SEC revises rules to permit use of electronic signatures for EDGAR filings



November 20, 2020

Securities Law Alert

Author(s): Lloyd H. Spencer, Brianna Thompson

On November 17, 2020, the Securities and Exchange Commission (Commission) adopted amendments to Regulation S-T and the EDGAR Filer Manual to permit the use of electronic signatures in connection with electronic filings on EDGAR. Currently, Rule 302(b) of Regulation S-T (Rule 302(b)) requires each signatory of an electronic filing with the SEC to manually sign a signature page or other document (authentication document) that authenticates, acknowledges, or otherwise adopts his or her signature that appears in typed form within the electronic filing, before or at the time of the filing with the SEC. The company is required to retain the authentication documents for a period of five (5) years.

Sparked by the work-from-home environment in response to the COVID-19 pandemic, the widespread use of electronic signatures and technological developments in the authentication and security of electronic signatures as well as rulemaking petitions and a letter in support of the rulemaking petition signed by 100 public companies, the Commission reevaluated the requirement that signatories may only manually sign authentication documents. The Commission amended Rule 302(b) to make it more practical for today’s current environment by permitting a signatory to an electronic filing who follows certain procedures to sign an authentication document through an electronic signature that meets certain requirements. Companies will still be required to retain the authentication document for a period of five (5) years.

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 Commission noted that these requirements are intended to be technologically neutral and allow for different types and forms of electronic signatures provided that the signing process satisfies conditions that relate to the validity and enforceability of an electronic signature.

Before a signatory initially uses an electronic signature to sign an authentication document, the signatory must manually sign a document attesting that the signatory agrees that using an electronic signature in any authentication document constitutes the legal equivalent of the individual’s manual signature for authentication purposes. Companies must retain this manually signed document for as long as the signatory uses an electronic signature to sign authentication documents and for a minimum of seven years after the date of the most recent electronically signed authentication document.

The new rules will be effective immediately upon publication in the Federal Register.

This amendment was announced November 17, 2020, and the final rule can be found here.

The foregoing has been prepared for the general information of clients and friends of the firm. It is not meant to provide legal advice with respect to any specific matter and should not be acted upon without professional counsel. If you have any questions or require any further information regarding these or other related matters, please contact your regular Nixon Peabody LLP representative. This material may be considered advertising under certain rules of professional conduct.

Back to top