If you belong to any print industry trade associations, you may have heard from them recently about a proposal by the U.S. Securities and Exchange Commission (SEC) to let investment firms take some of the paper out of their reporting to shareholders. The change, designated Rule 30e-3, has drawn protests from industry groups that view paperwork reduction as contrary to the interests of printers and consumers alike.

Rule 30e-3 is a part of a package of changes proposed by the SEC in May. They’re aimed both at modernizing and improving information reporting by investment companies and at giving the SEC more insight into how this $18 trillion financial sector operates. If the changes are approved, mutual funds, ETFs, and other providers of investment services will face new data reporting requirements that the SEC believes will give it a better understanding of risk in the asset management industry.

Rule 30e-3 offers investment firms a bit of relief by making it easier for them to transition to electronic reporting to their customers. Under it, they would be permitted to post shareholder reports and quarterly portfolio holdings on their web sites instead of having to print and mail them to those who have not opted to receive the documents electronically.

The firms would be required to give advance written notice of the change to shareholders. Those who wished to continue receiving paper reports would then have 60 days to inform the companies of their preference. Failure to send notice within 60 days would be taken as implied consent to the electronic replacement (although shareholders could continue to request and receive paper copies even if consent was given).

Printing industry groups find nothing to like in Rule 30e-3. Printing Industries Alliance, for example, has advised its members in New York State, northern New Jersey, and northwestern Pennsylvania that if investment firms stop printing the documents the rule says they no longer have to print, elimination of the work could cost the industry $500 million in sales and 5,000 jobs. The group, a regional affiliate of Printing Industries of America, also warns that affected printers will be forced to start looking at other markets to make up for the volume they have lost.

As for the impact on consumers, the anti-Rule 30e-3 position is that without paper documents to guide them, shareholders will have a harder time making informed investment decisions. Opponents claim that a majority of shareholders prefer to receive financial information in printed form and that large numbers of them—especially those who are elderly, poor, or living in rural areas—don’t have adequate access to documents posted on web sites.

In the vanguard of opposition to Rule 30e-3 is Consumers for Paper Options, an advocacy group created by the American Forest & Paper Association (AF&PA) and the Envelope Manufacturers Association (EMA). It has joined with other consumer groups to criticize the rule for requiring investors to opt-in to paper delivery instead of electronic presentation. The coalition also claims that most Americans view “implied consent” of the kind proposed in Rule 30e-3 as an example of “the government overstepping its boundaries.”

Needless to say, Consumers for Paper Options and its partners want to see the rule abandoned. If the SEC were to take that step, it would not be until after the agency has finished reviewing the responses that were submitted during the public comment period following the announcement of the modernization proposal in May.

The comment period for rulemaking closed on August 11. The responses, pro and con, can be read here. Earlier this month, Consumers for Paper Options reported that two U.S. Senators and a member of the House of Representatives have asked the SEC to extend the comment period for an additional 90 days. In a letter to SEC chair Mary Jo White, the lawmakers express concern about the burden the rule might place in shareholders who rely on paper delivery.

The SEC estimates that more than 28,000 funds and investment advisers currently file reports with it. Given the size of this industry and the fact that 55% of Americans own stocks, the stakes on both sides of the argument about Rule 30e-3 are high.

In the public comments, lawyers for one fund note that it spends $3.8 million annually to print and mail shareholder reports to direct fund investors. “For our direct investors, we estimate a savings of approximately 50% if we could provide shareholders with electronic access to the same paper information,” the attorneys say.

This individual investor writes, “I rely on my investment statement via USPS mail as well as other investors who may not have access to electronic services. Mail delivery is universally available and it provides the broadest access to all recipients. It should be the default option for information distribution.

“Additionally, online-only access to investment information could open up numerous security issues for the countless Americans who prefer the safety, security and privacy that they use of the Postal Service has provided for hundreds of years.”

In a response to a query from WhatTheyThink on Sept. 3, a spokesperson for the SEC said that a decision on Rule 30e-3 was still pending. Comments submitted after the August 11 closing continue to be posted and evaluated.