To modernize and strengthen the agency’s operations, the Securities and Exchange Commission adopted a final rule on Nov. 17 permitting the use of electronic signatures in authentication documents.
The Commission also adopted amendments to its Rules of Practice to require individuals involved in administrative proceedings to file and serve documents electronically.
In the first action, the Commission adopted rule amendments to permit the use of e-signatures when executing authentication documents required under Regulation S-T in connection with electronic filings on EDGAR that are required to be signed. Rule 302(b) of Regulation S-T currently requires that each signatory to an electronic filing manually sign a signature page or other document—authentication document—before or at the time of the electronic filing to authenticate the signature that appears in typed form within the electronic filing.
Recognizing the difficulties associated with obtaining manual signatures under COVID-19 and the improvements in electronic signature software technology, the newly adopted rule permits a signatory to an electronic filing who follows certain procedures to sign an authentication document through an e-signature that meets certain requirements specified in the EDGAR Filer Manual.
According to the final rule’s preamble, the requirements will specify that the signing process for the electronic signature must, at a minimum:
- require the signatory to present a physical, logical or digital credential that authenticates the signatory’s individual identity;
- reasonably provide for non-repudiation of the signature;
- provide that the signature be attached, affixed or otherwise logically associated with the signature page or document being signed; and
- include a timestamp to record the date and time of the signature.
The other existing requirements of Rule 302(b) will remain unchanged, including the requirements that an electronic filer retain the authentication document for a period of five years and furnish a copy of it upon request to the Commission or its staff.
In addition, the Commission amended certain rules and forms under the Securities Act, Exchange Act, and Investment Company Act to allow the use of e-signatures in authentication documents in connection with certain other filings when these filings contain typed, rather than manual, signatures.
“These amendments recognize the widespread use of electronic signatures and technological developments in the authentication and security of electronic signatures, as well as the continuing need to support remote workforces, and follow a rulemaking petition joined by nearly 100 public companies,” the SEC said in a statement announcing the rule.
In the second action, the Commission adopted rule amendments to require electronic filing and service of documents in administrative proceedings. These rule amendments also require redaction of sensitive personal information from many of these documents before filing with the Commission.
The amendments will become effective 30 days after publication of the adopting release in the Federal Register. However, compliance will not be required until April 12, 2021, and there will be an initial 90-day phase-in period following the compliance date.
