Financial advisers on the clearing provider's platform will be able to use the compliant Signix technology to replace the time-consuming work of sending, receiving, fact-checking and filing paper documents, according to Signix executive vice president Pem Guerry.
The benefits of the Pershing addition include fewer errors and lower storage and copying costs, Mr. Guerry said. The broker-dealer industry has been behind in adopting the technology compared to other industries because clearing firms have been slow to accept electronically signed documents, he said.
“What is important about this deal with Pershing is that signing online provides many benefits versus signing on paper,” Mr. Guerry said.
Michael Nesspor, managing director of Pershing, said in a prepared statement that Pershing's legal and compliance teams reviewed “top e-signature vendors” before choosing Signix.
E-signatures are now gaining wider popularity in financial services, said Robert Powell, vice president of sales and marketing for electronic forms provider Laser App Software Inc.
“In the last year and a half, we've seen more excitement and adoption around e-signatures than I've seen in the previous eight or nine years,” Mr. Powell said, naming Signix along with DocuSign Inc., Adobe EchoSign and Silanis as the four primary e-signature vendors in the financial services space.
The U.S. government made electronic signatures legal with the Esign Act back in 2000, making e-signatures as legal as handwritten ones.
While the SigNix software is embedded in NetX360, Pershing's platform will accept other e-signature vendors' documents from advisers, Mr. Guerry said.
The differentiator for his firm's software is that Signix uses international cryptography standards to embed digital signatures permanently into documents, he said.
“Instead of applying an image to the top of the document, which is what an e-signature is, we embed the math of cryptography into the signature field, which becomes a part of the document. It can't be removed or altered without it being immediately evident that it was altered.”
However, DocuSign's chief legal officer, Ken Moyle, said Signix's differentiation claims are not valid.
“Essentially, the technology they're talking about is called public key infrastructure, and it's a way of tamper-proofing documents such as PDFs out in the wild. Any e-signature provider worth their salt uses a digital seal on their documents, and DocuSign certainly does that,” Mr. Moyle said.