The SEC continuously tries to improve communication between shareholders and registered investment companies (RICs) while working towards easier access and delivery of information. The SEC recently adopted Rule 30e-3, which offers shareholders a “notice and access” method to receive all future shareholder information.
 
Under the new rule, RICs can offer shareholders the option to receive RIC reporting electronically, increasing the efficiency and timing of receiving fund information. If a RIC adopts Rule 30e-3, it must: 

• Offer an election to shareholders to receive all reporting electronically at no additional cost via a specified public website.
• Ensure proper formatting relating to accessibility and location of reports on the public website.
• Provide paper notice to shareholders when new reports are available online. Directions must also be provided to access these new reports or to obtain additional paper copies.
• Provide free paper copies of all RIC reporting upon shareholder request. 

RICs may rely on the rule beginning no earlier than January 1, 2021, and are generally required to issue two years of notice to shareholders beginning on January 1, 2019, before relying on the rule. Newly offered RICs on or after January 1, 2021, may rely on the rule immediately. Investors preferring to receive the reports in paper may choose that option at any time free of charge.
 
If a shareholder elects to receive information electronically, shareholders can anticipate: 

• A public website where the shareholder can download RIC reports that include but are not limited to annual and semi-annual reports and quarterly holdings.
• A paper notice sent from a RIC, disclosing when new available information is accessible on the public website.
• A toll-free telephone number disclosed on the website in the event a shareholder would like to revert back to receiving all RIC reporting in paper format. 

With the adoption of Rule 30e-3, the SEC is striving to modernize shareholders’ experience. The SEC is encouraging the public to provide further feedback to continue the improvement of delivery and design for shareholders.

Contact Lori Novak at lnovak@cohencpa.com or a member of your service team to discuss this topic further.

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Cohen & Company is not rendering legal, accounting or other professional advice. Information contained in this post is considered accurate as of the date of publishing. Any action taken based on information in this blog should be taken only after a detailed review of the specific facts, circumstances and current law.