Many government agencies, regulatory bodies or private organizations require that individuals be provided with certain information at specific times. For example, the Securities and Exchange Commission (SEC) requires that certain individuals, such as prospective and existing investors, be delivered specific information about investment vehicles such as, for example, mutual funds. In the context of a prospective investor planning to invest in a particular mutual fund, for example, a mutual fund prospectus must be shown to have been delivered to the prospective investor in such a way that the prospective investor was provided with adequate notice of and access to the prospectus in accordance with SEC regulations. These delivery, notice and access requirements may be met, for example, by sending a copy of the prospectus to the prospective investor via the U.S. Postal Service. Similarly, other organizations have requirements that mandate similar information disclosure under an analogous procedure.
Delivering information on paper with hard copies of documents required to be sent to individuals (e.g., “sticker updates” to mutual fund prospectuses) is a time consuming and costly endeavor for companies and organizations. Printing and mailing costs alone can amount to millions of dollars per year.
Recently, certain organizations have begun to indicate that documents containing sensitive information may be distributed in electronic format with the caveat that any electronic delivery must meet at least the organization's electronic delivery requirements. Furthermore, Congress has passed, and the President has signed into law the Electronic Signatures in Global and National Commerce Act (ESIGN) giving legal validity to documents executed by electronic means that meet certain requirements. ESIGN further outlines standards for obtaining consent from a consumer for the electronic delivery of documents required to be provided to a consumer in writing.