https://www.csoonline.com/article/3391587/finra-rule-4512-u-s-sec-approves-electronic-signatures.html
By Michael P. Magrath
Contributor
CSO
May 06, 2019
As banks and other financial institutions continue to modernize their business
processes to reduce operating expenses and enhance the customer experience as
part of an overarching digital transformation, outdated regulations have caused
some approaches to hit a wall.
Updating the FINRA Rule 4512 for e-signatures
In the brokerage industry, Financial Industry Regulatory Authority (FINRA) Rule
4512(a)(3) (Customer Account Information) is an example. As it pertains to
discretionary accounts, it requires member firms to obtain the “wet” signature
of each named, natural person authorized to exercise discretion in an account.
Members complained that this antiquated requirement raises operational costs
without providing any meaningful security protections for investors. Further,
the competitive playing field has been tipped in favor of investment advisers
who have been able to capture customers’ signatures electronically for some
time, likely as far back as the enactment of the Uniform Electronic
Transactions Act (UETA) and the Electronic Signatures in Global and National
Commerce Act (ESIGN Act). (Disclosure: My employer, OneSpan, provides
electronic signature solutions and I serve on the Board of Directors of the
Electronic Signature and Records Association.)
[...]
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