Bill Overview
Title: Improving Disclosure for Investors Act of 2022
Description: This bill requires the Securities and Exchange Commission (SEC) to propose and finalize rules to allow entities to deliver regulatory documents to investors electronically. The SEC must establish a mechanism for investors to opt out of electronic delivery and receive paper documents instead. If the SEC does not finalize rules within one year after enactment, the bill allows for electronic delivery of these documents.
Sponsors: Rep. Huizenga, Bill [R-MI-2]
Target Audience
Population: Investors globally
Estimated Size: 56000000
- The bill is aimed at improving the way investors receive regulatory documents by allowing electronic delivery.
- Entities delivering these documents can be issuers of publicly traded securities, mutual funds, and other financial products.
- Investors, the target audience for this bill, include individuals and institutions involved in financial markets.
- There are approximately 56 million (as of 2020) retail investors in the U.S., representing a significant portion of the adult population with some level of stock market participation globally.
Reasoning
- The policy targets a large population of U.S. investors, estimated at 56 million.
- The budget indicates a significant investment in electronic infrastructure, but is limited relative to the target population.
- Not all participants will find electronic document delivery beneficial, particularly older or less tech-savvy investors.
- There will be a divide between investors who prefer electronic vs. paper documents.
- Cost savings on paper and distribution may result in benefits that are passed to investors.
Simulated Interviews
Software Engineer (California)
Age: 30 | Gender: male
Wellbeing Before Policy: 8
Duration of Impact: 20.0 years
Commonness: 15/20
Statement of Opinion:
- I prefer managing my investments online.
- Electronic delivery will help me stay updated faster.
- I appreciate the environmental benefits of reducing paper usage.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 9 | 8 |
| Year 2 | 9 | 8 |
| Year 3 | 9 | 8 |
| Year 5 | 9 | 8 |
| Year 10 | 9 | 8 |
| Year 20 | 9 | 8 |
Retired (Florida)
Age: 62 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 10/20
Statement of Opinion:
- I am used to receiving paper documents.
- Switching to electronic might be challenging for me.
- I hope there's good support for opting out.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 6 | 6 |
| Year 10 | 5 | 6 |
| Year 20 | 5 | 6 |
Financial Advisor (New York)
Age: 45 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 10.0 years
Commonness: 8/20
Statement of Opinion:
- This change can streamline communication with clients.
- Electronic delivery often means quicker updates.
- I might need to educate some clients on the new process.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 8 | 7 |
| Year 10 | 8 | 7 |
| Year 20 | 7 | 7 |
Small Business Owner (Texas)
Age: 50 | Gender: male
Wellbeing Before Policy: 7
Duration of Impact: 20.0 years
Commonness: 12/20
Statement of Opinion:
- Electronic delivery is how I prefer to manage information.
- It seems more secure than having papers mailed.
- I'm in favor of technological advancements.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 7 |
| Year 2 | 8 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 8 | 7 |
| Year 10 | 8 | 7 |
| Year 20 | 8 | 7 |
Graduate Student (Oregon)
Age: 25 | Gender: other
Wellbeing Before Policy: 8
Duration of Impact: 20.0 years
Commonness: 18/20
Statement of Opinion:
- I use my phone for everything, including investments.
- Paper documents feel outdated to me.
- This policy makes sense for future generations.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 8 | 8 |
| Year 2 | 8 | 8 |
| Year 3 | 8 | 8 |
| Year 5 | 8 | 8 |
| Year 10 | 8 | 8 |
| Year 20 | 8 | 8 |
Teacher (Illinois)
Age: 34 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 14/20
Statement of Opinion:
- I follow my advisor's lead on these matters.
- Electronic delivery might not change things much for me directly.
- I'm open to receiving documents in any format.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 6 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 6 | 6 |
Retired (Ohio)
Age: 70 | Gender: male
Wellbeing Before Policy: 5
Duration of Impact: 10.0 years
Commonness: 7/20
Statement of Opinion:
- I prefer paper documents for my records.
- I'm concerned about cybersecurity risks.
- Opting out must be straightforward.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 5 | 5 |
| Year 2 | 5 | 5 |
| Year 3 | 5 | 5 |
| Year 5 | 5 | 5 |
| Year 10 | 5 | 5 |
| Year 20 | 5 | 5 |
Freelance Writer (Washington)
Age: 40 | Gender: female
Wellbeing Before Policy: 7
Duration of Impact: 20.0 years
Commonness: 11/20
Statement of Opinion:
- Electronic communication is timely and efficient.
- I'm concerned about missing important updates via email spam.
- I'd prefer a hybrid option.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 7 | 7 |
| Year 2 | 7 | 7 |
| Year 3 | 8 | 7 |
| Year 5 | 8 | 7 |
| Year 10 | 8 | 7 |
| Year 20 | 7 | 7 |
Data Analyst (Nevada)
Age: 28 | Gender: male
Wellbeing Before Policy: 9
Duration of Impact: 20.0 years
Commonness: 16/20
Statement of Opinion:
- Everything is better online and real-time.
- Electronic delivery aligns with how I handle investments.
- I don't see why anyone would opt for paper.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 9 | 9 |
| Year 2 | 9 | 9 |
| Year 3 | 9 | 9 |
| Year 5 | 9 | 9 |
| Year 10 | 9 | 9 |
| Year 20 | 9 | 9 |
Nurse (Georgia)
Age: 55 | Gender: female
Wellbeing Before Policy: 6
Duration of Impact: 5.0 years
Commonness: 13/20
Statement of Opinion:
- I'd like to keep my financial life simple.
- Having an option between electronic and paper is good.
- This change is minor for me personally.
Wellbeing Over Time (With vs Without Policy)
| Year | With Policy | Without Policy |
|---|---|---|
| Year 1 | 6 | 6 |
| Year 2 | 6 | 6 |
| Year 3 | 6 | 6 |
| Year 5 | 6 | 6 |
| Year 10 | 6 | 6 |
| Year 20 | 6 | 6 |
Cost Estimates
Year 1: $50000000 (Low: $25000000, High: $75000000)
Year 2: $15000000 (Low: $10000000, High: $30000000)
Year 3: $15000000 (Low: $10000000, High: $30000000)
Year 5: $15000000 (Low: $10000000, High: $30000000)
Year 10: $9000000 (Low: $6000000, High: $12000000)
Year 100: $9000000 (Low: $6000000, High: $12000000)
Key Considerations
- The bill requires quick implementation, incurring initial administrative costs.
- Balancing between electronic and paper delivery might need careful management.
- Long-term benefits in cost savings can offset initial setup expenses for electronic delivery.
- Considering the option for investors to opt-out ensures inclusivity but may add to costs.