Members of the North American Securities Administrators Association ("NASAA") voted to implement a Statement of Policy regarding the use of electronic subscription agreement and offering documents, and the execution of all such documents with electronic signatures. The Statement of Policy establishes a set of guidelines and procedural requirements for any issuer that wants to electronically deliver subscription agreement and offering documents, including requiring that investors and prospective investors consent to the delivery of all such documents by electronic means, and that the issuer maintain records of the electronic delivery of such documents. The Statement of Policy also approves the use of electronic signatures by an issuer, provided that an investor or prospective investor expressly consents to the use of electronic signatures and that such electronic signatures (i) are obtained in compliance with the Electronic Signatures in Global and National Commerce Act ("Federal E-Sign"), and (ii) implement authentication, security and retention policies.
Commentary / Steven Lofchie
NASAA should be commended for moving towards a uniform set of rules relating to electronic delivery. That said, the notion that today's investors must give specific consent for the electronic delivery of documents is just so twentieth century (and not even late twentieth century). At a minimum, investors should be deemed to have given consent if they respond to an electronic communication (and they could still have the ability to opt out). By acknowledging that electronic communications are, in fact, the standard means by which market participants communicate, regulators would save everyone money and time, and perhaps even help the environment.
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