On November 17, 2020, the U.S. Securities and Exchange Commission issued a release adopting rule amendments to permit the use of electronic signatures in connection with electronic filings on EDGAR that are required to be signed. The new rules became effective immediately upon publication in the Federal Register on December 4, 2020. Companies beginning to use electronic signatures in SEC filings should keep in mind the key points below.
As we discussed in a previous article on the new electronic signature rules, the requirements for electronic signatures are set forth in Volume II of the EDGAR Filer Manual, and require that the signing process for the electronic signature satisfy the following criteria:
- 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, such that the signatory has notice of the substance of the document and an opportunity to review, and may confirm that the signatory signed such document at a later date
- Include a timestamp to record the date and time of the signature
Pursuant to the new rules, before a signatory initially uses an electronic signature to sign a document that will be filed electronically, the signatory must manually sign a statement attesting that the signatory agrees that the use of an electronic signature in any filing constitutes the legal equivalent of such individual’s manual signature. Attached to this alert is a sample attestation.
As noted in our form attestation, we believe that an individual’s email address serves as a logical or digital credential that authenticates the signatory’s individual identity so long as the signatory confirms the email address for such purpose in the manually signed attestation to the use of an electronic signature. Moreover, our form attestation acknowledges that it is common practice to have signatories sign stand-alone signature pages that are typically sent separately from the main document to which such signature pages will eventually be attached or associated.
We believe that the new rules permit application of that stand-alone process for electronic signatures in SEC filings, provided that when the signature page is sent, the solicitation includes a clear reference to the document to which it will be attached, even though the actual document is not then attached and even though the document may still be in a draft stage (generally with the actual document or draft having been sent separately). We believe a cover note like the one in our form attestation suffices for this purpose.
Our form attestation also includes a bracketed proviso that changes to the final version will not be material. We believe that this proviso is not strictly required by the rule, though it may be advisable for giving the signatory comfort, as it represents the current general practice for stand-alone signature pages.
Lastly, our form attestation reflects our belief that the requirement for a timestamp recording the date and time of signature may be satisfied by the use of DocuSign or a similar electronic signature service, wherein the system automatically records the date and time of the electronic signature (either in the form of an electronic record that can be accessed later or in the form of confirmatory email), since it will be demonstrable that the signature was delivered in advance of the filing.
The SEC may issue Compliance and Disclosure Interpretations (C&DIs) that confirm or clarify the subjects on which we have provided our interpretation, and in the event of such C&DIs, we will follow up with an update.
Electronic Signatures for EDGAR Filings
Under the SEC’s rules for electronic signatures, prior to the submission of an electronic signature on a filing on EDGAR the company must obtain a manually signed copy of the electronic signature attestation form attached as Annex A.
The company must retain this document for as long as it makes use of an electronic signatures for a signatory in filings with the SEC and for a minimum period of seven years after the date of the most recent electronically signed document for that signatory filed with the SEC. The company must furnish a copy of this manually signed document upon request to the SEC or its staff.
After obtaining an executed attestation, any documents sent out for electronic signature must demonstrate a logical association with the signature page or document being signed, such that the signatory has notice of the substance of the document and an opportunity to review, and may confirm his or her signature at a later date. Set forth below is a model cover email that should accompany any electronic signature requests.
Please find attached a signature page to [DESCRIPTION OF DOCUMENT], a full copy of [the current draft of] which has been separately emailed to you. By electronically signing the attached signature page, you hereby consent to attachment or other association of your signature to the final version of said document[, provided that any changes that may be made to the final version of the document compared to the last version sent to you shall not be material].
Note: Our form attestation also includes a bracketed proviso that changes to the final version will not be material. We believe this proviso (that changes to the final version will not be material) is not strictly required by the rule, though it may be advisable for giving the signatory comfort, as it represents the current practice for stand-alone signature pages.
Electronic Signature Authentication Document
I, [NAME], hereby consent to the use of my electronic signature via DocuSign or other similar electronic signature service for purposes of an electronic filing on the Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system (including, without limitation, Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, CEO and CFO certifications required to be filed with Annual Reports on Form 10-K and Quarterly Reports on Form 10-Q, registration statements on Forms S‑1, S‑3, S-4 and S‑8, correspondence filings and Section 16 filings) by [COMPANY NAME] (the “Company”) with the Securities and Exchange Commission (“SEC”).
I further hereby confirm and consent that the following email address(es) is/are unique to me individually and may be used by the Company, its counsel and other representatives and agents for purpose of transmitting and receiving documents for electronic signature authentic to me via DocuSign or other similar electronic signature service: [EMAIL ADDRESS(ES)]
I acknowledge that my electronic signature will be attached or associated (including on “stand‑alone” signature pages) with documents to be filed with the SEC and via EDGAR and confirm that I will not falsely deny having provided my electronic signature when provided in conformity with the above paragraphs (and any instructions or explanation provided in connection with the specific document), and I agree that the use of an electronic signature constitutes the legal equivalent of my manual signature for purposes of authenticating the signature to any SEC or EDGAR filing for which it is provided.
Note: It may be helpful for the signatory to provide a primary and backup email address, in case there are issues with the primary address. Also, care will need to be exercised if the signatory changes email addresses, particularly in connection with change of employment, to update this attestation.