[Federal Register Volume 85, Number 234 (Friday, December 4, 2020)]
[Rules and Regulations]
[Pages 78224-78230]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-26166]



[[Page 78224]]

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SECURITIES AND EXCHANGE COMMISSION

17 CFR Parts 230, 232, 240, 249, and 270

[Release Nos. 33-10889; 34-90441; 39-2534; IC-34096]


Electronic Signatures in Regulation S-T Rule 302

AGENCY: Securities and Exchange Commission.

ACTION: Final rule.

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SUMMARY: We are adopting amendments to Regulation S-T and the 
Electronic Data Gathering, Analysis, and Retrieval system (``EDGAR'') 
Filer Manual (``EDGAR Filer Manual'' or ``Filer Manual'') to permit the 
use of electronic signatures in signature authentication documents 
required under Regulation S-T in connection with electronic filings on 
EDGAR that are required to be signed. We are also adopting 
corresponding revisions to several rules and forms under the Securities 
Act of 1933 (``Securities Act''), Securities Exchange Act of 1934 
(``Exchange Act''), and Investment Company Act of 1940 (``Investment 
Company Act'') to permit the use of electronic signatures in signature 
authentication documents in connection with certain other filings.

DATES: Effective December 4, 2020. The incorporation by reference of 
the EDGAR Filer Manual is approved by the Director of the Federal 
Register as of December 4, 2020.

FOR FURTHER INFORMATION CONTACT: Charles Kwon, Office of Rulemaking, at 
(202) 551-3430, Division of Corporation Finance; Terri Jordan, Office 
of Rulemaking, at (202) 551-6792, Division of Investment Management; or 
Devin Ryan, Office of Chief Counsel, at (202) 551-5550, Division of 
Trading and Markets; U.S. Securities and Exchange Commission, 100 F 
Street NE, Washington, DC 20549.

SUPPLEMENTARY INFORMATION: We are adopting amendments to the following 
rules and forms to permit the use of electronic signatures in signature 
authentication documents in connection with certain specified filings, 
including electronic filings on EDGAR:

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           Commission reference                 CFR citation (17 CFR)
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Securities Act \1\:
    Securities Act Rule 402...............  Sec.   230.402.
    Securities Act Rule 471...............  Sec.   230.471.
Regulation S-T............................  Sec.  Sec.   232.10 through
                                             232.903.
    Rule 301..............................  Sec.   232.301.
    Rule 302..............................  Sec.   232.302.
Exchange Act \2\:
    Exchange Act Rule 12b-11..............  Sec.   240.12b-11.
    Exchange Act Rule 14d-1...............  Sec.   240.14d-1.
    Exchange Act Rule 15Fb1-1.............  Sec.   240.15Fb1-1.
    Exchange Act Rule 16a-3...............  Sec.   240.16a-3.
    Form CB...............................  Sec.   249.480.
Investment Company Act:
    Investment Company Act Rule 8b-11.....  Sec.   270.8b-11.
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    \1\ 15 U.S.C. 77a et seq.
    \2\ 15 U.S.C. 78a et seq.
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    We are also adopting an updated EDGAR Filer Manual, Volume II: 
``EDGAR Filing'' (Version 55) (November 2020) that sets forth certain 
requirements that the electronic signing process must meet when 
electronic signatures are used. The updated Filer Manual is 
incorporated by reference into the Code of Federal Regulations.\3\
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    \3\ 17 CFR 232.301.
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I. Discussion

    Regulation S-T, in conjunction with the EDGAR Filer Manual and 
other applicable rules, regulations, and forms, governs the electronic 
submission of documents filed with or otherwise submitted to the 
Securities and Exchange Commission (the ``Commission'') through 
EDGAR.\4\ Title 17, section 232.302(b) (Rule 302(b)) currently requires 
that each signatory to an electronic filing manually sign a signature 
page or other document (``authentication document'') before or at the 
time of the electronic filing to authenticate, acknowledge, or 
otherwise adopt the signature that appears in typed form within the 
electronic filing.\5\ An electronic filer must retain the 
authentication document with respect to each signatory to the 
electronic filing for a period of five years and must furnish a copy of 
it to the Commission or its staff upon request.\6\
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    \4\ Rule 10(a) of Regulation S-T [17 CFR 232.10a]. The EDGAR 
Filer Manual contains the technical specifications needed for filers 
to make submissions through the EDGAR system. The Commission 
originally adopted the EDGAR Filer Manual on April 1, 1993, with an 
effective date of April 26, 1993. Adoption of EDGAR Filer Manual, 
Release No. 33-6986 (Apr. 1, 1993) [58 FR 18638 (Apr. 9, 1993)]. The 
amendments adopted in this rulemaking do not apply to the notarized 
signature requests for EDGAR access pursuant to the requirements of 
Rule 10(b) of Regulation S-T. Moreover, the authentication document 
discussed herein is distinct from the authentication document 
referenced in Volume I of the Filer Manual in connection with Rule 
10(b) notarized authentication documents.
    \5\ Pursuant to Rule 302(a) of Regulation S-T, signatures 
required in any electronic submission must be in typed form.
    \6\ See Rule 302(b) of Regulation S-T. As discussed below, 
certain rules and forms under the Securities Act and the Exchange 
Act also require authentication documents in connection with certain 
filings when these filings contain typed, rather than manual, 
signatures. References to ``authentication documents'' in this 
release refers to such documents as required by Rule 302(b) or these 
other rules and forms, as the context requires.
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    The Commission has stated that the authentication document 
requirement in Rule 302(b) ``was established to provide a satisfactory 
means by which signatories could authenticate and adopt their typed 
signatures appearing on filed documents for evidentiary purposes.'' \7\ 
In March 2020, the Commission staff provided its views on, among other 
things, complying with this requirement when considering the public 
health and safety concerns related to COVID-19.\8\ In April 2020, the 
Commission received a rulemaking petition requesting that we permit the 
use of electronic signatures when executing authentication documents 
under Rule 302(b).\9\ The rulemaking petition states, among other 
things, that ``the current COVID-19 situation has . . . significantly 
increased the difficulties associated with obtaining manual `wet' 
signatures'' and that ``[i]mprovements in electronic signature software 
technology make it possible to confirm (with at least equal confidence 
to the collection of manual signatures) who has signed a document and 
when it was signed.'' In June 2020, nearly 100 public companies jointly

[[Page 78225]]

submitted a letter in support of the rulemaking petition.\10\
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    \7\ Application of the Electronic Signatures in Global and 
National Commerce Act to Record Retention Requirements Pertaining to 
Issuers under the Securities Act of 1933, Securities Exchange Act of 
1934 and Regulation S-T, Release No. 33-7985 (June 14, 2001) [66 FR 
33175 (June 21, 2001)] (citing Rulemaking for EDGAR System, Release 
No. 33-6977, Section III.F.2 (Feb. 23, 1993) [58 FR 14628 (Mar. 18, 
1993)]). In the 2001 release, the Commission issued guidance stating 
that the requirements to retain authentication documents are not 
subject to the Electronic Signatures in Global and National Commerce 
Act (``E-SIGN Act''), because ``authentication documents are records 
generated principally for governmental purposes rather than in 
connection with a business, consumer or commercial transaction.''
    \8\ See Staff Statement Regarding Rule 302(b) of Regulation S-T 
in Light of COVID-19 Concerns (Mar. 24, 2020), available at https://www.sec.gov/corpfin/announcement/rule-302b-regulation-s-t-covid-19-update.
    \9\ Specifically, the rulemaking petition requested that the 
Commission amend Rule 11 and Rule 302 of Regulation S-T, as well as 
any other necessary rules and forms, to permit the use of electronic 
signatures in addition to manual signatures when executing 
authentication documents under Rule 302 and to provide that 
authentication documents may be retained physically or 
electronically for the requisite five-year period. See letter from 
Wilson Sonsini Goodrich & Rosati, Fenwick & West LLP, and Cooley 
LLP, available at https://www.sec.gov/rules/petitions/2020/petn4-760.pdf.
    \10\ See comment letter from Richard Blake, et al., available at 
https://www.sec.gov/comments/4-760/4760-7278993-217809.pdf. We have 
not received any letters that oppose the rulemaking petition.
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    After considering the widespread use of electronic signatures and 
technological developments in the authentication and security of 
electronic signatures,\11\ and the issues raised in the rulemaking 
petition, we have reevaluated the requirement that signatories may only 
manually sign authentication documents under Rule 302(b). As a result, 
we are amending Rule 302(b) to permit a signatory to an electronic 
filing who follows certain procedures discussed herein to sign an 
authentication document through an electronic signature that meets 
certain requirements specified in the EDGAR Filer Manual.\12\ This 
amendment will provide additional flexibility in complying with the 
authentication document requirement by providing signatories with the 
option of signing an authentication document either manually or 
electronically, while requiring the signing process for an electronic 
signature to meet certain conditions that are consistent with the 
evidentiary purposes of the authentication document. The existing 
requirements of Rule 302(b) will be otherwise unchanged, including the 
requirements that an electronic filer retain the authentication 
document for a period of five years and furnish a copy of it upon 
request to the Commission or its staff.\13\
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    \11\ See discussion in Section IV. Economic Analysis infra.
    \12\ We are also adopting amendments to Rule 302(a) of 
Regulation S-T to update the definition of ``signature,'' by 
revising ``electronic entry'' to ``computer representation,'' 
``letters'' to ``symbols,'' and by removing references to obsolete 
terminology (``magnetic impulse''). This amendment does not change 
the substance or intended meaning of the definition.
    \13\ See new Rules 302(b)(1) and (b)(3).
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    We are setting forth the requirements for the electronic signature 
signing process in the EDGAR Filer Manual, which will specify that, 
when a signatory signs an authentication document using an electronic 
signature, the signing process for the electronic signature must, at a 
minimum:
     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; and
     Include a timestamp to record the date and time of the 
signature.\14\
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    \14\ For purposes of the process requirements underlying the 
electronic signature of authentication documents, we are defining 
the terms ``electronic signature,'' ``credential,'' and ``non-
repudiation'' in the EDGAR Filer Manual. The term ``electronic 
signature'' is defined as an electronic sound, symbol, or process, 
attached to or logically associated with a record and executed or 
adopted by a person with the intent to sign the record. While this 
definition is consistent with the widely used definition of the term 
``electronic signature'' in the E-SIGN Act, 15 U.S.C. 7006, we 
continue to believe that the E-SIGN Act does not apply to the 
Commission's requirements related to authentication documents. See 
supra note 7. The term ``credential'' is defined as an object or 
data structure exclusively possessed and controlled by an individual 
to assert identity and provide for authentication. The term ``non-
repudiation'' is defined as assurance that an individual cannot 
falsely deny having performed a particular action.
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    These requirements are intended to be technologically neutral and 
allow for different types and forms of electronic signatures, provided 
that the signing process satisfies a number of conditions that relate 
to the validity and enforceability of an electronic signature. The 
signing process must incorporate a security procedure that requires the 
authentication of a signatory's individual identity through a physical, 
logical, or digital credential, and the signing process must reasonably 
provide for the non-repudiation of the electronic signature. The 
signing process requirements also provide that the signature be 
logically associated with the signature page or document being signed, 
thereby providing the signatory with notice of the nature and substance 
of the document and an opportunity to review it before signing, and 
that the electronic signature be linked to the signature page or 
document in a manner that allows for later confirmation that the 
signatory signed the signature page or document. Finally, given that a 
signatory must execute an authentication document pursuant to Rule 
302(b) before or at the time an electronic filing is made, the signing 
process must include a timestamp that records the date and time of the 
electronic signature.
    We have included a requirement in new Rule 302(b)(2) that, before a 
signatory initially uses an electronic signature to sign an 
authentication document, the signatory must manually sign a document 
attesting that the signatory agrees that the use of an electronic 
signature in any authentication document constitutes the legal 
equivalent of such individual's manual signature for purposes of 
authenticating the signature to any filing for which it is provided 
(``initial electronic signature authentication document'').\15\ An 
electronic filer must retain this manually signed document for as long 
as the signatory may use an electronic signature to sign an 
authentication document and for a minimum period of seven years after 
the date of the most recent electronically signed authentication 
document. Pursuant to Rule 302(b)(3), the electronic filer shall 
furnish a copy of it upon request to the Commission or its staff.\16\
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    \15\ See new Rule 302(b)(2). Additionally, Section 6(a) of the 
Securities Act provides that signatures to any Securities Act 
registration statement shall be presumed to have been written by 
authority of the person(s) who signed it, and the burden of proof, 
in the event such authority shall be denied, shall be upon the 
denying party. See 15 U.S.C. 77f(a).
    \16\ A manually signed document under Rule 302(b), including an 
initial electronic signature authentication document or a manually 
signed authentication document, may be stored via electronic means. 
See new Rule 302(b)(3).
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    In addition, we are amending certain rules and forms under the 
Securities Act, Exchange Act, and Investment Company Act to allow the 
use of electronic signatures in authentication documents in connection 
with certain other filings when these filings contain typed, rather 
than manual, signatures.\17\ These amendments extend comparable 
treatment to these filers in allowing electronically signed 
authentication documents under generally the same conditions applicable 
to electronic filers under Rule 302(b).\18\
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    \17\ Securities Act Rules 402(e) and 471(b); Exchange Act Rules 
12b-11(d), 14d-1(h), 16a-3(i) and, 15Fb1-1; Form CB; and Investment 
Company Act Rule 8b-11. Rules 402(e), 471(b), 12b-11(d), 14d-1(h); 
16a-3(i); and 8b-11 allow manual, typed, duplicated, or faxed 
signatures on paper filings, with a manual signature retention 
requirement for typed, duplicated, or faxed signatures. See Phase 
One Recommendation of Task Force on Disclosure Simplification, 
Release No. 33-7300 (May 31, 1996) [61 FR 30397 (June 14, 1996)] at 
30400 (stating that the Commission was adopting these requirements 
``to provid[e] comparable treatment to both paper and electronic 
filers'' with respect to the signature and authentication 
requirements). The signature requirements in Rules 12b-11(d) and 
14d-1(h) apply solely with respect to the scope of regulation 
defined in Rules 12b-11 and 14d-1(a), respectively.
    \18\ The amendments to these rules include a cross reference to 
the requirements set forth in Rule 302(b) of Regulation S-T.
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    Along with the adoption of an updated EDGAR Filer Manual, we are 
amending Rule 301 of Regulation S-T to provide for the incorporation by 
reference into the Code of Federal Regulations of the current 
revisions. This incorporation by reference was approved by the Director 
of the Federal Register in accordance with 5 U.S.C. 552(a) and 1 CFR 
part 51. The updated EDGAR Filer Manual is available at https://www.sec.gov/info/edgar/edmanuals.htm. The EDGAR Filer Manual also is 
available for website viewing and printing in the

[[Page 78226]]

Commission's Public Reference Room, 100 F Street NE, Washington, DC 
20549, on official business days between the hours of 10:00 a.m. and 
3:00 p.m.

II. Procedural and Other Matters

    The Administrative Procedure Act (``APA'') generally requires an 
agency to publish notice of a rulemaking in the Federal Register and 
provide an opportunity for public comment.\19\ This requirement does 
not apply, however, to rules of agency organization, procedure, or 
practice,\20\ or if the agency ``for good cause finds . . . that notice 
and public procedure thereon are impracticable, unnecessary, or 
contrary to the public interest.'' \21\ We find that these amendments 
relate to agency procedures or practice and do not substantially alter 
the rights and obligations of non-agency parties. We also find that 
notice and comment are unnecessary because the amendments merely 
provide an optional alternative method for signatories to sign 
authentication documents pursuant to Rule 302(b) and corresponding 
provisions in our rules and forms. It follows that the amendments do 
not require analysis under the Regulatory Flexibility Act or a report 
to Congress under the Small Business Regulatory Fairness Act.\22\
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    \19\ See 5 U.S.C. 553(b) and (c).
    \20\ 5 U.S.C. 553(b)(3)(A).
    \21\ 5 U.S.C. 553(b)(3)(B).
    \22\ See 5 U.S.C. 601(2) (for purposes of a Regulatory 
Flexibility Act analysis, the term ``rule'' means any rule for which 
the agency publishes a general notice of proposed rulemaking) and 5 
U.S.C. 804(3)(C) (for purposes of Congressional review of agency 
rulemaking, the term ``rule'' does not include any rule of agency 
organization, procedure, or practice that does not substantially 
affect the rights or obligations of non-agency parties).
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    The APA generally requires that an agency publish an adopted rule 
in the Federal Register at least 30 days before it becomes 
effective.\23\ This requirement, however, does not apply if the agency 
finds good cause for making the rule effective sooner.\24\ For the same 
reasons we are forgoing notice and comment, the Commission finds good 
cause to make these amendments effective upon publication in the 
Federal Register. We further believe signatories and electronic filers 
should have the option of using electronic signatures in authentication 
documents as soon as practicable and find there is good cause for these 
amendments to take effect upon publication in the Federal Register. We 
also believe the amendments relieve a restriction in that execution of 
authentication documents no longer will be limited to manual or ``wet'' 
signatures.\25\
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    \23\ 5 U.S.C. 553(d)(3).
    \24\ Id.
    \25\ 5 U.S.C. 553(d)(1).
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    If any of the provisions of these rules, or the application thereof 
to any person or circumstance, is held to be invalid, such invalidity 
shall not affect other provisions or application of such provisions to 
other persons or circumstances that can be given effect without the 
invalid provision or application.

III. Paperwork Reduction Act

    Certain provisions of our rules and forms contain ``collection of 
information'' requirements within the meaning of the Paperwork 
Reduction Act of 1995 (``PRA'').\26\ The hours and costs associated 
with preparing and filing forms and retaining records--including those 
associated with signature authentication requirements--constitute 
reporting and cost burdens imposed by the collection of information 
requirements. An agency may not conduct or sponsor, and a person is not 
required to respond to, a collection of information requirement unless 
it displays a currently valid Office of Management and Budget control 
number. Compliance with the information collections is mandatory. The 
paperwork burden associated with the Commission's signature 
authentication requirements is imposed through the forms that are 
subject to those requirements and is reflected in the analysis of those 
forms. Responses to these information collections are not kept 
confidential and there is no mandatory retention period for the 
information disclosed, although filers are required to retain an 
authentication document for a period of five years.
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    \26\ 44 U.S.C. 3501 et seq.
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    As noted above, the amendments do not substantively alter the 
authentication document requirements, but rather provide an optional 
alternative method for signatories to sign authentication documents 
electronically. Although the requirements underlying the use of an 
electronic signature differ somewhat from those for use of a manual 
signature in connection with an authentication document (e.g., an 
initial electronic signature authentication document will be required 
to be retained for seven years), on balance, we expect the amendments 
to incrementally ease the burden associated with executing such a 
document. It is difficult to predict how many filers will take 
advantage of the alternative signing method; however, we expect a filer 
would utilize this optional method only if it determines that the 
burdens of this alternative method are less than existing methods. 
Given the incremental nature of the amendments and in order to avoid 
overestimating any potential reduction in paperwork burdens, we are not 
revising any burden and cost estimates in connection with these 
amendments.

IV. Economic Analysis

    The final amendments provide signatories with additional 
flexibility in connection with documents filed with the Commission, 
including electronic filings made on EDGAR, by permitting the use of 
electronic signatures in authentication documents. Due to technological 
advances that have enabled electronic signatures to become as credible 
as their manual, ``wet'' counterparts and the potential for efficiency 
gains, we believe providing such flexibility is justified. Below, we 
consider the benefits and costs, as well as the effects on efficiency, 
competition, and capital formation that we anticipate will result from 
the final amendments.\27\ We evaluate the economic effects of the 
amendments relative to a baseline which includes the current regulatory 
requirements applicable to filers and signatories, as discussed in 
Section I above, as well as current practices. These requirements apply 
to both electronic and paper filers. The vast majority of Commission 
filings must be made electronically.\28\ Based on information from 
2019, the Commission received approximately 644,000 electronic filings 
from approximately 131,000 filers. By contrast staff analysis of 
filings in EDGAR identified 4,881 scanned paper filings from 2,603 
filers in 2019.
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    \27\ Section 3(f) of the Exchange Act, Section 2(b) of the 
Securities Act, and Section 2(c) of the Investment Company Act state 
that when engaging in rulemaking that requires us to consider or 
determine whether an action is necessary or appropriate in (or, with 
respect to the Investment Company Act, consistent with) the public 
interest, we must consider, in addition to the protection of 
investors, whether the action will promote efficiency, competition, 
and capital formation. Additionally, Section 23(a)(2) of the 
Exchange Act requires us, when making rules or regulations under the 
Exchange Act, to consider, among other matters, the impact that any 
such rule or regulation would have on competition and states that 
the Commission shall not adopt any such rule or regulation which 
would impose a burden on competition that is not necessary or 
appropriate in furtherance of the Exchange Act.
    \28\ 17 CFR 230.101.
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    Developments in cryptography and computing have enabled the 
development of digital signatures that are at least as credible as 
manual signatures. Digital signatures available today can: (i) Assure 
users that signed documents have not been altered; (ii) identify the 
signatory; and (iii) make it

[[Page 78227]]

impossible for a signatory to deny signing the document.\29\ Moreover, 
digital signature systems can be deployed on a broad range of computing 
platforms,\30\ and are widely accessible at low cost.
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    \29\ See William Kuechler & Fritz H. Grupe, Digital Signatures: 
A Business View, 19(4) Info. Sys. Mgmt. 19 (2003).
    \30\ Id.
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    Technological developments have also increased the efficiency of 
electronic communication relative to reliance on the mail. Remote work, 
as opposed to work on a business's premises, has increased for 
management, professional, and related occupations.\31\ These changes 
have been facilitated by developments in technology and communications 
infrastructure,\32\ as a greater volume of business communication now 
occurs electronically, rather than through paper, workers in these 
occupations have adapted to electronic communications. Further, remote 
work has increased substantially in recent months due to the COVID-19 
pandemic. Survey evidence collected during the pandemic shows that a 
substantial proportion of the U.S. labor force now works from home full 
time.\33\ At the same time, measures related to COVID-19 have, at the 
margin, increased the time associated with printing and mailing, and in 
some cases have increased the risk of delay.\34\ In response to 
lengthier or less certain printing and mailing times, filers may incur 
additional costs by hastening internal processes to meet external 
deadlines.
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    \31\ See Rachel M. Krantz-Kent, Where did workers perform their 
jobs in the early 21st century?, U.S. Bureau of Lab. Stat.: Monthly 
Lab. Rev. (July 2019), available at: https://doi.org/10.21916/mlr.2019.16 (last accessed October 22, 2020).
    \32\ Id.
    \33\ See Erik Brynjolfsson et al., COVID-19 and remote work: an 
early look at US data (Nat'l Bureau of Economic Research, No. 
w27344, 2020). See also May Wong, Stanford Research Provides a 
Snapshot of a New Working-From-Home Economy (June 29, 2020), 
available at: https://news.stanford.edu/2020/06/29/snapshot-new-working-home-economy/ (last accessed Oct. 13, 2020).
    \34\ For example, The U.S. Postal Service announced that certain 
two-day and three-day service commitments were extended to three 
days and four days, respectively, and suspended services or service 
guarantees for international shipments. Private carriers similarly 
suspended guarantees. See e.g., USPS[supreg] Coronavirus Updates: 
Expected Delivery Changes, USPS: FAQ (Apr. 17, 2020) available at: 
https://faq.usps.com/s/article/USPS-Coronavirus-Updates-Expected-Delivery-Changes (last accessed Oct. 10, 2020).
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    We expect the amendments to Rule 302(b), and the related amendments 
to certain rules and forms under the Securities Act, the Exchange Act, 
and the Investment Company Act will result in cost savings for those 
filers whose signatories sign an authentication document by using an 
electronic signature. Filers who choose this option would no longer be 
required to have a signatory manually sign a signature page or other 
document and convey that document to the filer for each typed signature 
they provide in each filing that is made. Thus filers and signatories 
would not incur related costs of printing or mailing such a document in 
connection with each typed signature and may experience cost reductions 
to the extent that retaining electronic authentication documents is 
less costly than retaining manual authentication documents. It is 
difficult to quantify cost savings per filing as they would depend on 
the nature of the filing and the circumstances of the individual 
signatories.\35\ Further, cost savings per filer would depend on the 
number and nature of filings each filer must make.\36\ To the extent 
that the amendments make filers' compliance programs more efficient and 
less expensive, filers may be able to reallocate resources otherwise 
used for printing or mailing authentication documents to more 
productive uses. Filers may experience greater cost savings to the 
extent they choose to incorporate processes for electronic signatures 
in the design of their overall compliance programs and such processes 
are lower cost than their manual equivalents.
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    \35\ Analysis of electronic filers in EDGAR in 2019 demonstrates 
substantial variation in the number of signatories per filing. For 
example, we estimate 99.0% of 6,660 Form 10-K filings included more 
than one signatory in 2019, while only 1.6% of 14,884 Form 497 
filings included more than one signatory in 2019. Staff were able to 
identify approximately 105,000 electronic filings with multiple 
signatories in 2019 by searching for signature tags in all 
electronic filings. Although this method may fail to identify 
certain filings with multiple signatories that do not tag individual 
signatures, this sample serves to demonstrate the degree of 
variability in the number of signatories across form types.
    \36\ Analysis of electronic filers in EDGAR in 2019 demonstrates 
a high degree in variation in the number of filings per filer. Staff 
estimate that the median number of filings per filer across the full 
sample of filers was two, however, the 25 filers with the largest 
number of filings in 2019 each submitted more than 850 filings.
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    We do not expect the amendments to Rule 302(b) to impose 
substantial additional costs on filers because filers will be permitted 
to continue to use manually signed authentication documents and 
existing policies and procedures if they choose to do so. Because the 
electronic signing process for authentication documents would be 
optional, we expect that filers would avail themselves of this option 
only to the extent that the potential benefits justified any associated 
costs.
    Filers that choose to avail themselves of the ability to use 
electronic signatures in authentication documents may need to update 
their compliance systems to ensure that a signatory manually signs a 
document attesting that the signatory agrees that the use of an 
electronic signature in any authentication document constitutes the 
legal equivalent of such individual's manual signature, before first 
utilizing an electronic signature to sign an authentication document. 
Further, filers must retain this initial signature authentication 
document for a minimum period of seven years after the date of the most 
recent electronically signed authentication document, and must furnish 
a copy of it upon request to the Commission or its staff. However, we 
generally expect these one-time costs to be relatively low, and once 
such a filer has updated its systems, we do not believe these 
substantive requirements will result in additional on-going costs 
because producing and retaining authentication documents are existing 
requirements under Rule 302(b). Additionally, such filers may incur 
costs associated with compliance with the electronic signing process 
requirements prescribed in the EDGAR Filer Manual. These costs include 
initial costs related to identifying and acquiring software capable of 
producing electronic signatures that meet the updated process 
requirements and likely also include annual fees associated with 
ongoing use of electronic signature software.
    We do not expect the amendments to have meaningful effects on 
competition or capital formation. As noted above, the amendments may 
improve efficiency, to the extent that they permit filers to lower the 
costs associated with complying with the amended rules. The amendments 
could reduce the variable cost (cost per filing) associated with 
meeting Commission filing requirements. If meeting Commission filing 
requirements involves high fixed costs then this reduction in variable 
costs could reduce the average cost of filing for high-volume filers 
more than for low-volume filers. Similarly, a filer's printing and 
mailing costs under the baseline depend both on the number of 
signatures required for its filings and the need for mailing manual 
signature pages to a central location. Thus, filers that have a larger 
number of signatories, or have signatories that are more geographically 
dispersed, likely would experience greater cost savings than filers 
with fewer or less-dispersed signatories.
    Finally, we considered alternative ways of permitting the use of 
electronic

[[Page 78228]]

signatures in authentication documents. The Commission could have 
chosen not to adopt a requirement to create or retain an initial 
electronic signature authentication document. Such an alternative would 
have increased cost savings for filers, but could have undermined the 
evidentiary value of the authentication document. The Commission also 
considered longer or shorter retention periods for authentication 
documents. Longer (shorter) retention periods could increase (decrease) 
the costs associated with storing authentication documents, while 
potentially increasing (decreasing) the evidentiary benefits of such 
documents.

V. Statutory Authority

    The amendments contained in this release are being adopted under 
the authority in Sections 6, 7, 8, 10, and 19(a) of the Securities Act 
of 1933,\37\ Sections 3, 12, 13, 14, 15, 15B, 23, and 35A of the 
Securities Exchange Act of 1934,\38\ Section 319 of the Trust Indenture 
Act of 1939,\39\ and Sections 8, 30, 31, and 38 of the Investment 
Company Act of 1940.\40\
---------------------------------------------------------------------------

    \37\ 15 U.S.C. 77f, 77g, 77h, 77j, and 77s(a).
    \38\ 15 U.S.C. 78c, 78l, 78m, 78n, 78o, 78o-4, 78w, and 78ll.
    \39\ 15 U.S.C. 77sss.
    \40\ 15 U.S.C. 80a-8, 80a-29, 80a-30, and 80a-37.
---------------------------------------------------------------------------

List of Subjects

17 CFR Part 230

    Investment companies, Reporting and recordkeeping requirements, 
Securities.

17 CFR Part 232

    Incorporation by reference, Reporting and recordkeeping 
requirements, Securities.

17 CFR Part 240

    Brokers, Fraud, Reporting and recordkeeping requirements, 
Securities.

17 CFR Part 249

    Brokers, Reporting and recordkeeping requirements, Securities.

17 CFR Part 270

    Investment companies, Reporting and recordkeeping requirements, 
Securities.

Text of the Amendments

    In accordance with the foregoing, title 17, chapter II of the Code 
of Federal Regulations is amended as follows:

PART 230--GENERAL RULES AND REGULATIONS, SECURITIES ACT OF 1933

0
1. The authority citation for part 230 continues to read in part as 
follows:

    Authority: 15 U.S.C. 77b, 77b note, 77c, 77d, 77f, 77g, 77h, 
77j, 77r, 77s, 77z-3, 77sss, 78c, 78d, 78j, 78l, 78m, 78n, 78o, 78o-
7 note, 78t, 78w, 78ll(d), 78mm, 80a-8, 80a-24, 80a-28, 80a-29, 80a-
30, and 80a-37, and Pub. L. 112-106, sec. 201(a), sec. 401, 126 
Stat. 313 (2012), unless otherwise noted.
* * * * *
    Sections 230.400 to 230.499 issued under secs. 6, 8, 10, 19, 48 
Stat. 78, 79, 81, and 85, as amended (15 U.S.C. 77f, 77h, 77j, and 
77s).
* * * * *

0
2. Amend Sec.  230.402 by revising paragraph (e) to read as follows:


Sec.  230.402   Number of copies; binding; signatures.

* * * * *
* * * * *
    (e) Signatures. Where the Act or the rules thereunder, including 
paragraphs (a) and (c) of this section, require a document filed with 
or furnished to the Commission to be signed, such document shall be 
manually signed, or signed using either typed signatures or duplicated 
or facsimile versions of manual signatures. Where typed, duplicated, or 
facsimile signatures are used, each signatory to the filing shall 
manually or electronically sign a signature page or other document 
authenticating, acknowledging, or otherwise adopting his or her 
signature that appears in the filing (``authentication document''). 
Such authentication document shall be executed before or at the time 
the filing is made and shall be retained by the registrant for a period 
of five years. The requirements set forth in Sec.  232.302(b) must be 
met with regards to the use of an electronically signed authentication 
document pursuant to this paragraph (e). Upon request, the registrant 
shall furnish to the Commission or its staff a copy of any or all 
documents retained pursuant to this section.

0
3. Amend Sec.  230.471 by revising paragraph (b) to read as follows:


Sec.  230.471   Signatures to amendments.

* * * * *
    (b) Where the Act or the rules thereunder require a document filed 
with or furnished to the Commission to be signed, such document shall 
be manually signed, or signed using either typed signatures or 
duplicated or facsimile versions of manual signatures. Where typed, 
duplicated, or facsimile signatures are used, each signatory to the 
filing shall manually or electronically sign a signature page or other 
document authenticating, acknowledging, or otherwise adopting his or 
her signature that appears in the filing (``authentication document''). 
Such authentication document shall be executed before or at the time 
the filing is made and shall be retained by the registrant for a period 
of five years. The requirements set forth in Sec.  232.302(b) must be 
met with regards to the use of an electronically signed authentication 
document pursuant to this paragraph (b). Upon request, the registrant 
shall furnish to the Commission or its staff a copy of any or all 
documents retained pursuant to this section.

PART 232 REGULATION S-T--GENERAL RULES AND REGULATIONS FOR 
ELECTRONIC FILINGS

0
4. The authority citation for part 232 continues to read as follows:

    Authority: 15 U.S.C. 77c, 77f, 77g, 77h, 77j, 77s(a), 77z-3, 
77sss(a), 78c(b), 78l, 78m, 78n, 78o(d), 78w(a), 78ll, 80a-6(c), 
80a-8, 80a-29, 80a-30, 80a-37, 7201 et seq.; and 18 U.S.C. 1350, 
unless otherwise noted.
    Section 232.302 is also issued under secs. 3(a) and 302, Pub. L. 
No. 107-204, 116 Stat. 745.

0
5. Revise Sec.  232.301 to read as follows:


Sec.  232.301   EDGAR Filer Manual.

    Filers must prepare electronic filings in the manner prescribed by 
the EDGAR Filer Manual, promulgated by the Commission, which sets forth 
the technical formatting requirements for electronic submissions. The 
requirements for becoming an EDGAR Filer and updating company data are 
set forth in the updated EDGAR Filer Manual, Volume I: ``General 
Information,'' Version 35 (January 2020). The requirements for filing 
on EDGAR are set forth in the updated EDGAR Filer Manual, Volume II: 
``EDGAR Filing,'' Version 55 (November 2020). All of these provisions 
have been incorporated by reference into the Code of Federal 
Regulations, which action was approved by the Director of the Federal 
Register in accordance with 5 U.S.C. 552(a) and 1 CFR part 51. You must 
comply with these requirements in order for documents to be timely 
received and accepted. The EDGAR Filer Manual is available at https://www.sec.gov/info/edgar/edmanuals.htm. The EDGAR Filer Manual is also 
available for website viewing and printing in the Commission's Public 
Reference Room, 100 F Street NE, Washington, DC 20549, on official 
business days between the hours of 10 a.m. and 3 p.m. You can also 
inspect the document at the National Archives and Records 
Administration (NARA). For information on the availability of this 
material at NARA, email fedreg.legal@nara.gov, or go to: https://

[[Page 78229]]

www.archives.gov/federal-register/cfr/ibrlocations.html.

0
6. Amend Sec.  232.302 by revising paragraphs (a) and (b) to read as 
follows:


Sec.  232.302   Signatures.

    (a) Required signatures to, or within, any electronic submission 
(including, without limitation, signatories within the certifications 
required by Sec. Sec.  240.13a-14, 240.15d-14, and 270.30a-2 of this 
chapter) must be in typed form rather than manual format. Signatures in 
an HTML document that are not required may, but are not required to, be 
presented in an HTML graphic or image file within the electronic 
filing, in compliance with the formatting requirements of the EDGAR 
Filer Manual. When used in connection with an electronic filing, the 
term ``signature'' means a computer representation of any symbol or 
series of symbols comprising a name executed, adopted, or authorized as 
a signature. Signatures are not required in unofficial PDF copies 
submitted in accordance with Sec.  232.104.
    (b)(1) Each signatory to an electronic filing (including, without 
limitation, each signatory to the certifications required by Sec. Sec.  
240.13a-14, 240.15d-14 and 270.30a-2 of this chapter) shall manually or 
electronically sign a signature page or other document authenticating, 
acknowledging, or otherwise adopting his or her signature that appears 
in typed form within the electronic filing (``authentication 
document''). Such authentication document shall be executed before or 
at the time the electronic filing is made and shall be retained by the 
filer for a period of five years. An electronically signed 
authentication document pursuant to this paragraph (b)(1) must meet the 
requirements set forth in the EDGAR Filer Manual.
    (2) Before a signatory may electronically sign an authentication 
document pursuant to paragraph (b)(1) of this section, such signatory 
must manually sign a document attesting that, when using electronic 
signatures for purposes of paragraph (b)(1) of this section, the 
signatory agrees that the use of such electronic signature constitutes 
the legal equivalent of such individual's manual signature for purposes 
of authenticating the signature to any filing for which it is provided. 
An electronic filer must retain this document for as long as the 
signatory may use an electronic signature to satisfy the requirements 
of paragraph (b)(1) of this section and for a minimum period of seven 
years after the date of the most recent electronically signed 
authentication document.
    (3) Upon request, an electronic filer shall furnish to the 
Commission or its staff a copy of any or all documents retained 
pursuant to this section. A manually signed document under paragraph 
(b)(1) or (2) of this section, including an initial electronic 
signature authentication document or a manually signed authentication 
document, may be retained and stored via electronic means.
* * * * *

PART 240--GENERAL RULES AND REGULATIONS, SECURITIES EXCHANGE ACT OF 
1934

0
7. The authority citation for part 240 continues to read, in part, as 
follows:

    Authority:  15 U.S.C. 77c, 77d, 77g, 77j, 77s, 77z-2, 77z-3, 
77eee, 77ggg, 77nnn, 77sss, 77ttt, 78c, 78c-3, 78c-5, 78d, 78e, 78f, 
78g, 78i, 78j, 78j-1, 78k, 78k-1, 78l, 78m, 78n, 78n-1, 78o, 78o-4, 
78o-10, 78p, 78q, 78q-1, 78s, 78u-5, 78w, 78x, 78dd, 78ll, 78mm, 
80a-20, 80a-23, 80a-29, 80a-37, 80b-3, 80b-4, 80b-11, and 7201 et 
seq., and 8302; 7 U.S.C. 2(c)(2)(E); 12 U.S.C. 5221(e)(3); 18 U.S.C. 
1350; Pub. L. 111-203, 939A, 124 Stat. 1376 (2010); and Pub. L. 112-
106, secs. 503 and 602, 126 Stat. 326 (2012), unless otherwise 
noted.
* * * * *
    Sections 240.12b-1 to 240.12b-36 also issued under secs. 3, 12, 
13, 15, 48 Stat. 892, as amended, 894, 895, as amended; 15 U.S.C. 
78c, 78l, 78m, and 78o.
* * * * *
    Section 240.14d-1 is also issued under 15 U.S.C. 77g, 77j, 
77s(a), 77ttt(a), 80a-37.
* * * * *

0
8. Amend Sec.  240.12b-11 by revising paragraph (d) to read as follows:


Sec.  240.12b-11   Number of copies; signatures; binding.

* * * * *
    (d) Signatures. Where the Act or the rules, forms, reports or 
schedules thereunder, including paragraph (b) of this section, require 
a document filed with or furnished to the Commission to be signed, such 
document shall be manually signed, or signed using either typed 
signatures or duplicated or facsimile versions of manual signatures. 
Where typed, duplicated, or facsimile signatures are used, each 
signatory to the filing shall manually or electronically sign a 
signature page or other document authenticating, acknowledging, or 
otherwise adopting his or her signature that appears in the filing 
(``authentication document''). Such authentication document shall be 
executed before or at the time the filing is made and shall be retained 
by the filer for a period of five years. The requirements set forth in 
Sec.  232.302(b) must be met with regards to the use of an 
electronically signed authentication document pursuant to this 
paragraph (d). Upon request, the filer shall furnish to the Commission 
or its staff a copy of any or all documents retained pursuant to this 
section.

0
9. Amend Sec.  240.14d-1 by revising paragraph (h) to read as follows:


Sec.  240.14d-1  Scope of and definitions applicable to Regulations 14D 
and 14E.

* * * * *
    (h) Signatures. Where the Act or the rules, forms, reports or 
schedules thereunder require a document filed with or furnished to the 
Commission to be signed, such document shall be manually signed, or 
signed using either typed signatures or duplicated or facsimile 
versions of manual signatures. Where typed, duplicated, or facsimile 
signatures are used, each signatory to the filing shall manually or 
electronically sign a signature page or other document authenticating, 
acknowledging, or otherwise adopting his or her signature that appears 
in the filing (``authentication document''). Such authentication 
document shall be executed before or at the time the filing is made and 
shall be retained by the filer for a period of five years. The 
requirements set forth in Sec.  232.302(b) must be met with regards to 
the use of an electronically signed authentication document pursuant to 
this paragraph (h). Upon request, the filer shall furnish to the 
Commission or its staff a copy of any or all documents retained 
pursuant to this section.

0
10. Amend Sec.  240.15Fb1-1 by revising paragraphs (b) and (d) to read 
as follows:


Sec.  240.15Fb1-1   Signatures.

* * * * *
    (b) Each signatory to an electronic filing (including, without 
limitation, each signatory to the forms and certifications required by 
Sec. Sec.  240.15Fb2-1, 240.15Fb2-4, and 240.15Fb6-2) shall manually or 
electronically sign a signature page or other document authenticating, 
acknowledging, or otherwise adopting his or her signature that appears 
in typed form within the electronic filing (``authentication 
document''). Such authentication document shall be executed before or 
at the time the electronic filing is made. The requirements set forth 
in Sec.  232.302(b) must be met with regards to the use of an 
electronically signed authentication document pursuant to this 
paragraph (b). Upon request, the security-based swap dealer or major 
security-based swap participant shall furnish to the Commission or its 
staff a

[[Page 78230]]

copy of any or all documents retained pursuant to this paragraph (b).
* * * * *
    (d) Each manually or electronically signed signature page or other 
document authenticating, acknowledging, or otherwise adopting his or 
her signature that appears in typed form within the electronic filing 
(``authentication document'')--
    (1) On Schedule F to Form SBSE (Sec.  249.1600 of this chapter), 
SBSE-A (Sec.  249.1600a of this chapter), or SBSE-BD (Sec.  249.1600b 
of this chapter), as appropriate, shall be retained by the filer until 
at least three years after the form or certification has been replaced 
or is no longer effective;
    (2) On Form SBSE-C (Sec.  249.1600c of this chapter) shall be 
retained by the filer until at least three years after the Form was 
filed with the Commission.

0
11. Amend Sec.  240.16a-3 by revising paragraph (i) to read as follows:


Sec.  240.16a-3   Reporting transactions and holdings.

* * * * *
    (i) Signatures. Where Section 16 of the Act, or the rules or forms 
thereunder, require a document filed with or furnished to the 
Commission to be signed, such document shall be manually signed, or 
signed using either typed signatures or duplicated or facsimile 
versions of manual signatures. Where typed, duplicated, or facsimile 
signatures are used, each signatory to the filing shall manually or 
electronically sign a signature page or other document authenticating, 
acknowledging, or otherwise adopting his or her signature that appears 
in the filing (``authentication document''). Such authentication 
document shall be executed before or at the time the filing is made and 
shall be retained by the filer for a period of five years. The 
requirements set forth in Sec.  232.302(b) must be met with regards to 
the use of an electronically signed authentication document pursuant to 
this paragraph (i). Upon request, the filer shall furnish to the 
Commission or its staff a copy of any or all documents retained 
pursuant to this section.
* * * * *

PART 249--FORMS, SECURITIES EXCHANGE ACT OF 1934

0
12. The general authority citation for part 249 continues to read as 
follows:

    Authority:  15 U.S.C. 78a et seq. and 7201 et seq.; 12 U.S.C. 
5461 et seq.; 18 U.S.C. 1350; Sec. 953(b), Pub. L. 111-203, 124 
Stat. 1904; Sec. 102(a)(3), Pub. L. 112-106, 126 Stat. 309 (2012); 
Sec. 107, Pub. L. 112-106, 126 Stat. 313 (2012), and Sec. 72001, 
Pub. L. 114-94, 129 Stat. 1312 (2015), unless otherwise noted.
* * * * *

0
13. Amend Form CB (referenced in Sec.  249.480) by amending General 
Instruction II.B to read as follows:

    Note:  The text of Form CB does not, and this amendment will 
not, appear in the Code of Federal Regulations.

United States

Securities and Exchange Commission

Washington, DC 20549

Form CB

* * * * *
    B. When submitting the Form CB in electronic format, the persons 
specified in Part IV must provide signatures in accordance with 
Regulation S-T Rule 302 (17 CFR 232.302). When submitting the Form CB 
in paper, the persons specified in Part IV must sign the original and 
at least one copy of the Form and any amendments. You must conform any 
unsigned copies. The specified persons may provide typed or facsimile 
signatures in accordance with Securities Act Rule 402(e) (17 CFR 
230.402(e)) or Exchange Act Rule 12b-11(d) (17 CFR 240.12b-11(d)) as 
long as the filer retains copies of signatures manually or 
electronically signed by each of the specified persons for five years. 
The requirements set forth in Regulation S-T Rule 302(b) (17 CFR 
232.302(b)) must be met with regards to the use of an electronically 
signed signature page.
* * * * *

PART 270--RULES AND REGULATIONS, INVESTMENT COMPANY ACT OF 1940

0
14. The authority citation for part 270 continues to read, in part, as 
follows:

    Authority: 15 U.S.C. 80a-1 et seq., 80a-34(d), 80a-37, 80a-39, 
and Pub. L. 111-203, sec. 939A, 124 Stat. 1376 (2010), unless 
otherwise noted.
* * * * *
    Section 270.8b-11 is also issued under 15 U.S.C. 77s, 80a-8, and 
80a-37.
* * * * *

0
15. Amend Sec.  270.8b-11 by revising paragraph (e) to read as follows:


Sec.  270.8b-11  Number of copies; signatures; binding.

* * * * *
    (e) Signatures. Where the Act or the rules thereunder, including 
paragraph (c) of this section, require a document filed with or 
furnished to the Commission to be signed, the document should be 
manually signed, or signed using either typed signatures or duplicated 
or facsimile versions of manual signatures. When typed, duplicated, or 
facsimile signatures are used, each signatory to the filing shall 
manually or electronically sign a signature page or other document 
authenticating, acknowledging, or otherwise adopting his or her 
signature that appears in the filing (``authentication document''). 
Execute each such authentication document before or at the time the 
filing is made and retain for a period of five years. The requirements 
set forth in Sec.  232.302(b) must be met with regards to the use of an 
electronically signed authentication document pursuant to this 
paragraph (e). Upon request, the registrant shall furnish to the 
Commission or its staff a copy of any or all documents retained 
pursuant to this section.

    By the Commission.

    Dated: November 17, 2020.
Vanessa A. Countryman,
Secretary.
[FR Doc. 2020-26166 Filed 12-3-20; 8:45 am]
BILLING CODE 8011-01-P


