On Nov. 17, 2020, the U.S. Securities and Exchange Commission (SEC) announced the
adoption of final rules
amending Rule 302 of Regulation S-T to permit the use of electronic
signatures, along with conforming changes to related rules under the
Securities Act, Exchange Act and Investment Company Act as well as the
EDGAR Filer Manual.
Electronic filers can now establish an “initial attestation” document from
signatories, manually signed, that authorizes future uses of electronic
signatures on documents filed with the SEC. Once established, the signatory
can, subject to verification and other requirements below, authorize
electronic signatures to be affixed to filings.
Prior to the amendments discussed in this alert, Rule 302(b) of Regulation
S-T required that each signatory to an electronic filing manually sign a
signature page or other document (a signature authentication document,
commonly referred to as a document with a “conformed” signature) before or
at the time of such electronic filing. The purpose was to authenticate,
acknowledge or otherwise adopt the signature that appears in typed form
within the electronic filing. An electronic filer also was required to
retain the “wet ink” signature authentication document with respect to each
signatory to the electronic filing for a period of five years and to
furnish a copy to the SEC upon request. The SEC has cited failure to
maintain such manual signatures as part of broader enforcement.
In March 2020, in light of the public health and safety concerns related to
COVID-19, the staff of several SEC divisions (including the Division of
Corporation Finance) provided some relief from the “wet ink” signature
requirements under Rule 302(b). In April, a group of law firms submitted a
petition for rulemaking seeking an amendment to Regulation S-T to permit the use of
electronic signatures due to their widespread use in connection with board
of directors’ authorizations and important corporate transactions. In June,
nearly 100 public companies jointly submitted a letter in support of the
In the adoption release for the final rules, the SEC noted that “the
authentication document requirement in Rule 302(b) ‘was established to
provide a satisfactory means by which signatories could authenticate and
adopt their typed signatures appearing on filed documents for evidentiary
purposes.’ ” In light of the widespread use of electronic signatures and
improvements in electronic signature software technology, the SEC
re-evaluated the “wet ink” signature requirement and amended Rule 302(b) to
permit electronic signatures that follow certain procedures enumerated
The amendments were immediately effective upon publication in the Federal
Register, which occurred on Dec. 4, 2020. The SEC chose to forego the
notice and comment period as it found there was good cause to make the
amendments effective upon publication and stated in the final rules release
that signatories and electronic filers should have the option of using
electronic signatures in signature authentication documents as soon as
Signature Requirements Under Amended Rule 302(b):
The final rules amended 302(b) to permit a signatory to electronically sign
a signature authentication document as long as 1) an initial signature
authentication document attesting to the use of the signatory’s electronic
signature (initial attestation) is manually signed by the applicable
signatory and 2) certain procedures are followed when obtaining an
electronic signature for each signature authentication document. The
requirements under Rule 302(b) to retain the signature authentication
document for an electronic filing for a period of five years and to furnish
a copy of the signature authentication document upon request by the SEC
remain unchanged. In addition, under new Rule 302(b)(3), manually signed
documents, including the initial attestation document and any electronic
signature authentication document, may be retained and stored by electronic
means. There is no need to retain a physical copy of those documents.
Initial Attestation for an Electronic Signature:
To validly sign a signature authentication document electronically, the
signatory must first manually sign an initial attestation agreeing that the
use of an electronic signature in any authentication document constitutes
the legal equivalent of such individual’s manual signature for purposes of
authenticating the signature to any filing for which it is provided.
The manually signed initial attestation must be retained by the filer for
as long as the signatory may use an electronic signature and for a minimum
of seven years after the date of the most recently electronically signed
signature authentication document. A copy of the document must be furnished
to the SEC upon request. Although the SEC has not stated whether the March
2020 guidance also applies to the “wet ink” signature of the initial
attestation, it is possible that the manually signed initial attestation
may also be subject to the relief with respect to recordkeeping under Rule
302 as long as the March 2020 guidance remains in effect.
Procedures for Electronic Signatures:
Once an initial attestation in compliance with the new rules has been
established, electronic signatures must be obtained through a signing
process that meets the following requirements:
- The signatory must present a physical, logical or digital credential that
authenticates the signatory’s individual identity.
- The EDGAR Filer Manual defines the term “credential” as “an object or
data structure exclusively possessed and controlled by an individual to
assert identity and provide for authentication,” which would include a
driver’s license, passport, passcode or credential chip on an
employer-issued ID badge.
- Commentators have observed that the email address and identity
verification protocols employed by the leading electronic signature
transaction management programs would qualify as a “credential” for
purposes of the new rules.
- The electronic signature is produced in a manner that reasonably provides
for non-repudiation of the signature.
- According to the EDGAR Filer Manual, “non-repudiation” means assurance
that an individual cannot falsely deny having performed a particular
- Most electronic signature platforms combine an electronic signature with
public key encryption to provide for non-repudiation by enabling the
recipient of the electronic signature to validate the source of the
electronic signature with a reasonable degree of accuracy, assuming that
the signatory’s account with that platform has not been compromised.
- The signature must be attached, affixed or otherwise logically associated
with the signature page or document being signed.
- A time stamp must be included to record the date and time of the
- Electronic signature transaction management programs, such as DocuSign
and Adobe Sign, generate a time stamp when the document is electronically
These requirements are meant to be technologically neutral and allow for
different types and forms of electronic signatures as long as the process
for obtaining such electronic signature meets the above requirements.
However, commentators expect that many companies will satisfy these
requirements with third-party software already in use, such as DocuSign and
Consistent with the definition of the term in the Federal Electronic
Signatures in Global and National Commerce (E-SIGN) Act, the EDGAR Filer
Manual defines “electronic signature” as “an electronic sound, symbol, or
process attached to or logically associated with a record and executed or
adopted by a person with the intent to sign the record.” Given the broad
definition of “electronic signature,” some commentators suggest it would be
possible for a voice mail or an email to serve as an electronic signature,
as long as all the requirements are met under Rule 302(b).
Filings Covered By the Amendment:
Electronic signatures are now permitted to be used for registration
statements under the Securities Act, as well as reports and other documents
filed pursuant to the Exchange Act (e.g., Forms 8-A, 8-K, 10, 10-K and
10-Q, as well as beneficial ownership reports filed pursuant to Section 16
(i.e., Forms 3, 4 and 5) and Sections 13(d) and 13(g) and Schedule TO).
In a separate release, the SEC announced changes to the process of applying for EDGAR access contained in the EDGAR Filer Manual, Volume I. Currently, to obtain EDGAR Access a filer must complete Form ID online and have an authorized signatory sign a printed copy of the online application in the presence of a notary. The amendments to EDGAR Filer Manual, Volume I, which will be effective upon publication in the Federal Register, remove the manual signature requirement for Form ID and permit electronic signatures and electronic notarization of Form ID. The amendments also clarify that the electronic signature requirements of Rule 302 discussed above will not apply to Form ID filings.
Electronic filers who want to utilize the new rules should identify those
signatories for documents filed on EDGAR and obtain manually signed initial
attestations that comply with the requirements of amended Rule 302(b) from
each of those signatories.
A process for obtaining electronic signatures on filing documents should be
established that complies with the requirements of amended Rule 302(b). One
way to approach this task would be to identify the electronic signature
transaction management programs (e.g., DocuSign) that meet these
requirements; ensure that all signatories utilizing electronic signatures
have an account with at least one of the applicable programs; and ensure
that the signature authentication document is delivered to the correct
record-keeping function for retention purposes.
Electronic filers who have provided others with signature authority through
powers of attorney may want to execute an addendum granting such electronic
signature authority and may want to review (and revise, if necessary) their
form power of attorney to include the required attestation for electronic
For additional guidance on the information in this alert, please contact
any of the authors, any member of McGuireWoods’
securities compliance team or your primary McGuireWoods contact.
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