Covid-19: FCA sets out its expectations for wet-ink signatures

The FCA issued a statement today setting out its expectations of firms when dealing with the need for ‘wet-ink’ signatures in light of Covid-19 restrictions. 

Agreements

The FCA’s rules do not explicitly require wet-ink signatures in agreements, nor do they prevent firms from using electronic signatures in agreements. The validity of electronic signatures is a matter of law and the FCA expects firms to consider the legal position themselves. 

Firms must also consider any related requirements set out in the FCA’s Principles for Businesses and general rules. For example, the FCA says:

• 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 clients sign documents electronically, this does not make it more difficult for them to understand what they are agreeing to. 

Forms

The FCA recently stated that it would accept electronic signatures for fund-related applications and on all applications from mutual societies.

It confirms that firms may use electronic signatures for all interactions with the FCA.