A Securities and Exchange Commission plan to encourage more investors to access their mutual fund reports online has hit the equivalent of a paper jam as a result of pressure from associations representing paper manufacturers.

The American Forest & Paper Association and Envelope Manufacturers Association are among the groups opposing a proposed change to SEC disclosure rules concerning how mutual fund shareholder reports are delivered to investors, Bloomberg News reported. Currently paper copies must be made available unless a digital copy is requested. SEC is seeking to flip that, making digital copies the default and paper copies available only on request.

Proponents of the plan said the switch would save investors money by cutting down on paper costs and be better for the environment. But paper industry associations have lined up several powerful allies in their fight to make paper the default option, including AARP.

The worry for the paper industry is the SEC plan would set a precedent that other government agencies would follow, dramatically cutting back on the amount of paper they purchase.

"This development raised a red flag to us," Mark Pitts, executive director of printing-writing and pulp at AF&PA, told Bloomberg.

But other business groups say continuing to rely on paper makes no sense in a digital era. The Investment Company Institute noted that shareholder reports can be up to 651 pages long. The U.S. Chamber of Commerce also supports the digital proposal, calling the present debate a waste of time.

"If you sit down and think about this for a few minutes, there are radical changes coming in the next five years," said Tom Quaadman, senior vice president at the Chamber's Center for Capital Markets Competitiveness. http://bit.ly/2bheAzZ

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