Thought Leadership  •  April 23, 2020

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SEC OKs Apps to Deliver Summary Prospectuses for Variable Products

DFIN Input to Rule 498A Could Open the Door to Apps Industry-wide

When rule 30e-3 (also known as the E-Delivery Rule) came into effect, DFIN applauded the cautious step forward but encouraged the SEC to accelerate the wide adoption of modern technology (Read more at Looking Beyond the SEC’s New E-Delivery Rule).

Then, when the SEC proposed rule 498A to allow the use of Summary Prospectuses to communicate with investors in variable insurance products, DFIN again took the opportunity to press the case for digital transformation, arguing that an app-based disclosure solution should be allowed as a way to deliver those Summary Prospectuses.

And the SEC heard us. In formally adopting Rule 498A in March of 2020, they cited our input and clarified that the final rule does not preclude the use of apps to make financial disclosures.

On the surface of it, it’s another important win for DFIN expertise and our industry advocacy but it’s really much more than that. A closer reading suggests that Rule 498A is very likely to open the door to the use of apps across the industry. And that would represent a true acceleration toward a fully digital global investment experience.

FinTech, RegTech – It’s all Confidence Tech

In the investment industry, new regulations are introduced at an increasingly rapid pace. Some, like SEC rules 30e-3 and 498A, impose new obligations on the industry but also make it easier to achieve compliance by allowing the use of new technologies.

The SEC and investment company authorities around the world are coming to understand that today’s investors are digital-first and that tomorrow’s investors expect much more than online access to documents — they demand personalized e-delivery and an interactive experience that helps them extract maximum value from the information they receive.

To attract and retain future generations of investors, regulatory compliance must also become digitize-first and DFIN is leading the drive with the advocacy, experience and knowledge that keeps you informed – and the next-generation FinTech and specialized RegTech solutions that are accelerating the transformation of the industry.