The Investment Dealers Association of Canada will now permit the use of electronic signatures where a signature is required with respect to agreements, contracts or transactions.

The new policy applies between brokerage firms and their clients, registrants, the IDA, other members and any other person or company where a signature is required to be executed.

Electronic commerce legislation in force in a number of jurisdictions now clarifies that electronic signatures are legally valid in those jurisdictions. The commonly accepted legal definition of “executed” and “signature” all suggest that there is more than one method of signing a document. Each jurisdiction has similar requirements. However, IDA members are advised to refer to the applicable provincial legislation in order to ensure that they satisfy the requirements.

If no electronic commerce legislation exists in a particular jurisdiction, electronic signatures would not be legally valid in that jurisdiction. The use by the member of electronic signatures is contingent upon the member’s technological capabilities. Technological issues will require, among other things, that the capabilities of the technology guarantee non-repudiation, which entails the inability of the signer to repudiate his or her signature on or association with the document. However, the provincial legislation does not specify, at the present time, the digital signature technology that must be applied.

Firms must also keep in mind that a consent is required prior to the use of an electronic signature. While the legislation does not define the method of consent, it does provide for implied consent.

The IDA will require its members to obtain a reliable legal opinion that confirms that their digital signature technology and system satisfies the legislative requirements in the jurisdictions in which it is intended to be applied. Firms may supply their own legal opinion or one from a certification authority.