On March 26, 2019, the Investment Industry Regulatory Organization of Canada (“IIROC”) issued Guidance Note 19-0051 – E-Signature (the “Guidance Note”). The Guidance Note is the first of IIROC’s concrete steps ensuing from its extensive, multi-phased consultation of investment firms that notably resulted in the issue of a joint IIROC and Accenture report “Enabling the Evolution of Advice in Canada”.
The Guidance Note clarifies that in instances where IIROC’s member rules require investment firms or their representatives to obtain signatures from certain parties, including their clients, to evidence the execution of agreements, consents or acknowledgements of receipt of prescribed notification (such as relationship disclosure or the sharing of premises), IIROC members can accept e-signatures provided that certain conditions are met.
E-signatures that IIROC dealers may use include both “electronic signatures” (e.g. a signature on a scanned image, typed on an electronic document or digitally captured on a phone or a tablet) and “digital signatures”, which include a certificate of authority to identify both the party requesting a signature and the party providing one.
The Guidance Notes permits IIROC dealers to accept e-signatures provided that (1) they have appropriate policies and procedures (“P&Ps”) in place, (2) they act in good faith in applying those P&Ps in a consistent manner and do not delay account transfers, and (3) their P&Ps and practices do not infringe applicable laws such as the Uniform Electronic Commerce Act (Canada) and the Personal Information Protection and Electronic Documents Act (Canada), and other applicable legislation such as requiring the use of a “wet signature” for powers of attorney, wills or trusts.
One of the key changes introduced by the Guidance Note is to remove the requirement previously in IIROC MR0177 that required dealer members to obtain a legal opinion as to compliance with legislative requirements for digital signature technology.