to the State legislatures by the National Conference of
Commissioners on Uniform State Laws; or
(B) specifies the alternative procedures or re-
quirements for the use or acceptance of electronic
records or electronic signatures to establish the legal
effect, validity, or enforceability of contracts or agree-
ments;
(2) is enacted or adopted within 4 years after the
date of enactment of this Act; and
(3) makes specific reference to the provisions of
section 101.
(b) LIMITATIONS
ON ALTERATION
OR SUPERSES-
SION.—A State statute, regulation, or other rule of law (in-
cluding an insurance statute, regulation, or other rule of
law), regardless of its date of enactment or adoption, that
modifies, limits, or supersedes section 101 shall not be effec-
tive to the extent that such statute, regulation, or rule—
(1) discriminates in favor of or against a spe-
cific technology, method, or technique of creating,
storing, generating, receiving, communicating, or au-
thenticating electronic records or electronic signa-
tures;
(2) discriminates in favor of or against a spe-
cific type or size of entity engaged in the business of
facilitating the use of electronic records or electronic
signatures;
(3) is based on procedures or requirements that
are not specific or that are not publicly available; or
(4) is otherwise inconsistent with the provisions
of section 101.
(c) ACTIONS TO ENJOIN.—Whenever it shall appear
to the Secretary of Commerce that a State has enacted or
adopted a statute, regulation, or other rule of law that is
prohibited by subsection (b), the Secretary may bring an
action to enjoin the enforcement of such statute, regulation,
or rule, and upon a proper showing a permanent or tem-
porary injunction or restraining order shall be granted
without bond.
SEC. 103. SPECIFIC EXCLUSIONS.
The provisions of section 101 shall not apply to—
(1) a statute, regulation, or other rule of law
governing the creation and execution of wills, codicils,
or testamentary trusts; or
(2) a statute, regulation, or other rule of law
governing adoption, divorce, or other matters of fam-
ily law.
SEC. 104. DEFINITIONS.
For purposes of this title:
(1) ELECTRONIC RECORD.—The term ‘‘electronic
record’’ means a writing, document, or other record
created, stored, generated, received, or communicated
by electronic means.
(2) ELECTRONIC SIGNATURE.—The term ‘‘elec-
tronic signature’’ means information or data in elec-
tronic form, attached to or logically associated with
an electronic record by a person or an electronic
agent, that is intended by a party to signify agree-
ment to a contract or agreement.
(3) ELECTRONIC.—The term ‘‘electronic’’ means
of or relating to technology having electrical, digital,
magnetic, optical, electromagnetic, or similar capa-
bilities regardless of medium.
(4) ELECTRONIC AGENT.—The term ‘‘electronic
agent’’ means a computer program or an electronic or
other automated means used independently to initiate
an action or respond to electronic records in whole or
in part without review by an individual at the time
of the action or response.
TITLE 
II—DEVELOPMENT 
AND
ADOPTION 
OF 
ELECTRONIC
SIGNATURE PRODUCTS AND
SERVICES
SEC. 201. TREATMENT OF ELECTRONIC SIGNATURES IN
INTERSTATE AND FOREIGN COMMERCE.
(a) INQUIRY REGARDING IMPEDIMENTS
TO COM-
MERCE.—
(1) INQUIRIES REQUIRED.—Within 90 days after
the date of the enactment of this Act, and annually
thereafter, the Secretary of Commerce, acting through
the Assistant Secretary for Communications and In-
formation, shall complete an inquiry to—
(A) identify any domestic and foreign im-
pediments to commerce in electronic signature
products and services and the manners in which
and extent to which such impediments inhibit
the development of interstate and foreign com-
merce;
(B) identify constraints imposed by foreign
nations or international organizations that con-
stitute barriers to providers of electronic signa-
ture products or services; and
(C) identify the degree to which other na-
tions and international organizations are com-
plying with the principles in subsection (b)(2).
(2) SUBMISSION.—The Secretary shall submit a
report to the Congress regarding the results of each
such inquiry within 90 days after the conclusion of
such inquiry.
(b) PROMOTION OF ELECTRONIC SIGNATURES.—
(1) REQUIRED ACTIONS.—The Secretary of Com-
merce, acting through the Assistant Secretary for
Communications and Information, shall promote the
acceptance and use, on an international basis, of elec-
tronic signatures in accordance with the principles
specified in paragraph (2) and in a manner con-
sistent with section 101 of this Act. The Secretary of
Commerce shall take all actions necessary in a man-
ner consistent with such principles to eliminate or re-
duce, to the maximum extent possible, the impedi-
ments to commerce in electronic signatures, including
those identified in the inquiries under subsection (a)
for the purpose of facilitating the development of
interstate and foreign commerce.
(2) PRINCIPLES.—The principles specified in
this paragraph are the following:
(A) Free markets and self-regulation, rather
than government standard-setting or rules,
should govern the development and use of elec-
tronic records and electronic signatures.
(B) 
Neutrality 
and 
nondiscrimination
should be observed among providers of and tech-
nologies for electronic records and electronic sig-
natures.
(C) Parties to a transaction should be per-
mitted to establish requirements regarding the
use of electronic records and electronic signatures
acceptable to such parties.
(D) Parties to a transaction—
(i) should be permitted to determine
the appropriate authentication technologies
and implementation models for their trans-
actions, with assurance that those tech-
nologies and implementation models will be
recognized and enforced; and
(ii) should have the opportunity to
prove in court or other proceedings that
their authentication approaches and their
transactions are valid.
(E) Electronic records and electronic signa-
tures in a form acceptable to the parties should
not be denied legal effect, validity, or enforce-
ability on the ground that they are not in writ-
ing.
(F) De jure or de facto imposition of stand-
ards on private industry through foreign adop-
tion of regulations or policies with respect to
electronic records and electronic signatures
should be avoided.
(G) Paper-based obstacles to electronic
transactions should be removed.
(c) FOLLOWUP STUDY.—Within 5 years after the date
of enactment of this Act, the Secretary of Commerce, acting
through the Assistant Secretary for Communications and
Information, shall conduct an inquiry regarding any State
statutes, regulations, or other rules of law enacted or adopt-
ed after such date of enactment pursuant to section 102(a),
and the extent to which such statutes, regulations, and rules
comply with section 102(b). The Secretary shall submit a
report to the Congress regarding the results of such inquiry
by the conclusion of such 5-year period and such report
shall identify any actions taken by the Secretary pursuant
to section 102(c) and subsection (b) of this section.
(d) CONSULTATION.—In conducting the activities re-
quired by this section, the Secretary shall consult with users
and providers of electronic signature products and services
and other interested persons.
(e) PRIVACY.—Nothing in this section shall be con-
strued to require the Secretary or the Assistant Secretary
to take any action that would adversely affect the privacy
of consumers.
(f) DEFINITIONS.—As used in this section, the terms
‘‘electronic record’’ and ‘‘electronic signature’’ have the
meanings provided in section 104 of the Electronic Signa-
tures in Global and National Commerce Act.
TITLE III—USE OF ELECTRONIC
RECORDS AND SIGNATURES
UNDER FEDERAL SECURITIES
LAW
SEC. 301. GENERAL VALIDITY OF ELECTRONIC RECORDS
AND SIGNATURES.
Section 3 of the Securities Exchange Act of 1934 (15
U.S.C. 78c) is amended by adding at the end the following
new subsection:
‘‘(h) REFERENCES TO WRITTEN RECORDS AND SIGNA-
TURES.—
‘‘(1) 
GENERAL
VALIDITY
OF
ELECTRONIC
RECORDS
AND
SIGNATURES.—Except as otherwise
provided in this subsection—
‘‘(A) if a contract, agreement, or record (as
defined in subsection (a)(37)) is required by the
securities laws or any rule or regulation there-
under (including a rule or regulation of a self-
regulatory organization), and is required by
other Federal or State statute, regulation, or
other rule of law to be in writing, the legal effect,
validity, or enforceability of such contract, agree-
ment, or record shall not be denied on the ground
that the contract, agreement, or record is not in
writing if the contract, agreement, or record is
an electronic record;
‘‘(B) if a contract, agreement, or record is
required by the securities laws or any rule or
regulation thereunder (including a rule or regu-
lation of a self-regulatory organization), and is
required by other Federal or State statute, regu-
lation, or other rule of law to be signed, the legal
effect, validity, or enforceability of such contract,
agreement, or record shall not be denied on the
ground that such contract, agreement, or record
is not signed or is not affirmed by a signature
if the contract, agreement, or record is signed or
affirmed by an electronic signature; and
‘‘(C) if a broker, dealer, transfer agent, in-
vestment adviser, or investment company enters
into a contract or agreement with, or accepts a
record from, a customer or other counterparty,
such broker, dealer, transfer agent, investment
adviser, or investment company may accept and
rely upon an electronic signature on such con-
tract, agreement, or record, and such electronic
signature shall not be denied legal effect, valid-
ity, or enforceability because it is an electronic
signature.
‘‘(2) IMPLEMENTATION.—
‘‘(A) REGULATIONS.—The Commission may
prescribe such regulations as may be necessary to
carry out this subsection consistent with the pub-
lic interest and the protection of investors.
‘‘(B) NONDISCRIMINATION.—The regulations
prescribed by the Commission under subpara-
graph (A) shall not—
‘‘(i) discriminate in favor of or against
a specific technology, method, or technique
of creating, storing, generating, receiving,
communicating, or authenticating electronic
records or electronic signatures; or
‘‘(ii) discriminate in favor of or
against a specific type or size of entity en-
gaged in the business of facilitating the use
of electronic records or electronic signatures.
‘‘(3) EXCEPTIONS.—Notwithstanding any other
provision of this subsection—
‘‘(A) the Commission, an appropriate regu-
latory agency, or a self-regulatory organization
may require that records be filed in a specified
electronic format or formats if the records are re-
quired to be submitted to the Commission, an
appropriate regulatory agency, or a self-regu-
latory organization, respectively; and
‘‘(B) the Commission may require that con-
tracts, agreements, or records relating to pur-
chases and sales, or establishing accounts for
conducting purchases and sales, of penny stocks
be manually signed, and may require such man-
ual signatures with respect to transactions in
similar securities if the Commission determines
that such securities are susceptible to fraud and
that such fraud would be deterred or prevented
by requiring manual signatures.
‘‘(4) RELATION TO OTHER LAW.—The provisions
of this subsection apply in lieu of the provisions of
title I of the Electronic Signatures in Global and Na-
tional Commerce Act to a contract, agreement, or
record (as defined in subsection (a)(37)) that is re-
quired by the securities laws.
‘‘(5) DEFINITIONS.—As used in this subsection:
‘‘(A) ELECTRONIC RECORD.—The term ‘elec-
tronic record’ means a writing, document, or
other record created, stored, generated, received,
or communicated by electronic means.
‘‘(B) ELECTRONIC
SIGNATURE.—The term
‘electronic signature’ means information or data
in electronic form, attached to or logically associ-
ated with an electronic record, that is intended
by a party to signify agreement to a contract or
agreement.
‘‘(C) ELECTRONIC.—The term ‘electronic’
means of or relating to technology having elec-
trical, digital, magnetic, optical, electromagnetic,
or similar capabilities regardless of medium.’’.
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Electronic
Signatures in Global and National Commerce
Act’’.
TITLE 
I—VALIDITY 
OF 
ELEC-
TRONIC RECORDS AND SIG-
NATURES FOR COMMERCE
SEC. 101. FINDINGS.
The Congress makes the following find-
ings:
(1) The growth of electronic com-
merce and electronic government trans-
actions represents a powerful force for
economic growth, consumer choice, im-
proved civic participation, and wealth
creation.
(2) The promotion of growth in pri-
vate sector electronic commerce through
Federal legislation is in the national in-
terest because that market is globally im-
portant to the United States.
(3) A consistent legal foundation,
across multiple jurisdictions, for elec-
tronic commerce will promote the growth
of such transactions, and that such a
foundation should be based upon a sim-
ple, technology neutral, nonregulatory,
and market-based approach.
(4) The Nation and the world stand at
the beginning of a large-scale transition
to an information society which will re-
quire innovative legal and policy ap-
proaches, and therefore, States can serve
the national interest by continuing their
proven role as laboratories of innovation
for quickly evolving areas of public pol-
icy, provided that States also adopt a
consistent, reasonable national baseline
to eliminate obsolete barriers to elec-
tronic commerce such as undue paper
and pen requirements, and further, that
any such innovation should not unduly
burden interjurisdictional commerce.
(5) To the extent State laws or regula-
tions do not provide a consistent, reason-
able national baseline or in fact create an
undue burden to interstate commerce in
the important burgeoning area of elec-
tronic commerce, the national interest is
best served by Federal preemption to the
extent necessary to provide such con-
sistent, reasonable national baseline and
eliminate said burden, but that absent
such lack of consistent, reasonable na-
tional baseline or such undue burdens,
the best legal system for electronic com-
merce will result from continuing experi-
mentation by individual jurisdictions.
(6) With due regard to the funda-
mental need for a consistent national
baseline, each jurisdiction that enacts
such laws should have the right to deter-
mine the need for any exceptions to pro-
tect consumers and maintain consistency
with existing related bodies of law within
a particular jurisdiction.
(7) Industry has developed several
electronic signature technologies for use
in electronic transactions, and the public
policies of the United States should serve
to promote a dynamic marketplace with-
in which these technologies can compete.
Consistent with this Act, States should
permit the use and development of any
authentication technologies that are ap-
propriate as practicable as between pri-
vate parties and in use with State agen-
cies.
SEC. 102. PURPOSES.
The purposes of this Act are—
(1) to permit and encourage the con-
tinued expansion of electronic commerce
through the operation of free market
forces rather than proscriptive govern-
mental mandates and regulations;
(2) to promote public confidence in
the validity, integrity, and reliability of
electronic commerce and online govern-
ment under Federal law;
(3) to facilitate and promote elec-
tronic commerce by clarifying the legal
status of electronic records and elec-
tronic signatures in the context of writ-
ing and signing requirements imposed by
law;
(4) to facilitate the ability of private
parties engaged in interstate transactions
to agree among themselves on the terms
and conditions on which they use and ac-
cept electronic signatures and electronic
records; and
(5) to promote the development of a
consistent national legal infrastructure
necessary to support electronic com-
merce at the Federal and State levels
within existing areas of jurisdiction.
SEC. 103. DEFINITIONS.
In this Act:
(1) 
ELECTRONIC.—The 
term 
‘‘elec-
tronic’’ means relating to technology hav-
ing electrical, digital, magnetic, wireless,
optical, electromagnetic, or similar capa-
bilities.
(2) 
ELECTRONIC
AGENT.—The 
term
‘‘electronic agent’’ means a computer pro-
gram or an electronic or other automated
means used to initiate an action or re-
spond to electronic records or perform-
ances in whole or in part without review
by an individual at the time of the action
or response.
(3) ELECTRONIC
RECORD.—The term
‘‘electronic record’’ means a record cre-
ated, generated, sent, communicated, re-
ceived, or stored by electronic means.
(4) ELECTRONIC SIGNATURE.—The term
‘‘electronic signature’’ means an elec-
tronic sound, symbol, or process attached
to or logically associated with an elec-
tronic record and executed or adopted by
a person with the intent to sign the elec-
tronic record.
(5) 
RECORD.—The 
term 
‘‘record’’
means information that is inscribed on a
tangible medium or that is stored in an
electronic or other medium and is re-
trievable in perceivable form.
(6) TRANSACTION.—The term ‘‘trans-
action’’ means an action or set of actions
relating to the conduct of commerce be-
tween 2 or more persons, neither of
which is the United States Government, a
State, or an agency, department, board,
commission, authority, institution, or in-
strumentality of the United States Gov-
ernment or of a State.
(7) UNIFORM ELECTRONIC TRANSACTIONS
ACT.—The 
term 
‘‘Uniform 
Electronic
Transactions Act’’ means the Uniform
Electronic Transactions Act as enacted
by a State based on the form provided by
the 
National 
Conference 
of 
Commis-
sioners on Uniform State Law in the form
or any substantially similar variation
thereof.
SEC. 104. PRINCIPLES GOVERNING THE USE OF ELEC-
TRONIC 
SIGNATURES 
IN 
INTERNATIONAL
TRANSACTIONS.
To the extent practicable, the Federal
Government shall observe the following prin-
ciples in an international context to enable
commercial electronic transaction:
(1) Remove paper-based obstacles to
electronic transactions by adopting rel-
evant principles from the Model Law on
Electronic Commerce adopted in 1996 by
the United Nations Commission on Inter-
national Trade Law (UNCITRAL).
(2) Permit parties to a transaction to
determine the appropriate authentication
technologies and implementation models
for their transactions, with assurance
that those technologies and implementa-
tion models will be recognized and en-
forced.
(3) Permit parties to a transaction to
have the opportunity to prove in court or
other proceedings that their authentica-
tion approaches and their transactions
are valid.
(4) Take a nondiscriminatory ap-
proach to electronic signatures and au-
thentication methods from other jurisdic-
tions.
SEC. 105. INTERSTATE CONTRACT CERTAINTY.
(a) IN GENERAL.—In any commercial trans-
action affecting interstate commerce, a con-
tract may not be denied legal effect or en-
forceability solely because an electronic sig-
nature or electronic record was used in its
formation.
(b) METHODS.—In commercial transactions
affecting interstate commerce, the parties to
a contract may agree on the terms and condi-
tions on which they will use and accept elec-
tronic signatures and electronic records, ex-
cept to the extent a law or regulation gov-
erning the record provides otherwise.
(c) RECORD RETENTION.—When a law re-
quires that a contract be in writing, that re-
quirement is satisfied by an electronic record
of the information in the record provided to
the parties which—
(1) accurately reflects the information
set forth in the record after it was first
generated in its final form as an elec-
tronic record or otherwise; and
(2) remains capable of retention in a
form that can be accessed for later ref-
erence and used to prove the terms of the
agreement.
(d) FORMULATION
OF CONTRACT.—A con-
tract relating to a commercial transaction af-
fecting interstate commerce may not be de-
nied legal effect solely because its formation
involved—
(1) 
the 
interaction 
of 
electronic
agents of the parties; or
(2) the interaction of an electronic
agent of a party and an individual who
acts on that individual’s own behalf or
for another person.
(e) APPLICATION
IN UETA STATES.—This
section does not apply in any State in which
the Uniform Electronic Transactions Act is in
effect.
SEC. 106. STUDY OF LEGAL AND REGULATORY BARRIERS
TO ELECTRONIC COMMERCE.
(a) BARRIERS.—Each Federal agency shall,
not later than 6 months after the date of en-
actment of this Act, provide a report to the Di-
rector of the Office of Management and Budg-
et and the Secretary of Commerce identifying
any provision of law administered by such
agency, or any regulations issued by such
agency and in effect on the date of enactment
of this Act, that may impose a barrier to elec-
tronic transactions, or otherwise to the con-
duct of commerce online or by electronic
means. Such barriers include, but are not lim-
ited to, barriers imposed by a law or regula-
tion directly or indirectly requiring that sig-
natures, or records of transactions, be accom-
plished or retained in other than electronic
form. In its report, each agency shall identify
the barriers among those identified whose re-
moval would require legislative action, and
shall indicate agency plans to undertake reg-
ulatory action to remove such barriers among
those identified as are caused by regulations
issued by the agency.
(b) REPORT TO CONGRESS.—The Secretary
of Commerce, in consultation with the Direc-
tor of the Office of Management and Budget,
shall, within 18 months after the date of en-
actment of this Act, and after the consultation
required by subsection (c) of this section, re-
port to the Congress concerning—
(1) legislation needed to remove bar-
riers to electronic transactions or other-
wise to the conduct of commerce online
or by electronic means; and
(2) actions being taken by the execu-
tive branch and individual Federal agen-
cies to remove such barriers as are
caused by agency regulations or policies.
(c) CONSULTATION.—In preparing the re-
port required by this section, the Secretary of
Commerce shall consult with the General
Services Administration, the National Ar-
chives and Records Administration, and the
Attorney General concerning matters involv-
ing the authenticity of records, their storage
and retention, and their usability for law en-
forcement purposes.
(d) INCLUDE FINDINGS IF NO RECOMMENDA-
TIONS.—If the report required by this section
omits recommendations for actions needed to
fully remove identified barriers to electronic
transactions or to online or electronic com-
merce, it shall include a finding or findings,
including substantial reasons therefor, that
such removal is impracticable or would be in-
consistent with the implementation or en-
forcement of applicable laws.
SEC. 107. STUDY OF EFFECTS OF ELECTRONIC COMMERCE.
(a) IN GENERAL.—The Federal Trade Com-
mission and the Secretary of Commerce shall
conduct a study of electronic commerce
issues.
(b) RESPONSIBILITY OF EACH AGENCY.—
(1) FTC.—The Federal Trade Commis-
sion, in consultation with the Secretary
of Commerce, shall conduct a portion of
the study to determine the effectiveness
of Federal and State consumer protection
laws with respect to electronic trans-
actions involving consumers.
(2) COMMERCE DEPARTMENT.—The Sec-
retary of Commerce, in consultation with
the Federal Trade Commission, shall con-
duct a portion of the study to determine
the extent to which a uniform commer-
cial legal framework would facilitate and
enforce 
interstate 
electronic 
trans-
actions.
(c) REPORT.—Not later than 2 years after
the date of the enactment of this Act, the Fed-
eral Trade Commission and the Secretary of
Commerce shall transmit a report to Congress
containing —
(1) findings from the study required
under subsection (a); and
(2) such recommendations for legisla-
tion or administrative actions as the Fed-
eral Trade Commission and the Secretary
of Commerce, respectively, deem appro-
priate.
(d) BIENNIAL UPDATES.—The Federal Trade
Commission and the Secretary of Commerce
shall update the report every 2 years there-
after and transmit the updated report to the
Congress.
TITLE 
II—DEVELOPMENT 
AND
ADOPTION OF ELECTRONIC
SIGNATURE PRODUCTS AND
SERVICES
SEC. 201. TREATMENT OF ELECTRONIC SIGNATURES IN
INTERSTATE AND FOREIGN COMMERCE.
(a) INQUIRY REGARDING IMPEDIMENTS
TO
COMMERCE.—
(1) INQUIRIES
REQUIRED.—Within 90
days after the date of the enactment of
this Act, and annually thereafter, the Sec-
retary of Commerce, acting through the
Assistant Secretary for Communications
and Information, shall complete an in-
quiry to—
(A) identify any domestic and for-
eign impediments to commerce in
electronic signature products and
services and the manners in which
and extent to which such impedi-
ments inhibit the development of
interstate and foreign commerce;
(B) identify constraints imposed
by foreign nations or international
organizations that constitute barriers
to providers of electronic signature
products or services; and
(C) identify the degree to which
other nations and international orga-
nizations are complying with the
principles in subsection (b)(2).
(2) SUBMISSION.—The Secretary shall
submit a report to the Congress regard-
ing the results of each such inquiry with-
in 90 days after the conclusion of such in-
quiry.
(b) PROMOTION
OF
ELECTRONIC
SIGNA-
TURES.—
(1) REQUIRED ACTIONS.—The Secretary
of Commerce, acting through the Assist-
ant Secretary for Communications and
Information, shall promote the accept-
ance and use, on an international basis,
of electronic signatures in accordance
with the principles specified in para-
graph (2) and in a manner consistent
with section 105 of this Act. The Sec-
retary of Commerce shall take all actions
necessary in a manner consistent with
such principles to eliminate or reduce, to
the maximum extent possible, the impedi-
ments to commerce in electronic signa-
tures, including those identified in the in-
quiries under subsection (a) for the pur-
pose of facilitating the development of
interstate and foreign commerce.
(2) PRINCIPLES.—The principles speci-
fied in this paragraph are the following:
(A) Free markets and self-regula-
tion, rather than government stand-
ard-setting or rules, should govern
the development and use of electronic
records and electronic signatures.
(B) Neutrality and nondiscrimina-
tion should be observed among pro-
viders of and technologies for elec-
tronic records and electronic signa-
tures.
(C) 
Parties 
to 
a 
transaction
should be permitted to establish re-
quirements regarding the use of elec-
tronic records and electronic signa-
tures acceptable to such parties.
(D) Parties to a transaction—
(i) should be permitted to de-
termine the appropriate authen-
tication technologies and imple-
mentation models for their trans-
actions, with assurance that those
technologies and implementation
models will be recognized and en-
forced; and
(ii) should have the oppor-
tunity to prove in court or other
proceedings that their authen-
tication 
approaches 
and 
their
transactions are valid.
(E) Electronic records and elec-
tronic signatures in a form accept-
able to the parties should not be de-
nied legal effect, validity, or enforce-
ability on the ground that they are
not in writing.
(F) De jure or de facto imposition
of standards on private industry
through foreign adoption of regula-
tions or policies with respect to elec-
tronic records and electronic signa-
tures should be avoided.
(G) Paper-based obstacles to elec-
tronic transactions should be re-
moved.
(c) FOLLOWUP STUDY.—Within 5 years after
the date of enactment of this Act, the Sec-
retary of Commerce, acting through the As-
sistant Secretary for Communications and In-
formation, shall conduct an inquiry regarding
any State statutes, regulations, or other rules
of law enacted or adopted after such date of
enactment. The Secretary shall submit a re-
port to the Congress regarding the results of
such inquiry by the conclusion of such 5-year
period and such report shall identify any ac-
tions taken by the Secretary pursuant to sub-
section (b) of this section.
(d) CONSULTATION.—In conducting the ac-
tivities required by this section, the Secretary
shall consult with users and providers of elec-
tronic signature products and services and
other interested persons.
(e) PRIVACY.—Nothing in this section shall
be construed to require the Secretary or the
Assistant Secretary to take any action that
would adversely affect the privacy of con-
sumers.
(f) DEFINITIONS.—As used in this section,
the terms ‘‘electronic record’’ and ‘‘electronic
signature’’ have the meanings provided in sec-
tion 103 of the Electronic Signatures in Global
and National Commerce Act.
TITLE III—USE OF ELECTRONIC
RECORDS AND SIGNATURES
UNDER FEDERAL SECURITIES
LAW
SEC. 301. GENERAL VALIDITY OF ELECTRONIC RECORDS
AND SIGNATURES.
Section 3 of the Securities Exchange Act
of 1934 (15 U.S.C. 78c) is amended by adding
at the end the following new subsection:
‘‘(h) REFERENCES TO WRITTEN RECORDS AND
SIGNATURES.—
‘‘(1) GENERAL VALIDITY OF ELECTRONIC
RECORDS AND SIGNATURES.—Except as oth-
erwise provided in this subsection—
‘‘(A) if a contract, agreement, or
record 
(as 
defined 
in 
subsection
(a)(37)) is required by the securities
laws or any rule or regulation there-
under (including a rule or regulation
of a self-regulatory organization), and
is required by other Federal or State
statute, regulation, or other rule of
law to be in writing, the legal effect,
validity, or enforceability of such con-
tract, agreement, or record shall not
be denied on the ground that the con-
tract, agreement, or record is not in
writing if the contract, agreement, or
record is an electronic record;
‘‘(B) if a contract, agreement, or
record is required by the securities
laws or any rule or regulation there-
under (including a rule or regulation
of a self-regulatory organization), and
is required by other Federal or State
statute, regulation, or other rule of
law to be signed, the legal effect, va-
lidity, or enforceability of such con-
tract, agreement, or record shall not
be denied on the ground that such
contract, agreement, or record is not
signed or is not affirmed by a signa-
ture if the contract, agreement, or
record is signed or affirmed by an
electronic signature; and
‘‘(C) if a broker, dealer, transfer
agent, investment adviser, or invest-
ment company enters into a contract
or agreement with, or accepts a
record from, a customer or other
counterparty, such broker, dealer,
transfer agent, investment adviser, or
investment company may accept and
rely upon an electronic signature on
such contract, agreement, or record,
and such electronic signature shall
not be denied legal effect, validity, or
enforceability because it is an elec-
tronic signature.
‘‘(2) IMPLEMENTATION.—
‘‘(A) REGULATIONS.—The Commis-
sion may prescribe such regulations
as may be necessary to carry out this
subsection consistent with the public
interest and the protection of inves-
tors.
‘‘(B) 
NONDISCRIMINATION.—The
regulations prescribed by the Com-
mission under subparagraph (A) shall
not—
‘‘(i) discriminate in favor of or
against 
a 
specific 
technology,
method, or technique of creating,
storing, 
generating, 
receiving,
communicating, or authenticating
electronic records or electronic
signatures; or
‘‘(ii) discriminate in favor of
or against a specific type or size
of entity engaged in the business
of facilitating the use of elec-
tronic records or electronic signa-
tures.
‘‘(3) 
EXCEPTIONS.—Notwithstanding
any other provision of this subsection—
‘‘(A) the Commission, an appro-
priate regulatory agency, or a self-
regulatory organization may require
that records be filed in a specified
electronic format or formats if the
records are required to be submitted
to the Commission, an appropriate
regulatory agency, or a self-regu-
latory organization, respectively; and
‘‘(B) the Commission may require
that 
contracts, 
agreements, 
or
records relating to purchases and
sales, or establishing accounts for
conducting purchases and sales, of
penny stocks be manually signed, and
may require such manual signatures
with respect to transactions in simi-
lar securities if the Commission de-
termines that such securities are sus-
ceptible to fraud and that such fraud
would be deterred or prevented by
requiring manual signatures.
‘‘(4) RELATION
TO
OTHER
LAW.—The
provisions of this subsection apply in lieu
of the provisions of title I of the Elec-
tronic Signatures in Global and National
Commerce Act to a contract, agreement,
or record (as defined in subsection
(a)(37)) that is required by the securities
laws.
‘‘(5) DEFINITIONS.—As used in this sub-
section:
‘‘(A) 
ELECTRONIC
RECORD.—The
term ‘electronic record’ means a writ-
ing, document, or other record cre-
ated, stored, generated, received, or
communicated by electronic means.
‘‘(B) ELECTRONIC
SIGNATURE.—The
term ‘electronic signature’ means in-
formation or data in electronic form,
attached to or logically associated
with an electronic record, that is in-
tended by a party to signify agree-
ment to a contract or agreement.
‘‘(C) ELECTRONIC.—The term ‘elec-
tronic’ means of or relating to tech-
nology having electrical, digital, mag-
netic, 
optical, 
electromagnetic, 
or
similar capabilities regardless of me-
dium.’’.