The FCA stated that its rules "do not explicitly require wet-ink signatures in agreements, nor do they prevent firms from using electronic signatures in agreements".
The statement was part of a clarification on its expectations for firms when dealing with 'wet-ink' signatures (i.e. signing a document by hand using a pen) in light of Covid-19 restrictions.
The FCA said that the validity of electronic signatures is a matter of law and urged firms to "consider any related requirements set out in our Principles for Businesses and general rules".
For example:
- Firms should consider Principles 2, 3 and 6 and review the risks and harms of using electronic signatures, and take appropriate steps to minimise those.
- Firms should consider the client’s best interests rule (COBS 2.1.1R) and the fair, clear and not misleading rule (COBS 4.2.1R) to ensure that, when a client signs a document electronically, this does not make it more difficult for the client to understand what they are agreeing to.
The FCA recently stated that it would accept electronic signatures for fund-related applications and on all applications from mutual societies.
Its statement today confirms that firms may use electronic signatures for all interactions with the FCA.
