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Regulation and Compliance > Federal Regulation > FINRA

FINRA E-Signatures Rule Gets SEC Nod

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Outside FINRA headquarters in New York. Outside FINRA headquarters in New York. (Photo: Ron Pechtimaldjian/ALM)

The Securities and Exchange Commission has approved a proposed rule change to permit the use of electronic signatures for discretionary accounts and to clarify the scope of the rule.

Given technological advances relating to electronic signatures, including authentication and security, FINRA has amended Rule 4512(a)(3) to permit the use of electronic signatures.

The rule change is consistent with the Electronic Signatures in Global and National Commerce Act (E-Sign Act), which facilitates the use of E-signatures.

The changes become effective on May 6.

The rule would provide firms the option of obtaining either a manual or an electronic signature.

“For purposes of compliance with amended Rule 4512(a)(3), a valid electronic signature would be any electronic mark that clearly identifies the signatory and is otherwise in compliance with the E-Sign Act, the guidance issued by the SEC relating to the E-Sign Act, and the guidance provided by FINRA staff through interpretive letters,” FINRA explains in Regulatory Notice 19-13.

— Check out FINRA Exam Report: 5 Big Problem Areas for Brokers in 2018 on ThinkAdvisor.


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