recommends that the bill as amended do pass.
CONTENTS
Page
Purpose and Summary.............................................. 4
Background and Need for Legislation.............................. 4
Committee Consideration.......................................... 4
Related Hearings................................................. 5
Committee Votes.................................................. 6
Committee Oversight Findings..................................... 8
Performance Goals and Objectives................................. 8
Committee Cost Estimate.......................................... 8
New Budget Authority and CBO Cost Estimate....................... 8
Unfunded Mandates Statement...................................... 8
Earmark Statement................................................ 8
Federal Advisory Committee Act Statement......................... 8
Applicability to the Legislative Branch.......................... 9
Duplication of Federal Programs.................................. 9
Section-by-Section Analysis of the Legislation................... 9
Changes in Existing Law Made by the Bill, as Reported............ 10
Minority Views or Supplemental Views, Additional Views, or
Dissenting Views............................................... 12
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Improving Disclosure for Investors Act
of 2025''.
SEC. 2. ELECTRONIC DELIVERY.
(a) Promulgation of Rules.--Not later than 180 days after the date of
the enactment of this section, the Securities and Exchange Commission
shall propose and, not later than 1 year after the date of the
enactment of this section, the Commission shall finalize rules,
regulations, amendments, or interpretations, as appropriate, to allow a
covered entity to satisfy the entity's obligation to deliver regulatory
documents required under the securities laws to investors using
electronic delivery.
(b) Required Provisions.--Rules, regulations, amendments, or
interpretations the Commission promulgates pursuant to subsection (a)
shall:
(1) With respect to investors that do not receive all
regulatory documents by electronic delivery, provide for--
(A) delivery of an initial communication in paper
form regarding electronic delivery;
(B) a transition period not to exceed 180 days until
such regulatory documents are delivered to such
investors by electronic delivery; and
(C) during a period not to exceed 2 years following
the transition period set forth in subparagraph (B),
delivery of an annual notice in paper form solely
reminding such investors of the ability to opt out of
electronic delivery at any time and receive paper
versions of regulatory documents.
(2) Set forth requirements for the content of the initial
communication described in paragraph (1)(A).
(3) Set forth requirements for the timing of delivery of a
notice of website availability of regulatory documents and the
content of the appropriate notice described in subsection
(g)(3)(B).
(4) Provide a mechanism for investors to opt out of
electronic delivery at any time and receive paper versions of
regulatory documents.
(5) Require measures reasonably designed to identify and
remediate failed electronic deliveries of regulatory documents.
(6) Set forth minimum requirements regarding readability and
retainability for regulatory documents that are delivered
electronically.
(7) For covered entities other than brokers, dealers,
investment advisers registered with the Commission, and
investment companies, require measures reasonably designed to
ensure the confidentiality of personal information in
regulatory documents that are delivered to investors
electronically.
(c) Exemption From Certain Requirements.--Section 101(c) of the
Electronic Signatures in Global and National Commerce Act (15 U.S.C.
7001(c)) shall not apply with respect to a regulatory document
delivered in accordance with this section.
(d) Rule of Construction.--Nothing in this section shall be construed
as altering the substance or timing of any regulatory document
obligation under the securities laws or regulations of a self-
regulatory organization.
(e) Treatment of Revisions Not Completed in a Timely Manner.--If the
Commission fails to finalize the rules, regulations, amendments, or
interpretations required under subsection (a) before the date specified
in such subsection--
(1) a covered entity may deliver regulatory documents using
electronic delivery in accordance with subsections (b) and (c);
and
(2) such electronic delivery shall be deemed to satisfy the
obligation of the covered entity to deliver regulatory
documents required under the securities laws.
(f) Other Required Actions.--
(1) Review of rules.--The Commission shall--
(A) within 180 days of the date of enactment of this
Act, conduct a review of the rules and regulations of
the Commission to determine whether any such rules or
regulations require delivery of written documents to
investors; and
(B) within 1 year of the date of enactment of this
Act, promulgate amendments to such rules or regulations
to provide that any requirement to deliver a regulatory
document ``in writing'' may be satisfied by electronic
delivery.
(2) Actions by self-regulatory organizations.--Each self-
regulatory organization shall adopt rules and regulations, or
amend the rules and regulations of the self-regulatory
organization, consistent with this Act and consistent with
rules, regulations, amendments, or interpretations finalized by
the Commission pursuant to subsection (a).
(3) Rule of application.--This subsection shall not apply to
a rule or regulation issued pursuant to a Federal statute if
that Federal statute specifically requires delivery of paper
documents to investors.
(g) Definitions.--In this section:
(1) Commission.--The term ``Commission'' means the Securities
and Exchange Commission.
(2) Covered entity.--The term ``covered entity'' means--
(A) an investment company (as defined in section
3(a)(1) of the Investment Company Act of 1940 (15
U.S.C. 80a-3(a)(1))) that is registered under such Act;
(B) a business development company (as defined in
section 2(a) of the Investment Company Act of 1940 (15
U.S.C. 80a-2(a))) that has elected to be regulated as
such under such Act;
(C) a registered broker or dealer (as such terms are
defined, respectively, in paragraphs (4) and (5) of
section 3(a) of the Securities Exchange Act of 1934 (15
U.S.C. 78c(a)));
(D) a registered municipal securities dealer (as
defined in section 3(a)(30) of the Securities Exchange
Act of 1934 (15 U.S.C. 78c(a)(30)));
(E) a registered government securities broker or
government securities dealer (as such terms are
defined, respectively, in paragraphs (43) and (44) of
section 3(a) of the Securities Exchange Act of 1934 (15
U.S.C. 78c(a)));
(F) a registered investment adviser (as defined in
section 202(a)(11) of the Investment Advisers Act of
1940 (15 U.S.C. 80b-1(a)(11)));
(G) a registered transfer agent (as defined in
section 3(a)(25) of the Securities Exchange Act of 1934
(15 U.S.C. 78c(a)(25))); or
(H) a registered funding portal (as defined in the
second paragraph (80) of section 3(a) of the Securities
Exchange Act of 1934 (15 U.S.C. 78c(a))).
(3) Electronic delivery.--The term ``electronic delivery'',
with respect to regulatory documents, includes--
(A) the direct delivery of such regulatory document
to an electronic address of an investor;
(B) the posting of such regulatory document to a
website, and direct delivery of an appropriate notice
of the availability of the regulatory document to an
electronic address of the investor; or
(C) any other electronic method reasonably designed
to ensure receipt of such regulatory document by the
investor.
(4) Regulatory documents.--The term ``regulatory documents''
includes--
(A) prospectuses meeting the requirements of section
10(a) of the Securities Act of 1933 (15 U.S.C. 77j(a));
(B) summary prospectuses meeting the requirements
of--
(i) section 230.498 of title 17, Code of
Federal Regulations; or
(ii) section 230.498A of title 17, Code of
Federal Regulations;
(C) statements of additional information, as
described under section 270.30e-3(h)(2) of title 17,
Code of Federal Regulations;
(D) annual and semi-annual reports to investors
meeting the requirements of section 30(e) of the
Investment Company Act of 1940 (15 U.S.C. 80a-29(e));
(E) notices meeting the requirements under section
270.19a-1 of title 17, Code of Federal Regulations;
(F) confirmations and account statements meeting the
requirements under section 240.10b of title 17, Code of
Federal Regulations;
(G) proxy statements meeting the requirements under
section 240.14a-3 of title 17, Code of Federal
Regulations;
(H) privacy notices meeting the requirements of
Regulation S-P under subpart A of part 248 of title 17,
Code of Federal Regulations;
(I) affiliate marketing notices meeting the
requirements of Regulation S-AM under subpart B of part
248 of title 17, Code of Federal Regulations; and
(J) all other regulatory documents required to be
delivered by covered entities to investors under the
securities laws and the rules and regulations of the
Commission and the self-regulatory organizations.
(5) Securities laws.--The term ``securities laws'' has the
meaning given the term in section 3(a) of the Securities
Exchange Act of 1934 (15 U.S.C. 78c(a)).
(6) Self-regulatory organization.--The term ``self-regulatory
organization'' means--
(A) a self-regulatory organization, as defined in
section 3(a)(26) of the Securities Exchange Act of 1934
(15 U.S.C. 78c(a)(26)); and
(B) the Municipal Securities Rulemaking Board.
(7) Website.--The term ``website'' means an internet website
or other digital, internet, or electronic-based information
repository, including a mobile application.
PURPOSE AND SUMMARY
H.R. 2441, the Improving Disclosure for Investors Act of
2025, was introduced on March 27, 2025, by Representative Bill
Huizenga (MI-04). H.R. 2441 would direct the Securities and
Exchange Commission (SEC) to promulgate rules with respect to
the electronic delivery of certain required disclosures to
investors. Under the bill, such rules would allow registered
investment companies (i.e., mutual funds, closed end funds, and
exchange-traded funds), business development companies (BDCs),
registered broker-dealers, registered advisers, and other SEC-
regulated entities to meet their obligations under U.S.
securities laws to deliver regulatory documents to investors
electronically.
BACKGROUND AND NEED FOR LEGISLATION
A 2022 survey found that 85 percent of individual investors
would be comfortable with e-delivery as the default for
investor communications if they have the choice to opt-in to
paper delivery.\1\ H.R. 2441 preserves the ability for
investors who prefer to receive paper notices and disclosures
to do so by requiring the SEC to incorporate investor
protections into its rules, such as providing a means for
investors to opt out of electronic delivery at any time.
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\1\SIFMA, Most Investors Want Electronic, Not Paper, Delivery of
Investor Documents (Summer 2022), https://www.sifma.org/wp-content/
uploads/2022/07/SIFMA-Survey-Results-for-SEC-July-2022.pdf.
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Aside from reducing the environmental impact of tons of
disposed paper each year, the benefits of making electronic
delivery the default method for the entities listed above
include facilitating positive investor engagement, as investors
can more easily search for and find information most relevant
to them. Additionally, electronic delivery enhances the
effectiveness of investor communications for individuals with
disabilities or those for whom English is not their primary
language. At a time when so many households, even senior
households, have transitioned to online management of their
finances, H.R. 2441 is a significant and critical step forward
in modernizing how investor disclosures are delivered while
preserving choice.
COMMITTEE CONSIDERATION
117TH CONGRESS
On December 15, 2022, Representative Bill Huizenga (R-MI)
introduced H.R. 9570, the Improving Disclosure for Investors
Act of 2022, with Representative Jake Auchincloss (D-MA) as
original cosponsor. This bill is an earlier iteration of H.R.
2441. The bill was referred solely to the Committee on
Financial Services.
118TH CONGRESS
On March 27, 2023, Representative Bill Huizenga (R-MI)
introduced H.R. 1807, the Improving Disclosure for Investors
Act of 2023, with Representatives Auchincloss, Bryan Steil (R-
WI), and Wiley Nickel (D-NC) as original cosponsors.
Representative John Rutherford (R-FL) was added subsequently as
a cosponsor. This bill is an earlier iteration of H.R. 2441.
The bill was referred solely to the Committee on Financial
Services.
On March 9, 2023, the Subcommittee on Capital Markets of
the Committee on Financial Services held a hearing entitled
``U.S. Public Markets Built for the 21st Century: Exploring
Reforms to Make Our Public Markets Attractive for Small and
Emerging Companies Raising Capital'' to examine matters
relating to H.R. 1807. On April 26, 2023, the Committee on
Financial Services ordered H.R. 1807 to be reported favorably
to the House of Representatives by voice vote. In addition,
Senator Thom Tillis (R-NC) introduced a companion bill, S.
3815, with Senator John Hickenlooper (D-CO) as an original
cosponsor. On March 7, 2024, H.R. 1807 was added to H.R. 2799,
the Expanding Access to Capital Act of 2023. On March 8, 2024,
H.R. 2799 was passed by the House by a recorded vote of 212
yeas and 205 nays. The bill was received in the Senate and
referred to the Committee on Banking, Housing, and Urban
Affairs.
119TH CONGRESS
On March 27, 2025, Representative Huizenga introduced H.R.
2441, the Improving Disclosure for Investors Act of 2025, with
Representatives Brad Sherman (D-CA), Steil, and Auchincloss as
original cosponsors. Representatives Brittany Pettersen (D-CO)
and Ann Wagner (R-MO) were added subsequently as cosponsors.
The bill was referred solely to the Committee on Financial
Services. The bill was attached to the February 26, 2025,
hearing titled ``The Future of American Capital: Strengthening
Public and Private Markets by Increasing Investor Access and
Facilitating Capital Formation,'' and the March 25, 2025,
hearing titled, ``Beyond Silicon Valley: Expanding Access to
Capital Across America.''
On May 20, 2025, the Committee met in open session to
consider, among others, H.R. 2441. The Committee ordered H.R.
2441, as amended, to be favorably reported to the House of
Representatives.
RELATED HEARINGS
Pursuant to clause 3(c)(6) of rule XIII of the Rules of the
House of Representatives, the following hearings were used to
develop H.R. 2441:
The Capital Markets Subcommittee of the Committee on
Financial Services held a February 26, 2025, hearing titled
``The Future of American Capital: Strengthening Public and
Private Markets by Increasing Investor Access and Facilitating
Capital Formation'' and the Full Committee held a March 25,
2025, hearing titled, ``Beyond Silicon Valley: Expanding Access
to Capital Across America.'' A discussion draft version of the
bill was attached to both hearings. The following witnesses
testified at the February 26, 2025, hearing: Mr. Andrew
Barnell, CEO and Co-Founder, Geneoscopy; Mr. McKeever Conwell,
Founder and Managing Partner, RareBreed Ventures; Ms. Rebecca
Kacaba, CEO and Co-Founder, DealMaker; Ms. Anna Pinedo,
Partner, Mayer Brown; and Ms. Alexandra Thornton, Senior
Director, Financial Regulation, Center for American Progress.
The following witnesses testified at the March 25, 2025,
hearing: Mr. Steve Case, Chairman and CEO, Revolution LLC; Mr.
Bill Newell, Senior Business Advisor & Former CEO, Sutro
Biopharma; Ms. Candice Matthews Brackeen, General Partner,
Lightship Capital; Mr. Joel Trotter, Partner, Latham & Watkins
LLP; and Ms. Amanda Senn, Director of the Alabama Securities
Commission.
COMMITTEE VOTES
Clause 3(b) of rule XIII of the Rules of the House of
Representatives requires the Committee Report to include for
each record vote on a motion to report the measure or matter
and on any amendments offered to the measure or matter the
total number of votes for and against and the names of the
Members voting for and against.
On May 20, 2025, the Committee ordered H.R. 2441, as
amended, to be reported favorably to the House by a recorded
vote of 39 yeas and 11 nays, a quorum being present. (Record
Vote No. FC-116).\2\
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\2\On May 28, 2024, Representative Joyce Beatty notified the
Committee in writing that her yea vote on the motion to report H.R.
2441, as amended, was in error. She intended to vote nay. See letter in
Committee Letters section of this report.
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The Committee considered the following amendments to H.R.
2441:
Representative Bill Huizenga (R-MI) offered
an amendment in the nature of a substitute, which made
minor edits and technical changes. This amendment was
adopted by a voice vote.
Representative Sylvia Garcia (D-TX) offered
an amendment (No. 3), designated AMEND_HR2441_2. This
amendment would add a new section that requires covered
entities to continue honoring any investor election--
made within the one-year period prior to enactment--to
receive regulatory documents in either paper or
electronic form. The entity must continue using the
elected delivery method until the investor opts for a
different format. This amendment was withdrawn.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
COMMITTEE OVERSIGHT FINDINGS
Pursuant to clause 3(c) of rule XIII of the Rules of the
House of Representatives, the findings and recommendations of
the Committee, based on oversight activities under clause
2(b)(1) of rule X of the Rules of the House of Representatives,
are incorporated in the descriptive portions of this report.
PERFORMANCE GOALS AND OBJECTIVES
Pursuant to clause 3(c)(4) of rule XIII of the Rules of the
House of Representatives, the goal of H.R. 2441 is to direct
the Securities and Exchange Commission to modernize how
investor disclosures are delivered while preserving investors'
choice of delivery method.
COMMITTEE COST ESTIMATE
Clause 3(d)(1) of rule XIII of the Rules of the House of
Representatives requires an estimate and a comparison of the
costs that would be incurred in carrying out H.R. 2441. The
Committee has requested but not received a cost estimate from
the Director of the Congressional Budget Office. However,
pursuant to clause 3(d)(1) of House rule XIII, the Committee
will adopt as its own the cost estimate by the Director of the
Congressional Budget Office once it has been prepared.
NEW BUDGET AUTHORITY AND CBO COST ESTIMATE
With respect to the requirements of clause 3(c)(2) of rule
XIII of the Rules of the House of Representatives and section
308(a) of the Congressional Budget Act of 1974 and with respect
to requirements of clause 3(c)(3) of rule XIII of the Rules of
the House of Representatives and section 402 of the
Congressional Budget Act of 1974, a cost estimate was not made
available to the Committee in time for the filing of this
report. The Chairman of the Committee shall cause such estimate
to be printed in the Congressional Record upon its receipt by
the Committee.
UNFUNDED MANDATES STATEMENT
The Committee has requested but not received from the
Director of the Congressional Budget Office an estimate of the
Federal mandates pursuant to section 423 of the Unfunded
Mandates Reform Act. The Committee will adopt the estimate once
it has been prepared by the Director.
EARMARK STATEMENT
With respect to clause 9 of rule XXI of the Rules of the
House of Representatives, the Committee has carefully reviewed
the provisions of the resolution and states that the provisions
of the bill do not contain any congressional earmarks, limited
tax benefits, or limited tariff benefits within the meaning of
the rule.
FEDERAL ADVISORY COMMITTEE ACT STATEMENT
No advisory committees within the meaning of section 5(b)
of the Federal Advisory Committee Act were created by this
legislation.
APPLICABILITY TO THE LEGISLATIVE BRANCH
The Committee finds that the legislation does not relate to
the terms and conditions of employment or access to public
services or accommodations within the meaning of section
102(b)(3) of the Congressional Accountability Act.
DUPLICATION OF FEDERAL PROGRAMS
Pursuant to clause 3(c)(5) of rule XIII of the Rules of the
House of Representatives, the Committee states that no
provision of the bill establishes or reauthorizes a program of
the Federal Government known to be duplicative of another
Federal program, including any program that was included in a
report to Congress pursuant to section 21 of the Public Law
111-139 or the most recent Catalog of Federal Domestic
Assistance.
SECTION-BY-SECTION ANALYSIS OF THE LEGISLATION
Section 1. Short title
This section cites H.R. 1807 as the ``Improving Disclosure
for Investors Act of 2025''.
Section 2. Electronic delivery
This section directs the SEC to promulgate rules to allow a
covered entity to meet its obligations to deliver regulatory
documents required under the securities laws to investors using
electronic delivery. Within this section, a ``covered entity''
is defined as a registered investment company, a business
development company, a registered broker or dealer, a
registered municipal securities dealer, a registered government
securities broker or government securities dealer, a registered
investment adviser, a registered transfer agent, or a
registered funding portal.
Section 2 also states that the rules will: (1) for any
investors who do not receive all regulatory documents
electronically, provide for delivery of an initial
communication regarding electronic delivery in paper, include a
transition period not longer than 180 days, and during a period
not to exceed two years, provide investors with an annual
notice in paper reminding investors that they can opt out of
electronic delivery at any time; (2) set forth the requirements
for the initial communication to investors; (3) set forth the
requirements for providing investors with notice that
regulatory documents are available on a website and the
contents of the notice; (4) provide a mechanism for investors
to opt out of electronic delivery and to receive paper versions
of regulatory documents; (5) include measures to identify and
remediate failed electronic deliveries; (6) set forth
requirements regarding readability and retainability of
regulatory documents delivered electronically; and (7) require
measures designed to ensure the confidentiality of personal
information. Moreover, this section specifies exemptions, rules
of construction, and notes that if rules are not completed in a
timely manner, a covered entity may deliver regulatory
documents electronically to satisfy its obligations under the
securities laws.
This section also directs the SEC to review the rules to
determine whether any rules require delivery of written
documents to investors and to promulgate amendments to the
rules to provide that delivery of regulatory documents in
writing may be satisfied electronically. Finally, this section
directs self-regulatory organizations to adopt rules or amend
their rules consistent with the SEC's final rules on electronic
delivery.
CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED
H.R. 2441 does not repeal or amend any section of a
statute. Therefore, the Office of Legislative Counsel did not
prepare the report required under clause 3(e) of rule XIII of
the House of Representatives.
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
MINORITY VIEWS
This bill directs the SEC to promulgate rules to allow
broker-dealers, mutual funds, retirement plans, etc., to
satisfy their disclosure and statements delivery obligations
through electronic means. Importantly, the bill includes a
clause that self-effectuates the bill, should the SEC not
complete the rulemaking in time. This bill ignores the reality
that many investors, particularly seniors, do not have access
to or the ability to review electronic documents, or simply do
not prefer electronic delivery of financial documents. This
bill requires investors to proactively opt-in to receive paper
documents, which would effectively prevent individuals who do
not have easy access to the internet from viewing important
financial documents about the securities they invest in.
Furthermore, the bill--concerningly--would automatically enroll
investors in e-delivery even if they affirmatively opted to
receive paper documents.
Several major investor advocate groups strongly oppose this
bill, including AARP, NASAA, Consumer Federation of America,
Americans for Financial Reform, and Public Citizen. AARP in
particular is critical of this bill in its current form,
writing:
``Full and meaningful disclosure is critical to
individual financial planning. Millions of Americans,
many who are 50 and older or living in rural areas, do
not have regular broadband internet access or do not
routinely use computers at home. This means they would
miss out on critical account information if the default
delivery were electronic [. . .] If enacted as
currently drafted, this legislation would amount to no
disclosure at all for many consumers.''
The SEC's Investor Advisory Committee has previously
recommended against the policy contained within this bill at a
prior meeting. Additionally, in a letter to the Committee, the
Consumer Federation of America warns that:
``Importantly, this bill would unwind the paper
delivery of pro-investor disclosure improvements that
the SEC finalized recently that would make shareholder
reports more concise and visually appealing.''\1\
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\1\Consumer Federation of America, Statement for the Record of
Micah Hauptman, Director of Investor Protection (Mar. 9, 2023).
Ranking Member Waters raised serious concerns with a prior
version of this bill in the 118th Congress, but consented to a
voice vote on the condition that it would undergo changes
needed to mitigate concerns raised by consumer advocates. The
current bill does not address the Ranking Member's concerns.
For these reasons, we oppose H.R. 2441.
Sincerely,
Maxine Waters,
Ranking Member.
Nydia M. Velazquez,
Stephen F. Lynch,
Al Green,
Joyce Beatty,
Rashida Tlaib,
Sylvia R. Garcia,
Nikema Williams,
Members of Congress.
[all]