SMSF trustees seeking to rely on amendments to legislation to allow the use of electronic signatures to approve fund documents should be aware their use will be limited.
Smarter SMSF chief executive Aaron Dunn noted temporary measures introduced by the federal government in 2020 to allow the electronic or digital signing of trust documents and financial statements, and extended to March 2022, after which they will become permanent measures, would only apply to trust deeds and financial statements.
“It’s a really important thing we need to remember about the application of the Electronic Transactions Act and what it says in terms of being able to use digital signing and that is the Superannuation Industry (Supervision) (SIS) Act and SIS Regulations are excluded,” Dunn said.
“So that means that where it is prescribed within the SIS Regulations to physically require a written document, then it must be done in wet ink.
“What we saw in July last year was to recognise what was going on with COVID and getting clients to sign off financial statements to meet their obligations and so the government put an exception to the exclusion of the Electronic Transactions Act.
“In essence, this allowed for the digital signing by trustees of the financial statements, but when we look at a broad range of other things, we still find requirements for written signatures for the holding of collectables, written plans for in-house assets, auditor requests, trustee declarations and investment strategies.”
According to Dunn plans released by the government in October to allow for the ongoing use of electronic or digital signatures on trust documents and financial statements are part of a wider government program to modernise its record-keeping.
“We have now seen the legislation introduced into parliament for the permanent measures. So those permanent measures – once passed – will kick off when those temporary measures finish next year and that will become a permanent adjustment to section 127 [of the Corporations Act].
He cautioned trustees to remember state-based rules may differ around the use of electronic or digital signatures and unless emergency legislation applied, any documents that required witnessing still had to be signed in person.''