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E-signing protocols needed

Electronic signature protocols

The ATO has confirmed trustees will have to ensure proper protocols are followed when using electronic signatures to approve SMSF financial statements.

An amendment to the Electronic Transactions Act now allows an electronic signature to be used when endorsing items such as SMSF financial statements, with the ATO stipulating certain specific protocols must be followed for this type of approval to be considered legitimate.

Speaking at the recent Self-managed Independent Superannuation Funds Association SMSF Virtual Forum, ATO risk and strategy director Kellie Grant said: “We would recommend that when signing those documents that the actual trustee uses a secure signature [such as] one provided by a third-party document [provider], for example, like DocuSign.”

Further, Grant advised trustees to ensure proper security measures were present if they wanted to transition away from wet signature processes.

“They [should involve] a password or something that ensures the trustee can only access that particular document and sign that document themselves so we can be assured as to who actually signed the document,” she said.

“So as long as it [satisfies] those sorts of requirements, we are more than happy to receive documents like that signed digitally.”

She confirmed the ability to approve financial statements with an electronic signature is a permanent change to the legislation, but warned trustees to take additional precautions when using digital signatures to execute items such as trust deeds.

To this end, she noted it would be prudent for individuals using this method to sign off the SMSF trust deed to keep a record of the law they relied on at the time allowing them to use an electronic signature.

With regard to a fund’s investment strategy, she said trustees need not bother with any of the aforementioned protocols.

“There is nothing in the law that says you need to sign the investment strategy. Obviously you should in order to demonstrate that you took into account the various factors mentioned in the section,” she said.

“But that is clearly something too that could be digitally signed.”

Currently measures allowing trust deeds to be approved via an electronic signature are valid until March 2021.

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