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FINRA Rule 4512: U.S. SEC approves electronic signatures
From: InfoSec News <alerts () infosecnews org>
Date: Tue, 7 May 2019 09:44:11 +0000 (UTC)
https://www.csoonline.com/article/3391587/finra-rule-4512-u-s-sec-approves-electronic-signatures.html By Michael P. Magrath Contributor CSO May 06, 2019As 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to reduce operating expenses and enhance the customer experience as part of an overarching digital transformation, outdated regulations have caused some approaches to hit a wall.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-signaturesIn 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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