A Bryan Cave blog provides some helpful input about the SEC’s recently adopted electronic signature process – a topic that we’ve received a lot of questions about in our Q&A Forum. Here’s an excerpt addressing a common area of uncertainty: will the authentication requirements be met if a company emails a document for signature and asks that the recipient reply by email affirmatively indicating approval of the filing?
Many take the more conservative view that affirmative reply emails, without added features, are not sufficiently secure to authenticate the signer’s identity. For example, someone other than the signer may have access to his or her email account and the ability to send affirmative reply emails on his or her behalf. Similarly, someone could theoretically walk by an unoccupied computer and send a reply email.
Another view is that an affirmative reply email in and of itself should be a sufficient “logical or digital” authentication as long as the attestation form confirms the signatory’s email address to be used for that purpose.
We recommend that unless and until the SEC provides guidance, companies proceed with caution in using “affirmative reply” emails to authenticate signatures, and that, to the extent practicable, they consider adding features such as those discussed in Item 3 below.
As the blog’s response suggests, the details surrounding the authentication requirement are somewhat murky, and this is an area where experienced practitioners disagree on the right approach. Some guidance from the Staff on this and other electronic signature-related topics would be helpful. Sure, this is pretty mundane stuff – but worrying about the mundane stuff probably accounts for the vast majority of sleepless nights among securities lawyers.
-John Jenkins, TheCorporateCounsel.net February 24, 2021
