SEC Adopts Final Rules to Permit Electronic Signatures

On November 17, 2020, the Securities and Exchange Commission (“SEC”) voted to adopt amendments to Regulation S-T and the Electronic Data Gathering, Analysis, and Retrieval system (“EDGAR”) Filer Manual to permit the use of electronic signatures when executing authentication documents in connection with electronic filings on EDGAR. The SEC adopting release indicates that these new rules were adopted in recognition of the current widespread use of electronic signatures, technological developments in the authentication and security of electronic signatures, and increased difficulties in obtaining manual signatures during the ongoing COVID-19 pandemic.

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.

Under the new rules, a signatory will be permitted to sign an authentication document through an electronic signature provided that certain requirements are met. First, before using an electronic signature to sign an authentication document, the signatory must manually sign a document attesting that the signatory agrees that the use of an electronic signature constitutes the legal equivalent of such individual’s manual signature. The electronic filer must retain this manually signed document for as long as the signatory may use an electronic signature to sign an authentication document and for a minimum period of seven years after the date of the most recent electronically signed authentication document.

Second, the electronic signature must meet certain requirements specified in the EDGAR Filer Manual. The signing process for the electronic signature, at a minimum, must:

  • 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 SEC adopting release notes that these new rules provide electronic filers with additional flexibility for the electronic filing of documents with the SEC. The new rules will be effective immediately upon publication in the Federal Register. The SEC’s press release announcing the final rules is available at this link and the final rules are available at this link.

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