The SEC added Compliance and Disclosure Interpretations ("C&DIs") guidance with respect to certain disclosure rules adopted under the Securities Act. New Question 271.25 of the C&DIs addresses permissible safeguards with respect to electronic access to Securities Act Rule 701(e) information (for firms that use electronic delivery to satisfy Rule 701(e) disclosure requirements).
The SEC affirmed that companies may implement "standard electronic safeguards," including user-specific login requirements to protect sensitive company information. However, companies may not implement measures that are burdensome to the point that recipients are unable to "effectively access the required disclosures." The SEC discussed dedicated physical disclosure rooms as an example, asserting that such rooms must be accessible during ordinary business hours. Further, the SEC said that the medium used to provide required disclosures should allow for intended recipients to retain or have ongoing access to the disclosures.
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