Each depositor insured to at least $250,000 per insured bank

Home > Regulation & Examinations > Laws & Regulations > FDIC Law, Regulations, Related Acts



[Table of Contents] [Previous Page] [Next Page] [Search]

8000 - Miscellaneous Statutes and Regulations


§ 240.17Ac2--2  Annual reporting requirement for registered transfer agents.

(a)  Every transfer agent registered on December 31 must file a report covering the reporting period on Form TA--2 (§ 249b.102 of this chapter) by March 31 following the end of the reporting period. Form TA--2 must be completed in accordance with the instructions contained in the Form. A transfer agent may file an amendment to Form TA--2 pursuant to the instructions on the form to correct information that has become inaccurate, incomplete, or misleading. A transfer agent may file an amendment at any time; however, in order to be timely filed, all required portions of the form must be completed and filed in accordance with this section and the instructions to the form by the date the form is required to be filed with the Commission.

(1)  A registered transfer agent that received fewer than 1,000 items for transfer in the reporting period and that did not maintain master securityholder files for more than 1,000 individual securityholder accounts as of December 31 of the reporting period must complete Questions 1 through 5, 11, and the signature section of Form TA--2.

(2)  A named transfer agent that engaged a service company to perform all of its transfer agent functions during the reporting period must complete Questions 1 through 3 and the signature section of Form TA--2.

(3)  A named transfer agent that engaged a service company to perform some but not all of its transfer agent functions during the reporting period must complete all of Form TA--2 but should enter zero (0) for those questions that relate to transfer agent functions performed by the service company on behalf of the named transfer agent.

(b)  For purposes of this section, the term reporting period shall mean the calendar year ending December 31 for which Form TA--2 is being filed. The term named transfer agent shall have the same meaning as defined in § 240.17Ad--9(j). The term service company shall have the same meaning as defined in § 240.17Ad--9(k).

(c)  Every annual report and amendment filed pursuant to this section shall be filed with the Commission electronically in the Commission's EDGAR system. Transfer agents should refer to Form TA--2 and the instructions to the form (§ 249b.102 of this chapter) and the EDGAR Filer Manual (§ 232.301 of this chapter) for further information regarding electronic filing. Every registered transfer agent must file an electronic Form TA--1 with the Commission, or an electronic amendment to its Form TA--1 if the transfer agent previously filed a paper Form TA--1 with the Commission, before it may file an electronic Form TA--2 or Form TA--W with the Commission.

[Codified to 17 C.F.R. § 240.17Ac2--2]

[Section 240.17Ac2--2 added at 51 Fed. Reg. 12127, April 9, 1986, effective May 9, 1986; 65 Fed. Reg. 36610, June 9, 2000, effective July 10, 2000; amended at 71 Fed. Reg. 74708, December 12, 2006, effective January 11, 2007]

Turnaround Requirements for Registered Transfer Agents—17Ad–1 through 17Ad–7

§ 240.17Ad--1  Definitions.

As used in this section and §§ 240.17Ad--2, 240.17Ad--3, 240.17Ad--4, 240.17Ad--5, 240.17Ad--6, and 240.17Ad--7:

(a)(1)  The term "item" means:

(i)  A certificate or certificates of the same issue of securities covered by one ticket (or, if there is no ticket, presented by one presentor) presented for transfer, or an instruction to a transfer agent which holds securities registered in the name of the presentor to transfer or to make available all or a portion of those securities;

(ii)  Each line on a "deposit shipment control list" or a "withdrawal shipment control list" submitted by a registered clearing agency; or

(iii)  In the case of an outside registrar, each certificate to be countersigned.

(2)  If a "deposit shipment control list" or "withdrawal shipment control list" contains both routine and non-routine transfer instructions, a registered transfer agent shall at its option:

(i)  Retain all transfer instructions listed on the shipment control list and treat each line on the shipment control list as a routine item; or

(ii)  Return promptly to the registered clearing agency a shipment control list line containing non-routine transfer instructions (together with a copy of the shipment control list, an explanation for the return instructions and all routine transfer instructions reflected on the same line) and treat each line on the shipment control list that reflects retained transfer instructions as a routine item.

(3)  A "deposit shipment control list" means a list of transfer instructions that accompanies certificates to be cancelled and reissued in the nominee name of a registered clearing agency.

(4)  A "withdrawal shipment control list" means a list of instructions (either in paper or electronic medium) that:

(i)  Directs issuance of certificates in the names of persons or entities other than the registered clearing agency; and

(ii)  Accompanies certificates to be cancelled which are registered in the nominee name of a registered clearing agency, or directs the transfer agent to reduce certificate or position balances maintained by the transfer agent on behalf of a registered clearing agency under that clearing agency's transfer agent custody program.

(b)  The term "outside registrar" with respect to a transfer item means a transfer agent which performs only the registrar function for the certificate or certificates presented for transfer and includes the persons performing similar functions with respect to debt issues.

(c)  An item is "made available" when

(1)  In the case of an item for which the services of an outside registrar are not required, or which has been received from an outside registrar after processing, the transfer agent dispatches or mails the item to, or the item is awaiting pick-up by, the presentor or a person designated by the presentor, or

(2)  In the case of an item for which the services of an outside registrar are required, the transfer agent dispatches or mails the item to, or the item is awaiting pick-up by, the outside registrar, or

(3)  In the case of an item for which an outside registrar has completed processing, the outside registrar dispatches or mails the item to, or the item is awaiting pick-up by, the presenting transfer agent.

(d)  The "transfer" of an item is accomplished when, in accordance with the presentor's instructions, all acts necessary to cancel the certificate or certificates presented for transfer and to issue a new certificate or certificates, including the performance of the registrar function, are completed and the item is made available to the presentor by the transfer agent, or when, in accordance with the presentor's instructions, a transfer agent which holds securities registered in the name of the presentor completes all acts necessary to issue a new certificate or certificates representing all or a portion of those securities and makes available the new certificate or certificates to the presentor or a person designated by the presentor or, with respect to those transfers of record ownership to be accomplished without the physical issuance of certificates, completes registration of change in ownership of all or a portion of those securities.

(e)  The "turnaround" of an item is completed when transfer is accomplished or, when an outside registrar is involved, the transfer agent in accordance with the presentor's instructions completes all acts necessary to cancel the certificate or certificates presented for transfer and to issue a new certificate or certificates, and the item is made available to an outside registrar.

(f)  The term "process" means the accomplishing by an outside registrar of all acts necessary to perform the registrar function and to make available to the presenting transfer agent the completed certificate or certificates or to advise the presenting transfer agent, orally or in writing, why performance of the registrar function is delayed or may not be completed.

(g)  The "receipt" of an item or a written inquiry or request occurs when the item or written inquiry or request arrives at the premises at which the transfer agent performs transfer agent functions, as defined in section 3(a)(25) of the Act.

(h)  A "business day" is any day during which the transfer agent is normally open for business and excludes Saturdays, Sundays, and legal holidays, or other holidays normally observed by the transfer agent.

(i)  An item is "routine" if it does not (1) require requisitioning certificates of an issue for which the transfer agent, under the terms of its agency, does not maintain a supply of certificates; (2) include a certificate as to which the transfer agent has received notice of a stop order, adverse claim, or any other restriction on transfer; (3) require any additional certificates, documentation, instructions, assignments, guarantees, endorsements, explanations, or opinions of counsel before transfer may be effected; (4) require review of supporting documentation other than assignments, endorsements or stock powers, certified corporate resolutions, signature, or other common and ordinary guarantees, or appropriate tax, or tax waivers; (5) involve a transfer in connection with a reorganization, tender offer, exchange, redemption, or liquidation; (6) include a warrant, right, or convertible security presented for transfer of record ownership within five business days before any day upon which exercise or conversion privileges lapse or change; (7) include a warrant, right, or convertible security presented for exercise or conversion; or (8) include a security of an issue which within the previous 15 business days was offered to the public, pursuant to a registration statement effective under the Securities Act of 1933, in an offering not of a continuing nature.

(j)  The term "depository-eligible securities issue" means an issue of securities that is eligible for deposit at any securities depository that is registered with the Commission under the Securities Exchange Act of 1934 as a clearing agency.

[Codified to 17 C.F.R. § 240.17Ad-1]

[Section 240.17Ad-1 added at 42 Fed. Reg. 32411, June 24, 1977, effective October 3, 1977; amended at 50 Fed. Reg. 40575, October 17, 1984, effective December 31, 1984; 51 Fed. Reg. 36551, October 14, 1986, effective January 1, 1987]

§ 240.17Ad-2  Turnaround, processing, and forwarding of items.

(a)  Every registered transfer agent (except when acting as an outside registrar) shall turnaround within three business days of receipt at least 90 percent of all routine items received for transfer during a month. For the purposes of this paragraph, items received at or before noon on a business day shall be deemed to have been received at noon on that day, and items received after noon on a business day or received on a day not a business day shall be deemed to have been received at noon on the next business day.

(b)  Every registered agent acting as an outside registrar shall process at least 90 percent of all items received during a month (1) by the opening of business on the next business day, in the case of items received at or before noon on a business day, and (2) by noon of the next business day, in the case of items received after noon on a business day. For the purpose of paragraphs (b) and (d) of this section, "items received" shall not include any item enumerated in § 240.17Ad-1(i)(5), (6), (7), or (8) or any item which is not accompanied by a debit or cancelled certificate. For the purposes of this paragraph, items received on a day not a business day shall be deemed to have been received before noon on the next business day.

(c)  Any registered transfer agent which fails to comply with paragraph (a) of this section with respect to any month shall, within ten business days following the end of such month, file with the Commission and the transfer agent's appropriate regulatory agency, if it is not the Commission, a written notice in accordance with paragraph (h) of this section. Such notice shall state the number of routine items and the number of non-routine items received for transfer during the month, the number of routine items which the registered transfer agent failed to turnaround in accordance with the requirements of paragraph (a) of this section, the percentage that such routine items represent of all routine items received during the month, the reasons for such failure, the steps which have been taken, are being taken or will be taken to prevent a future failure and the number of routine items, aged in increments of one business day, which as of the close of business on the last business day of the month have been in its position for more than four business days and have not been turned around.

(d)  Any registered transfer agent which fails to comply with paragraph (b) of this section with respect to any month shall, within ten business days following the end of such month, file with the Commission and the transfer agent's appropriate regulatory agency, if it is not the Commission, a written notice in accordance with paragraph (h) of this section. Such notice shall state the number of items received for processing during the month, the number of items which the registered transfer agent failed to process in accordance with the requirements of paragraph (b) of this section the percentage that such items represent of all items received during the month, the reasons for such failure and the steps which have been taken, are being taken or will be taken to prevent a future failure, and the number of items which as of the close of business on the last business day of the month have been in the transfer agent's possession for more than the time allowed for processing and have not been processed.

(e)(1)  Except as provided in paragraph (e)(2) of this section, all routine items not turned around within three business days of receipt as required by paragraph (a) of this section and all items not processed within the periods required by paragraph (b) of this section shall be turned around promptly, and all nonroutine items shall receive diligent and continuous attention and shall be turned around as soon as possible.

(2)  A transfer agent that is exempt under § 240.17Ad-4(b) and that has received 30 days notice of depository-eligibility of an issue for which it performs transfer agent functions shall turnaround ninety percent of all routine items received during a month within five business days of receipt. Such transfer agent shall devote diligent and continuous attention to the remaining ten percent of routine items and shall turnaround these items as soon as possible.

(f)  A registered transfer agent which receives items at locations other than the premises at which it performs transfer agent functions shall have appropriate procedures to assure, and shall assure that items are forwarded to such premises promptly.

(g)  A registered transfer agent which receives processed items from an outside registrar shall have appropriate procedures to assure, and shall assure, that such items are made available promptly to the presentor.

(h)  Any notice required by this section or § 240.17Ad-4 shall be filed as follows:

(1)  Any notice required to be filed with the Commission shall be filed in triplicate with the principal office of the Commission in Washington, D.C. 20549 and, in the case of a registered transfer agent for which the Commission is the appropriate regulatory agency, an additional copy shall be filed with the Regional Office of the Commission for the region in which the registered transfer agent has its principal office for transfer agent activities.

(2)  Any notice required to be filed with the Comptroller of the Currency shall be filed with the Office of the Comptroller of the Currency, Administrator of National Banks, Washington, D.C. 20219.

(3)  Any notice required to be filed with the Board of Governors of the Federal Reserve System shall be filed with the Board of Governors of the Federal Reserve System, Washington, D.C. 20251 and with the Federal Reserve Bank of the district in which the registered transfer agent's principal banking operations are conducted.

(4)  Any notice required to be filed with the Federal Deposit Insurance Corporation shall be filed with the Federal Deposit Insurance Corporation, Washington, D.C. 20429.

[Codified to 17 C.F.R. § 240.17Ad-2]

[Section 240.17Ad-2 added at 42 Fed. Reg. 32412, June 24, 1977, subsections (a), (b), and (e) effective January 2, 1978 and subsections (c), (d), (f), (g) and (h) effective October 3, 1977; amended at 50 Fed. Reg. 40575, October 17, 1984, effective December 31, 1984]

§ 240.17Ad-3  Limitations on expansion.

(a)  Any registered transfer agent which is required to file any notice pursuant to § 240.17Ad-2 (c) or (d) for each of three consecutive months shall not, from the fifth business day after the end of the third such month until the end of the next following period of three successive months during which no such notices have been required:

(1)  Initiate the performance of any transfer agent function or activity for an issue for which the transfer agent does not perform, or is not under agreement to perform, transfer agent functions prior to such fifth business day; and

(2)  With respect to an issue for which transfer agent functions are being performed on such fifth business day, intitiate for that issue the performance of an additional transfer agent function or activity which the transfer agent does not perform, or is not under agreement to perform, prior to such fifth business day.

(b)  Any registered transfer agent which for each of two consecutive months fails to turn around at least 75% of all routine items in accordance with the requirements of § 240.17Ad-2(a) or to process at least 75% of all items in accordance with the requirements of § 240.17Ad-2(b) shall be subject to the limitations imposed by paragraph (a) of this section and further shall, within twenty business days after the close of the second such month, send to the chief executive officer of each issuer for which such registered transfer agent acts a copy of the written notice filed pursuant to § 240.17Ad-2 (c) or (d) with respect to the second such month.

[Codified to 17 C.F.R. § 240.17Ad-3]


[Section 240.17Ad-3 added at 42 Fed. Reg. 32412, June 24, 1977, effective January 2, 1978]

§ 240.17Ad-4  Applicability of §§ 240.17Ad-2, 240.17Ad-3 and 240.17Ad-6(a)(1) through (7) and (11).

(a)  Sections 240.17Ad-2, 240.17Ad-3 and 240.17Ad-6(a)(1) through (7) and (11) shall not apply to interests in limited partnerships, to redeemable securities of investment companies registered under Section 8 of the Investment Company Act of 1940, or to interests in dividend reinvestment programs.

(b)(1)  For purposes of this section, "exempt transfer agent" means a transfer agent that during any six consecutive months shall have received fewer than 500 items for transfer and fewer than 500 items for processing.

(2)  Except as provided in paragraph (c) of this section, an exempt transfer agent that satisfies the requirements of paragraph (b)(3) shall be exempt from the provisions of §§ 240.17Ad-2(a), (b), (c), (d) and (h), 240.17Ad-3 and 240.17Ad-6(a)(2) through (7) and (11).

(3)  Within ten business days following the close of the sixth consecutive month described in paragraph (b)(1) of this section, an exempt transfer agent shall:

(i)  If its appropriate regulatory agency is either the Commission or the Office of the Comptroller of the Currency, prepare and maintain in its possession a document certifying that the transfer agent qualifies as exempt under paragraph (b)(1) of this section; or

(ii)  If its appropriate regulatory agency is either the Board of Governors of the Federal Reserve System or the Federal Deposit Insurance Corporation, file with the appropriate regulatory agency a notice certifying that it qualifies as exempt under paragraph (b)(1) of this section.

(c)  Within five business days following the close of each month, every exempt transfer agent shall calculate the number of items which it received during the preceding six months. Whenever any exempt transfer agent no longer qualifies as such under paragraph (b)(1), within ten business days after the end of such month: (1) It shall prepare and maintain in its possession a document so stating, if subject to paragraph (b)(3)(i) of this section; or (2) it shall file with its appropriate regulatory agency a notice to that effect, if subject to paragraph (b)(3)(ii) of this section. Thereafter, beginning with the first month following the month in which such document is required to be prepared or such notice is required to be filed, the registered transfer agent no longer shall be exempt under paragraph (b) of this section. Any registered transfer agent which has ceased to be an exempt transfer agent under this paragraph shall not qualify again for exemption until it has conducted its transfer agent operations pursuant to the foregoing sections for six consecutive months following the month in which it was required to prepare the document or prepare and file the notice specified in this paragraph.

[Codified to 17 C.F.R. § 240.17Ad-4]

[Section 240.17Ad-4 added at 42 Fed. Reg. 32412, June 24, 1977, effective October 3, 1977; amended at 48 Fed. Reg. 28246, June 21, 1983, effective July 25, 1983]

§ 240.17Ad-5  Written inquiries and requests.

(a)  When any person makes a written inquiry to a registered transfer agent concerning the status of an item presented for transfer during the preceding six months by such person or anyone acting on his behalf, which inquiry indentifies the issue, the number of shares (or principal amount of debt securities or number of units if relating to any other kind of security) presented, the approximate date of presentment and the name in which it is registered, the registered transfer agent shall, within five business days following receipt of the inquiry, respond, stating whether the item has been received; if received, whether it has been transferred; if received and not transferred, the reason for the delay and what additional matter, if any, is necessary before transfer may be effected; and, if received and transferred, the date and manner in which the completed item was made available, the addressee and address to which it was made available and the number of any new certificate which was registered and the name in which it was registered. If a new certificate is dispatched or mailed to the presentor within five business days following receipt of an inquiry pertaining to that certificate, no further reponse to the inquiry shall be required pursuant to this paragraph.

(b)  When any broker-dealer requests in writing that a registered transfer agent acknowledge the transfer instructions and the possession of a security presented for transfer by such broker-dealer or revalidate a window ticket with respect to such security and the request identifies the issue, the number of shares (or principal amount of debt securities or number of units if relating to any other kind of security), the approximate date of presentment, the certificate number and the name in which it is registered, every registered transfer agent shall, within five business days following receipt of the request, in writing, confirm or deny possession of the security, and, if the registered transfer agent has possession, (1) acknowledge the transfer instructions or (2) revalidate the window ticket. If a new certificate is dispatched or mailed to the presentor within five business days following receipt of a request pertaining to that certificate, no further response to the inquiry shall be required pursuant to this paragraph.

(c)  When any person, or anyone acting under his authority, requests in writing that a transfer agent confirm possession as of a given date of a certificate presented by such person during the 30 days before the date the inquiry is received and the request identifies the issue, the number of shares (or principal amount of debt securities or number of units if relating to any other kind of security), the approximate date of presentment, the certificate number and the name in which the certificate was registered, every registered transfer agent shall, within ten business days following receipt of the request and upon assurance of payment of a reasonable fee if required by such transfer agent, make available a written response to such person, or anyone acting under his authority, confirming or denying possession of such security as of such given date.

(d)  When any person requests in writing a transcript of such person's account with respect to a particular issue, either as the account appears currently or as it appeared on a specific date not more than six months prior to the date the registered transfer agent receives the request, every registered transfer agent shall, within twenty business days following receipt of the request and upon assurance of payment of a reasonable fee if required by such transfer agent, make available to such person a transcript, ledger or statement of account in sufficient detail to permit reconstruction of such account as of the date for which the transcript was requested.

(e)(1)  Response to Written Inquiries Concerning Dividend and Interest Payments.  A registered transfer agent shall respond, within ten business days of receipt, to current claims that contain sufficient detail. A registered transfer agent shall respond, within twenty business days of receipt, to aged claims that contain sufficient detail. The response shall indicate in writing that the inquiry has been received, whether the claim requires further research and, if so, a reasonable estimate of how long that research may take. If no further research is required, the response shall indicate whether that claim is being or will be paid and, if not, the reason for not paying the claim. A registered transfer agent shall devote diligent attention to unresolved inquiries and shall resolve all inquiries as soon as possible.

(2)  Misdirected Written Inquiries Concerning Dividend and Interest Payments.  In the event that a transfer agent is not the dividend disbursing or interest paying agent for an issue that is the subject of a claim under this section, but performed those or any transfer agent services for that issue within the preceding three years, the transfer agent shall provide in writing to the inquirer, within ten business days of receipt of the inquiry, the name and address of the current dividend disbursing or interest paying agent. If the transfer agent did not perform those or other transfer agent services for the issue within the preceding three years, the transfer agent must respond to the inquiry and may respond by returning the inquiry with a statement that the transfer agent is not the current dividend disbursing or interest paying agent and that it does not know the name and address of the current dividend disbursing or interest paying agent.

(3)  As used in this paragraph:

(i)  A "current claim" means a written inquiry concerning non-payment or incorrect payment of dividends or interest, the payment date for which occurred within the preceding six months.

(ii)  An "aged claim" means a written inquiry concerning non-payment or incorrect payment of dividends or interest, the payment date for which occurred more than six months before the inquiry.

(iii)  "Sufficient detail" means a written inquiry or request that identifies: the issue; the name(s) in which the securities are registered; the number of shares (or principal amount of debt securities or number of units for any other kind of security) involved; the approximate record date(s) or payment date(s) relating to the claim; and, with respect to registered broker-dealers, registered clearing agencies, or banks, certificate numbers.

(f)  Telephone Response.  (1)  A transfer agent may satisfy the written response requirements of this section by a telephone response to the inquirer if:

(i)  The telephone response resolves that inquiry; and

(ii)  The inquirer does not request a written response.

(2)  When any person makes a written inquiry or request that would qualify under paragraph (e) of this section except that it fails to provide sufficient detail as specified in paragraph (e)(3)(iii), a registered transfer agent may telephone the inquirer to obtain the necessary additional detail within the time periods specified in paragraph (e)(1). If the transfer agent does not receive the additional detail within ten business days, the transfer agent immediately shall make a written request for the additional information.

(g)(1)  When any person makes a written inquiry or request which would qualify under paragraphs (a), (b), (c), or (d) of this section except that it fails to provide all of the information specified in those paragraphs, or requests information which refers to a time earlier than the time periods specified in those paragraphs, a registered transfer agent shall confirm promptly receipt of the inquiry or request and respond to it as soon as possible.

(2)  When any person makes a written inquiry or request which would qualify under paragraph (e) of this section except that it fails to provide sufficient detail as specified in paragraph (e)(3)(iii), a registered transfer agent must respond to the inquiry within the time periods specified in paragraph (e)(1). A registered transfer agent may respond to such an inquiry in accordance with paragraph (e)(1) as though sufficient detail had been provided, or may return it to the inquirer, requesting the additional necessary details.

[Codified to 17 C.F.R. § 240.17Ad-5]

[Section 240.17Ad-5 added at 42 Fed. Reg. 32413, June 24, 1977, effective January 2, 1978; 42 Fed. Reg. 62129, December 9, 1977, effective January 9, 1978; 51 Fed. Reg. 5707, February 18, 1986, effective April 1, 1986]

§ 240.17Ad-6  Recordkeeping.

(a)  Every registered transfer agent shall make and keep current the following:

(1)  A receipt, ticket, schedule, log or other record showing the business day each routine item and each non-routine item is (i) received from the presentor and, if applicable, from the outside registrar and (ii) made available to the presentor and, if applicable, to the outside registrar;

(2)  A log, tally, journal, schedule or other record showing for each month;

(i)  The number of routine items received;

(ii)  The number of routine items received during the month that were turned around within three business days of receipt;

(iii)  The number of routine items received during the month that were not turned around within three business days of receipt;

(iv)  The number of non-routine items received during the month;

(v)  The number of non-routine items received during the months that were turned around;

(vi)  The number of routine items that, as of the close of business on the last business day of each month, have been in such registered transfer agent's possession for more than four business days, aged in increments of one business day (beginning on the fifth business day); and

(vii)  The number of non-routine items in such registered transfer agent's possession as of the close of business on the last business day of each month;

(3)  With respect to items for which the registered transfer agent acts as an outside registrar:

(i)  A receipt, ticket, schedule, log or other record showing the date and time:

(A)  Each item is (1) received from the presenting transfer agent and (2) made available to the presenting transfer agent;

(B)  Each written or oral notice of refusal to perform the registrar function is made available to the presenting transfer agent (and the substance of the notice); and

(ii)  A log, tally, journal, schedule, or other record showing for each month:

(A)  The number of items received;

(B)  The number of items processed within the time required by § 240.17Ad--2(b); and

(C)  The number of items not processed within the time required by § 240.17Ad--2(b);

(4)  A record of calculations demonstrating the registered transfer agent's monitoring of its performance under § 240.17Ad--2(a) and (b);

(5)  A copy of any written notice filed pursuant to § 240.17Ad--2;

(6)  Any written inquiry or request, including those not subject to the requirements of § 240.17Ad--5, concerning an item, showing the date received; a copy of any written response to an inquiry or request, showing the date dispatched or mailed to the presentor, if no response to an inquiry or request was made, the date the certificate involved was made available to the presentor; or, in the case of an inquiry or request under § 240.17Ad--5(a) responded to by telephone, a telephone log or memorandum showing the date and substance of any telephone response to the inquiry;

(7)  A log, journal, schedule, or other record showing the number of inquiries subject to § 240.17Ad--5(a), (b), (c) and (d) received during each month but not responded to within the required time frames and the number of such inquiries pending as of the close of business on the last business day of each month.

(8)  Any document, resolution, contract, appointment or other writing, and any supporting document, concerning the appointment and the termination of such appointment of such registered transfer agent to act in any capacity for any issue on behalf of the issuer, on behalf of itself as the issuer or on behalf of any person who was engaged by the issuer to act on behalf of the issuer;

(9)  Any record of an active (i.e., unreleased) stop order, notice of adverse claim or any other restriction on transfer;

(10)  A copy of any transfer journal and registrar journal prepared by such registered transfer agent; and

(11)  any document upon which the transfer agent bases its determination that an item received for transfer was received in connection with a reorganization, tender offer, exchange, redemption, liquidation, conversion or the sale of securities registered pursuant to the Securities Act of 1933 and, accordingly, was not routine under § 240.17Ad--1(i)(5) or (8).

(b)  Every registered transfer agent which, under the terms of its agency, maintains securityholder records for an issue or which acts as a registrar for an issue shall, with respect to such issue, obtain from the issuer or its transfer agent and retain documentation setting forth the total number of shares or principal amount of debt securities or total number of units if relating to any other kind of security authorized and the total issue and outstanding pursuant to issued authorization.

(c)  Every registered transfer agent which, under the terms of its agency, maintains securityholder records for an issue shall, with respect to such issue, retain each cancelled registered bond, debenture, share, warrant, or right, other registered evidence of indebtedness, or other certificate of ownership and all accompanying documentation, except legal papers returned to the presentor.

[Codified to 17 C.F.R. § 240.17Ad--6]

[Section 240.17Ad--6 added at 42 Fed. Reg. 32413, June 24, 1977, effective January 2, 1978]

§ 240.17Ad--7  Record retention.

(a)  The records required by § 240.17Ad--6(a), (1), (3)(i), (6) or (11) shall be maintained for a period of not less than two years, the first six months in an easily accessible place.

(b)  The records required by § 240.17Ad--6(a)(2), (3)(ii), (4), (5) or (7) shall be maintained for a period of not less than two years, the first year in an easily accessible place.

(c)  The records required by § 240.17Ad--6(a)(8), (9) and (10) and (b) shall be maintained in an easily accessible place during the continuance of the transfer agency and shall be maintained for one year after the termination of the transfer agency.

(d)  The records required by § 240.17Ad--6(c) shall be maintained for a period of not less than six years, the first six months in an easily accessible place.

(e)  Every registered transfer agent shall maintain in an easily accessible place:

(1)  All records required under § 240.17f--2(d) until at least three years after the termination of employment of those persons required by § 240.17f--2 to be fingerprinted; and

(2)  All records required pursuant to § 240.17f--2(e).

(f)(1)  For purposes of this section:

(i)  The term micrographic media means microfilm or microfiche or any similar medium.

(ii)  The term electronic storage media means any digital storage medium or system.

(iii)  The term ARA means your appropriate regulatory agency as that term is defined in 15 U.S.C. 78c(a)(34).

(2)  If you as a registered transfer agent use electronic storage media or micrographic media to store your records, you must:

(i)  Have available at all times for examination by the staffs of the Commission and of your ARA facilities to project or produce immediately easily readable images of such records;

(ii)  Be ready at all times to provide such records that the staffs of the Commission and your ARA or their representatives may request;

(iii)  Create an accurate index of such records, store the index with those records, and have the index available at all times for examination by the staffs of the Commission and your ARA;

(iv)  Have quality assurance procedures to verify the quality and accuracy of the electronic or micrographic recording process; and

(v)  Maintain separately from the originals duplicates of the records and the index that you store on electronic storage media or micrographic media. You may store the duplicates of the indexed records on any medium permitted by this section. You must preserve the duplicate records and index for the same time that is required by this section for the indexed records, and you must have them available at all times for examination by the staffs of the Commission and your ARA.

(3)  Any electronic storage media that you use to store your records must:

(i)  Ensure the security and integrity of the records by means of manual and automated controls that assure the authenticity and quality of the electronic facsimile, detect attempts to alter or remove the records, and provide means to recover altered, damaged, or lost records resulting from any cause;

(ii)  Externally label all removable units of storage media using a unique identifier that allows the manual association of that removable storage unit with its place and order in the recordkeeping system; and

(iii)  Uniquely identify files and internally label each file with its unique name, the date and time of file creation, the date and time of last modification or extension, and a file sequence number when the file spans more than one volume.

(4)  If you use electronic storage media or micrographic media to store your records, you must establish an audit system that accounts for the inputting of and any changes to every record that is stored on electronic storage media or micrographic media. The results of such audit system must:

(i)  Be available at all times for examination by the staffs of the Commission and your ARA; and

(ii)  Be preserved for the same time that is required by this section for the underlying records.

(5)  If you use electronic storage media or micrographic media to store your records, you must:

(i)  Maintain, keep current, and provide promptly upon request by the staffs of the Commission and your ARA all information necessary to access the records and indexes stored on electronic storage media or micrographic media; and

(ii)  Place in escrow with an independent third party and keep current a copy of the physical and logical format of the electronic storage or micrographic media, the field format of all different information types written on the electronic storage media and source code, and the appropriate documentation and information necessary to access records and indexes. The independent escrow agent must file an undertaking signed by a duly authorized person with the Commission and your ARA stating that:

"[Name of Third Party] hereby undertakes to furnish promptly upon request to the U.S. Securities and Exchange Commission, its designees, or representatives, upon reasonable request, a current copy of the physical and logical format of the electronic storage or micrographic media, the field format of all different information types written on the electronic storage media and source code, and the appropriate documentation and information necessary to access the records and indexes of [Name of Transfer Agent]'s electronic records management system.

(6)(i)  If you use a third party to maintain or preserve some or all of the required records using electronic storage media or micrographic media, such third party shall file a written undertaking signed by a duly authorized person with the Commission and your ARA stating that:

"With respect to any books and records maintained or preserved on behalf of [Name of Transfer Agent], [Name of Third Party] hereby undertakes to permit examination of such books and records at any time or from time to time during business hours by representatives or designees of the U.S. Securities and Exchange Commission, and to promptly furnish to said Commission or its designee true, correct, complete, and current hard copies of any or all or any part of such books and records."

(ii)  Agreement with a third party to maintain your records shall not relieve you from the responsibility to prepare and maintain records as specified in this section or in § 240.17Ad--6.

(g)  If the records required to be maintained and preserved by a registered transfer agent pursuant to the requirements of §§ 240.17Ad--6 and 240.17Ad--7 are maintained and preserved on behalf of the registered transfer agent by an outside service bureau, other recordkeeping service or the issuer, the registered transfer agent shall obtain, from such outside service bureau, other recordkeeping service or the issuer, an agreement, in writing, to the effect that:

(1)  Such records are subject at any time, or from time to time to reasonable periodic, special, or other examinations by representatives of the Commission and the appropriate regulatory agency for such registered transfer agent, if it is not the Commission; and

(2)  The outside service bureau, recordkeeping service, or issuer will furnish to the Commission and the appropriate regulatory agency, upon demand, at either the principal office or at any regional office, complete, correct and current hard copies of any and all such records.

(h)  When a registered transfer agent ceases to perform transfer agent functions for an issue, the responsibility of such transfer agent under § 240.17Ad--7 to retain the records required to be made and kept current under § 240.17Ad--6(a) (1), (6), (9), (10), and (11)(b) and (c) shall end upon the delivery of such records to the successor transfer agent.

(i)  The records required by §§ 240.17Ad--17(c) and 240.17Ad--19(c) shall be maintained for a period of not less than three years, the first year in an easily accessible place.

[Codified to 17 C.F.R. § 240.17Ad--7]

[Section 240.17Ad-7 added at 42 Fed. Reg. 32414, June 24, 1977, effective January 2, 1978; amended at 47 Fed. Reg. 54062, December 1, 1982, effective November 22, 1982; 62 Fed. Reg. 52237, October 7, 1997, effective December 8, 1997; 66 Fed. Reg. 21659, May 1, 2001, effective May 31, 2001; 68 Fed. Reg. 74401, December 23, 2003, effective January 22, 2004]

§ 240.17Ad-8  Securities position listings.

(a)  For purposes of this section, the term "securities position listing" means, with respect to the securities of any issuer held by a registered clearing agency in the name of the clearing agency or its nominee, a list of those participants in the clearing agency on whose behalf the clearing agency holds the issuer's securities and of the participants' respective positions in such securities as of a specified date.

(b)  Upon request, a registered clearing agency shall furnish a securities position listing promptly to each issuer whose securities are held in the name of the clearing agency or its nominee. A registered clearing agency may charge issuers requesting securities position listings a fee designed to recover the reasonable costs of providing the securities position listing to the issuer.

[Codified to 17 C.F.R. § 240.17Ad-8]

[Section 240.17Ad-8 added at 44 Fed. Reg. 76777, December 28, 1979, effective January 28, 1980]

§ 240.17Ad-9  Definitions.

As used in this section and § § 240.17Ad-10, 240.17Ad-11, 240.17Ad-12 and 240.17Ad-13:

(a)  "Certificate detail," with respect to certificated securities, includes, at a minimum, all of the following, and with respect to uncertificated securities, includes items (2) through (8):

(1)  The certificate number;

(2)  The number of shares for equity securities or the principal dollar amount for debt securities;

(3)  The securityholder's registration;

(4)  The address of the registered securityholder;

(5)  The issue date of the security;

(6)  The cancellation date of the security;

(7)  In the case of redeemable securities of investment companies, an appropriate description of each debit and credit (i. e., designation indicating purchase, redemption, or transfer); and

(8)  Any other identifying information about securities and securityholders the transfer agent reasonably deems essential to its recordkeeping system for the efficient and effective research of record differences.

(b)  "Master securityholder file" is the offical list of individual securityholder accounts. With respect to uncertificated securities of companies registered under the Investment Company Act of 1940, the master securityholder file may consist of multiple, but linked, automated files.

(c)  A "subsidiary file" is any list or record of accounts, securityholders, or certificates that evidences debits or credits that have not been posted to the master securityholder file.

(d)  A "control book" is the record or other document that shows the total number of shares (in the case of equity securities) or the principal dollar amount (in the case of debt securities) authorized and issued by the issuer.

(e)  A "credit" is an addition of appropriate certificate detail to the master securityholder file.

(f)  A "debit" is a cancellation of appropriate certificate detail from the master securityholder file.

(g)  A "record difference" occurs when either: (1) The total number of shares or total principal dollar amount of securites in the master securityholder file does not equal the number of shares or principal dollar amount in the control book; or (2) the security transferred or redeemed contains certificate detail different from the certificate detail currently on the master securityholder file, which difference cannot be immediately resolved.

(h)  A "recordkeeping transfer agent" is the registered transfer agent that maintains and updates the master security holder file.

(i)  A "co-transfer agent" is the registered transfer agent that transfers securities but does not maintain and update the master securityholder file.

(j)  A "named transfer agent"is the registered transfer agent that is engaged by an issuer to perform transfer agent functions for an issue of securities but has engaged a service company to perform some or all of those functions.

(k)  A "service company" is the registered transfer agent engaged by a named transfer agent to perform transfer agent functions for that named transfer agent.

(l)  A "file" includes automated and manual records.

[Codified to 17 C.F.R. § 240.17Ad-9]

[Section 240.17Ad-9 added at 48 Fed. Reg. 28246, June 21, 1983, effective September 30, 1983]

§ 240.17Ad-10  Prompt posting of certificate detail to master securityholder files, maintenance of accurate securityholder files, communications between co-transfer agents and recordkeeping transfer agents, maintenance of current control book, retention of certificate detail and "buy-in" of physical over-issuance.

(a)(1)  Every recordkeeping transfer agent shall promptly and accurately post to the master securityholder file debits and credits containing minimum and appropriate certificate detail representing every security transferred, purchased, redeemed or issued; Provided, however, That if a security transferred or redeemed contains certificate detail different from that currently posted to the master securityholder file, the credit shall be posted to the master securityholder file and the debit and related certificate detail shall be maintained in a subsidiary file until resolved. The recordkeeping transfer agent shall exercise diligent and continuous attention to resolve the resulting record difference and, once resolved, shall post to the master securityholder file the debit maintained in the subsidiary file. Postings of certificate detail shall remain on the master securityholder file until a debit to a securityholder account is appropriate.

(2)  As used in this paragraph, the term "promptly" means the following number of days after issuance, purchase, transfer, or redemption of a security:

(i)  With respect to recordkeeping transfer agents (other than transfer agents that perform transfer agent functions with respect to redeemable securities issued by investment companies registered under section 8 of the Investment Company Act of 1940) that are exempt transfer agents under § 240.17Ad-4(b), 30 calendar days;

(ii)  With respect to recordkeeping transfer agents (other than transfer agents that perform transfer agent functions with respect to redeemable securities issued by investment companies registered under section 8 of the Investment Company Act of 1940) that: (A) Perform transfer agent functions solely for their own or their affiliated companies' securities issues, and (B) employ batch posting systems, ten business days; and

(iii)  With respect to all other recordkeeping transfer agents, five business days; Provided, however, That all securities transferred, purchased, redeemed or issued prior to record date, but posted subsequent thereto, shall be posted as of the record date.

(3)  With respect to posting certificate detail from transfer journals received by the recordkeeping transfer agent from a co-transfer agent, the time frames set forth in paragraph (a)(2) shall commence upon receipt of those journals by the recordkeeping transfer agent.

(b)  Every recordkeeping transfer agent shall maintain and keep current an accurate master securityholer file and subsidiary files. If such transfer agent has any record difference, its master securityholder file and subsidiary files must accurately represent all relevant debits and credits until the record difference is resolved. The recordkeeping transfer agent shall exercise diligent and continuous attention to resolve all record differences.

(c)(1)  Every co-transfer agent shall dispatch or mail promptly to the recordkeeping transfer agent a record of debits and credits for every security transferred or issued. For the purposes of this paragraph, "promptly" means within two business days following transfer of each security, and, with respect to transfers occurring within five business days of record date, daily.

(2)  Within three business days following the end of each month, every co-transfer agent shall mail to the recordkeeping transfer agent for each issue of securities for which it acts as a co-transfer agent, a report setting forth:

(i)  The principal dollar amount of debt securities or the number of shares and related market value of equity securities comprising any buy-in executed by the co-transfer agent during the preceding month pursuant to paragraph (g) of this section; and

(ii)  The reason for the buy-in.

(d)  Every co-transfer agent shall respond promptly to all inquiries from the recordkeeping transfer agent regarding records required to be dispatched or mailed by the co-transfer agent pursuant to § 240.17Ad-10(c). For the purposes of this paragraph, "promptly'' means within five business days of receipt of an inquiry from a recordkeeping transfer agent.

(e)  Every recordkeeping transfer agent shall maintain and keep current an accurate control book for each issue of securities. A change in the control book shall not be made except upon written authorization from a duly authorized agent of the issuer.

(f)  Every recordkeeping transfer agent shall retain a record of all certificate detail deleted from the master securityholder file for a period of six years from the date of deletion. In lieu of maintaning a hard copy, a recordkeeping transfer agent may comply with this paragraph by complying with § 240.17Ad-7(f) or § 240.17Ad-7(g).

(g)(1)  A registered transfer agent, in the event of any actual physical overissuance that such transfer agent caused and of which it has knowledge, shall, within 60 days of the discovery of such overissuance, buy in securities equal to the number of shares in the case of equity securities or the principal dollar amount in the case of debt securities. During the sixty-day period, the registered transfer agent shall devote diligent attention to resolving the overissuance and recovering the certificates. This paragraph requires a buy-in only by the transfer agent that erroneously issued the certificate(s) giving rise to the physical overissuance, and applies only to those physical overissuances created by transfers or issuances subsequent to September 30, 1983.

(2)  If a transfer agent obtains a letter from the party holding the overissued certificates that confirms that the overissued certificate(s) will be returned to the transfer agent not later than thirty days after the expiration of the sixty-day period, the transfer agent need not buy in securities by the sixtieth day. If, however, the certificate(s) are not returned to the transfer agent within the additional thirty-day period, the transfer agent immediately must execute the buy-in in accordance with paragraph (g)(1) of this section.

(3)  If the certificates involved are covered by a surety bond indemnifying the transfer agent for all expenses incurred as a result of actual overissuance, the transfer agent need not buy in the securities. The transfer agent, however, shall devote diligent attention to resolving the overissuance and recovering the certificates.

(4)  For purposes of this paragraph, "discovery of the overissuance" occurs when the transfer agent identifies the erroneously issued certificate(s) and the registered securityholder(s).

(h)  Subsequent to the effective date of this section, registered transfer agents that:

(1)  Assume the maintenance and updating of master securityholder files from predecessor transfer agents,

(2)  Establish a new master securityholder file for a particular issue, or

(3)  Convert from manual to automated systems, must carry over any existing certificate detail required by this section on the master securityholder file. A recordkeeping transfer agent shall not be required to add certificate detail to the master securityholder file respecting certificates issued prior to the effective date of this section.

[Codified to 17 C.F.R. § 240.17Ad-10]

[Section 240.17Ad-10 added at 48 Fed. Reg. 28246, June 21, 1983, effective September 30, 1983; 51 Fed. Reg. 5708, February 18, 1986, effective April 1, 1986]

240.17AD-11  Reports regarding aged record differences, buy-ins and failure to post certificate detail to master securityholder and subsidiary files.

(a)  Definitions.  (1) "Issuer capitalization" means the market value of the issuer's authorized and outstanding equity securities or, with respect to a municipal securities issuer, the market value of all debt issues for which the transfer agent performs recordkeeping functions on behalf of that issuer, determined by reference to the control book and current market prices.

(2)  An "aged record difference" is a record difference that has existed for more than thirty calendar days.

(b)  Reports to Issuers.  (1) Within ten business days following the end of each month, every recordkeeping transfer agent shall report the information specified in paragraph (d)(1) of this section to the persons specified in paragraph (b)(3) of this section, when the aggregate market value of aged record differences in all equity securities issues or debt securities issues maintained on behalf of a particular issuer exceeds the thresholds set forth

Issuer capitalization Aggregate market value of aged record differences exceeds
For equitysecurities For debtsecurities
(1) $5 million or less $50,000 $100,000
(2) Greater than $5 million but less than $50 million 250,000 500,000
(3) Greater than $50 million but less than $150 million 500,000 1,000,000
(4) Greater than $150 million 1,000,000 2,000,000

(2)  Within ten business days following the end of each month (or within ten days thereafter in the case of a named transfer agent that receives a report from a service company pursuant to paragraph (b)(3)(i)(C)), every recordkeeping transfer agent shall report the information specified in paragraph (d)(2) of this section to the persons specified in paragraph (b)(3) of this section, with respect to each issue of securities for which it acts as recordkeeping transfer agent, concerning any securities bought-in pursuant to §240.17Ad-10(g) or reported as bought-in pursuant to § 240.17Ad-10(c) during the preceding month.

(3)  The report shall be sent:

(i)  By every recordkeeping transfer agent (other than a recordkeeping transfer agent that performs transfer agent functions solely for its own securities):

(A)  To the official performing corporate secretary functions for the issuer of the securities for which the aged record difference exists or for which the buy-in occurred;

(B)  With respect to an issue of municipal securities, to the chief financial officer of the issuer of the securities for which the aged record difference exists or for which the buy-in occurred; or

(C)  If it acts as a service company, to the named transfer agent; and

(ii)  By every named transfer agent that is engaged by an issuer to maintain and update the master securityholder file:

(A)  to the official performing corporate secretary functions for the issuer of the securities for which the aged record difference exists or for which the buy-in occurred; or

(B)  with respect to an issue of municipal securities, to the chief financial officer of the issuer of the securities for which the aged record difference exists or for which the buy-in occurred.

(c)  Reports to Appropriate Regulatory Agencies.--(1) Within ten business days following the end of each calendar quarter, every recordkeeping transfer agent shall report the information specified in paragraph (d)(1) of this section to its appropriate regulatory agency in accordance with § 240.17Ad-2(h), when the aggregate market value of aged record differences for all issues for which it performs recordkeeping functions exceeds the thresholds specified below:

(i)  $300,000 if it is a recordkeeping transfer agent for five or fewer issues;

(ii)  $500,00 for 6-24 issues;

(iii)  $800,000 for 25-49 issues;

(iv)  $1 million for 50-74 issues;

(v)  $1.2 million for 75-99 issues;

(vi)  $1.4 million for 100-499 issues;

(vii)  $1.6 million for 500-999 issues;

(viii)  $2.6 million for 1,000-1,999 issues; and

(ix)  An additional $1 million for each additional 1,000 issues.

(2)  Within ten business days following the end of each calendar quarter, every recordkeeping transfer agent shall report the information specified in paragraph (d)(2) of this section to its appropriate regulatory agency in accordance with § 240.17Ad-2(h), concerning buy-ins of all issues for which it acts as recordkeeping transfer agent, when the aggregate market value of all buy-ins executed pursuant to § 240.17Ad-10(g) during that calendar quarter exceeds $100,000.

(3)  When the recordkeeping transfer agent has any debits or credits for securities transferred, purchased, redeemed or issued that are unposted to the master securityholder and/or subsidiary files for more than five business days after debits and credits are required to be posted to the master securityholder file or subsidiary files pursuant to § 240.17Ad-10, it shall immediately report such fact to its appropriate regulatory agency in accordance with § 240.17Ad-2(h) and shall state in that report what steps have been, and are being, taken to correct the situation.

(d)  Content of Reports.  --(1) Each report pursuant to paragraphs (b)(1) and (c)(1) of this section shall set forth with respect to each issue of securities:

(i)  The principal dollar amount and related market value of debt securities or the number of shares and related market value of equity securities comprising the aged record difference (including information concerning aged record differences existing as of the effective date of this section);

(ii)  The reasons for the aged record difference; and

(iii)  The steps being taken or to be taken to resolve the aged record difference.

(2)  Each report pursuant to paragraphs (b)(2) and (c)(2) of this section shall set forth with respect to each issue of securities:

(i)  The principal dollar amount of debt securities and related market value or the number of shares and related market value of equity securities comprising any buy-in executed pursuant to § 240.17Ad-10(g);

(ii)  The party that executed the buy-in; and

(iii)  The reason for the buy-in.

(e)  For purposes of this section, the market value of an issue shall be determined as of the last business day on which market value information is available during the reporting period.

(f)  A copy of any report required under this section shall be retained by the reporting transfer agent for a period of not less than three years, the first year in an easily accessible place.

[Codified to 17 C.F.R. § 240.17Ad-11]

[Section 240.17Ad-11 added at 48 Fed. Reg. 28247, June 21, 1983, effective September 30, 1983]


[Table of Contents] [Previous Page] [Next Page] [Search]

Last updated September 16, 2013 regs@fdic.gov