The staff of various SEC divisions, including Corp Fin, has just issued a new Statement Regarding Rule 302(b) of Regulation S-T in Light of COVID-19 Concerns.  The statement offers some relief in connection with “the authentication document retention requirements under Rule 302(b) [of Reg S-T] in light of health, transportation, and other logistical issues raised by the spread of coronavirus disease 2019 (COVID-19).”

Rule 302(b) requires each person who signs a document that is filed electronically with the SEC to manually sign a signature page (or other document), before or at the time the electronic filing is made.  The manual signature serves to authenticate or adopt the signature that appears in typed form within the electronic filing. To facilitate authentication, the rule requires the company or other electronic filer to retain the signed documents for five years and to furnish copies to the SEC upon request.

However, COVID-19 has made compliance with that requirement difficult in some circumstances. Although the staff expects everyone to comply with these requirements of Rule 302(b) “to the fullest extent practicable,” in light of difficulties that filers and signatories may experience in satisfying these requirements as a result of COVID-19, the staff will now allow the signatory to retain the signed document and provide it to the filer as promptly as practicable as set forth below.  Specifically, the staff will not recommend enforcement action with respect to the requirements of Rule 302(b) if:

  • “a signatory retains a manually signed signature page or other document authenticating, acknowledging, or otherwise adopting his or her signature that appears in typed form within the electronic filing and provides such document, as promptly as reasonably practicable, to the filer for retention in the ordinary course pursuant to Rule 302(b);
  • such document indicates the date and time when the signature was executed; and
  • the filer establishes and maintains policies and procedures governing this process.”

The relief also allows the signatory to provide to the filer an electronic record (such as a photograph or pdf) of the document when it is signed.

As an example of how the staff envisions satisfactory implementation of the first bullet, the staff suggests that a signatory who is teleworking could “execute a hard copy of the signature page remotely and hold that page for delivery to the filer upon his or her return to the place of work.” The staff also suggests that a signatory may “provide to the filer an electronic record (such as a photograph or pdf) of such document when it is signed.”

Finally, the staff reminds everyone of the presumption that a signature is validly authorized, and advises of their expectation that filers subject to Reg S-T will “maintain procedures to ensure that any typed signature in an electronic filing is affixed with the authority of the signatory.” The staff also reminds signatories of the potential for penalties (fines and even imprisonment) for willful violations and false and misleading statements. Of course, as usual, the staff reminds us that the statement is just staff guidance and not legally binding.

For guidance on the legal, regulatory and commercial implications of the COVID-19 pandemic, see our Cooley coronavirus resource hub.

Posted by Cydney Posner