The staff of the SEC’s Division of Corporation Finance, the Division of Investment Management, and the Division of Trading and Markets has issued a statement regarding Rule 302(b) of Regulation S-T. This statement pertains to concerns stemming from the ongoing COVID-19 pandemic. The SEC has received inquiries from persons and entities subject to Regulation S-T concerning these authentication document retention mandates under Rule 302(b). These requirements can prove to be difficult to meet in light of health, transportation, and other logistical issues raised by the spread of coronavirus disease. This staff statement is temporary and remains in effect until the staff provides public notice that it no longer applies. Such notice will be published at least two weeks before the announced termination date.
Rule 302(b) of Regulation S-T requires that documents that are electronically filed with the SEC under the federal securities laws are manually signed on a signature page or other document authenticating, acknowledging or otherwise adopting a signatory’s signature that would appear in a typed filing. Such documents must be executed before or at the time the electronic filing is made. Electronic filers must also retain such documents for a period of five years and provide copies to the SEC upon request. The SEC has stated that the requirement to retain the paper original of authentication documents was established to provide a method for signatories to authenticate and adopt their typed signatures appearing on filed documents for evidentiary purposes.
The SEC expects all persons and entities subject to Regulation S-T to comply with these requirements of Rule 302(b) to the fullest extent practicable given their particular facts and circumstances. However, the staff understands that some persons and entities may have trouble satisfying these requirements due to circumstances arising from COVID-19. Given these circumstances, the SEC will not take enforcement action with respect to the requirements of Rule 302(b) if the following conditions are met:
- the 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. This document must be provided 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
- the filer establishes and maintains policies and procedures governing this process
The signatory may also provide an electronic record (such as a photograph or pdf) of such document to the filer when it is signed.
The SEC reminds issuers and signatories of the presumption within Section 6 of the Securities Act that a signature is validly authorized. It is expected that filers subject to Regulation S-T maintain procedures to ensure that any typed signature in an electronic filing has been affixed to that filing with the authority of the signatory. Signatories are also reminded of the penalties under 15 U.S.C. 78ff(a).
Sources:
Staff Statement Regarding Rule 302(b) of Regulation S-T in Light of COVID-19 Concerns (www.sec.gov)
