Investor email news alerts are part of a larger investor communication system meant to capture, collect, and manage your company’s pool of engaged investors. Unfortunately, the email news alert systems of most companies inadvertently leak away key contacts in your company’s engaged investor pool. Losing these capital markets relationships, which have been acquired and nurtured through the expenditure of significant resources and management’s time, directly translate into lost shareholder value.
What Are Investor Email News Alerts?
It is a best practice for companies to offer interested parties a subscription to an email news alert. Subscribers should receive email news alerts immediately after the company issues a news release. Ideally, the email news alert should contain the full body of the news release. This alerts investors to material news in a timely manner, promotes management credibility through transparency, and is an important part of a company’s ongoing engagement with the capital markets.
How Investor Email News Alerts Impact Your Capital Market Relationships
Investors and key capital market relationships rely heavily on email news alerts to stay informed about the companies they follow. So much so that failing to provide email news alerts in a timely manner can compromise your capital markets relationships. Here we investigate different ways your email communication system may be bleeding key relationships away from the company, and how to address these issues.
Avoid Losing Your Capital Market Relationships to a Leaky Email System
Your investor relations team should treat any investor that signs up for your company’s email news alert like gold. This is the first step in the investment / sales conversion funnel, and an important engagement opportunity.
Failing to subscribe and engage that investor in a timely manner could literally cost your company millions in market value.
Single Opt-In vs Double Opt-In: The First Source of Relationship Leakage
Single opt-in (SOI) email subscriptions involve the user entering their email to subscribe, and the subsequent addition of that user’s email address to your list without an additional second step re-confirming that they’ve subscribed.
Double opt-in (DOI) email subscriptions require the user to enter their email to subscribe, and then a second confirmation step. Before a subscription is activated both steps must be completed . The confirmation step requires the user to:
- Successfully receive a confirmation email from the subscription system; and
- Click on a link in that confirmation email to activate their subscription.
These additional steps create leakage points in your company’s communication system. We have worked with clients severely impacted by news alert service providers employing a double opt-in email system. At the time, their unconfirmed subscribers totaled 3,000 emails, compared with a confirmed subscriber base of 300. In our investigation of ongoing investor complaints, we discovered that the service provider’s double opt-in wasn’t working. The recipient’s email server labelled the provider’s confirmation email as junk or completely blocked the email.
On average, single opt-in processes enable a 20-30% higher subscription rate (industry estimates). In the real work case above, more than 90% of the potential subscribers failed to convert.
Subscription Reconfirmation: The Second Source of Relationship Leakage
Ensure your service provider DOES NOT employ an automated opt-out. Email service providers measure the “opens” of an email by embedding a small pixel image in each email. They then monitor whether the pixel is downloaded. However, this does not provide reliable information because most desktop email software applications block image downloads.
Taking this further, some service providers will note when multiple emails appear to be unopened and request additional confirmation that the recipient still wishes to be opted in. This becomes another source of subscriber attrition.
If your service provider is sending these to investors, not only are they diluting your material announcements, they are likely annoying key relationships which, left unaddressed, could cause your company to lose otherwise engaged contacts.
Universal Unsubscribes: The Third Source of Relationship Leakage
Ensure that your email news alert service provider DOES NOT employ a universal unsubscribe. Many service providers treat an unsubscribe from an individual company’s news alert as a universal unsubscribe across all the companies the provider serves. In this scenario,the service provider unsubscribes the investor from all companies served by the service provider, even though the investor only unsubscribed from Company X.
Email Deliverability (SPF/DKIM/DMARC): The Fourth Source of Relationship Leakage
SPF, DKIM, and DMARC help authenticate email by verifying that the email came from a trusted and authorized domain. These three authentication protocols help prevent spam, phishing attacks, and other email security risks. They can also kill your email.
Understanding the basics of SPF/DKIM/DMARC
For those of us that strictly send emails directly from our company’s email service, we can remain blissfully unaware of these terms as they will almost never come up. However, sound investor relations requires third party services to send emails to investors and capital market professionals in bulk on our behalf. It is therefore important to understand and configure these protocols correctly. Otherwise, your emails will be marked as SPAM or blocked entirely.
Sender Policy Framework (SPF) is a list of IP addresses for all the servers a specific domain sends emails from. This list lives in the domain name server (DNS) file for your company’s web domain. For MCI, we had to add the IP addresses for services like HubSpot, S&P BD Corporate, and a few other services that we send emails from.
DomainKeys Identified Mail (DKIM) enables domain owners to “sign” emails from their domain. The DKIM “signature” is a digital signature that uses cryptography to mathematically verify that the email came from the domain. DKIM credentials must be entered in your domain name server as a DNS TXT record.
Domain-based Message Authentication Reporting and Conformance (DMARC) tells a receiving email server what to do with the results after checking the emails and servers SPF and DKIM credentials.
Now that you know just enough to be dangerous, let’s tell you what to do with this information…
What to do with SPF/DKIM/DMARC Credentials
Any investor relationship management system sending email using your company’s corporate domain will require authentication through your company’s DNS. In most cases, your service provider will have a file you can request and forward to your company’s IT department who can then apply these credentials appropriately. It’s a simple fix. You just need to know to ask and to get your IT department involved.
Investor Email News Alerts Must Comply with the Relevant Rules and Regulations
Email news alerts are also one of the most challenging components of the communication cascade to legally implement and maintain. While we aren’t lawyers, this is a good starting point to understand the many frameworks at work. There are significant penalties for noncompliance, so pay attention.
Legal Frameworks Impacting Investor Email News Alerts
Regulations governing email communications in North America and the European Union include:
- Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003 (“CAN-SPAM”) in the United States;
- Canadian Anti Spam Legislation (“CASL”); and
- Europe’s General Data Protection Regulation (“GDPR”).
However, there are many overlapping layers of legislation across multiple jurisdictions that can affect you if subscribers are from those jurisdictions. Below is a summary of whether single opt-in subscription are permissible by jurisdiction.
Disclaimer: Please consult your internal and external legal counsel for additional information and guidance.
Legality of Single Opt-In Email News Alerts by Jurisdiction
| Jurisdiction | Single Opt-In Status | Notes |
| US (CAN-SPAM) | Allowed ✅ | Opt-in consent is not required by law (CAN-SPAM is opt-out). Single opt-in or even no opt-in is legal, provided emails include required disclosures and honor opt-outs. |
| Canada CASL | Allowed ✅ | Express opt-in consent required by law, but a one-step signup meets this requirement. Double opt-in is not mandated (single opt-in is legally sufficient if consent is documented). |
| Europe GDPR | Allowed ✅ (with consent) | Prior opt-in consent is required for marketing emails, but single opt-in is acceptable if it produces valid, GDPR-compliant consent. Double opt-in is recommended for proof, but not explicitly required by EU law. |
| Germany | Not Allowed ❌ (in practice) | Single opt-in alone is not accepted. Courts and regulators require a double opt-in to prove the subscriber’s consent. Double opt-in is effectively mandatory for compliance in Germany. |
| Austria | Conditionally Allowed ⚠️ | Law requires opt-in consent, and single opt-in is legal if consent is clear. Without double opt-in, you must ensure strong proof of consent. |
| Greece | Conditionally Allowed ⚠️ | Opt-in required by law; single opt-in is lawful if properly obtained. |
| Luxembourg | Conditionally Allowed ⚠️ | Opt-in consent required by law, and single opt-in can fulfill this. |
| Norway | Conditionally Allowed ⚠️ | Opt-in required; single opt-in is permitted legally but comes with some risk if not confirmed. |
| Switzerland | Conditionally Allowed ⚠️ | Opt-in consent required by Swiss law. Law doesn’t demand double confirmation; single opt-in counts as consent. |
| Australia | Allowed ✅ | Opt-in consent required (express or inferred) by law. Single opt-in (e.g. form signup) is valid express consent. |
Key: ✅ = Allowed; ⚠️ = Conditionally allowed (permitted by law but with proof of consent); ❌ = Not allowed (fails legal requirements).
Your Context Should Dictate Your Approach to Investor Email News Alert Regulatory Compliance
Large multi-national website and newswire service providers manage millions of email subscriber contacts globally. This exposes them to a complex multi-layered web of email and privacy laws across multiple jurisdictions. The volume, combined with the complex legal environment, creates significant potential liabilities. It also increases the probability that their mail servers will be blocked. For these global service providers, best practices include double opt-in, automated unsubscribes, and universal unsubscribes… The very practices described above that stifle and breakdown engagement between public companies and their investors.
By contrast, most IR departments manage less than 10,000 email subscribers. When compared with multi-national providers, this is a dramatic difference in terms of legal exposure, risks, and operational challenges. That is why public companies should consider bringing the management of their email news alerts in-house for greater flexibility. (We provide additional information about how to integrate email news alerts into your website system here)
Balancing the Risks
The 20-30% of investment community subscribers that fail to confirm through a double opt-in process still expect your company to provide timely updates. Failing to meet this expectation will harm 100% of those capital market relationships impacted, with significant consequences to your company’s future valuation.
By contrast, only a very small percentage of subscribers in restrictive jurisdictions will even bother to complain, let alone take any sort of action other than unsubscribing.
We argue that it is, on balance, more damaging for a public company to impair the dependability of its material news distribution to the investment community than it is to take a more pragmatic approach to the rules of jurisdictions halfway around the world.
Investor Email News Alert Compliance Strategies
For micro and small cap companies that do not have, and who do not actively seek, investors from stringent double opt-in jurisdictions (namely Germany), there is obviously very little concern. However, as companies grow, and as investors in more restrictive jurisdictions begin to invest and subscribe, it is worth having a discussion with your legal counsel about the following tactics:
- The terms of use of your website can be adjusted to prohibit email news alert subscriptions from jurisdictions where such subscriptions would be unlawful. (And if users from such jurisdictions break those terms of use, then it’s up to them)
- The subscription process can be split into a single opt-in for jurisdictions where this is acceptable, and double opt-in for more stringent jurisdictions.
We strongly believe that a pragmatic approach that is contextually appropriate to your company’s situation is the best way forward.
Ensure There are Clear Calls to Action to Subscribe Across All Mediums
From email signatures, news releases, websites, webcasts, to every other investor medium, be sure to incorporate clear calls to action and pathways for investors to subscribe to your investor email news alert.
Final Thoughts – Your Email News Alert Represents Your Pool of Engaged Capital Market Contacts.
Your company’s email news alert should be effectively capturing and communicating with your company’s pool of engaged investors. While compliance with email regulations is paramount, ensure that your company is taking an approach that is appropriate to its context. Finally, drive investors into the email news alert at every opportunity with clear calls to action. The email news alert is the very top of the investor conversion funnel. Make sure your system isn’t compromised. If you’re struggling with the implementation of a modern digital investor conversion funnel please consider MCI’s Digital and AI Technology Services.