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Trust Examination Manual

Section 11- FDIC:Registered Transfer Agent Examination Manual

Table of Contents

A.   Foreword

B.   Introduction

1.   Rationale for Examinations

a.   Public Policy Concerns

b.   The Statutory Framework

C.   Role of the Transfer Agent

1.   Stock Transfer Agent

2.   Stock Registrar

3.   Bond Registrar

4.   Mutual Fund Transfer Agent

D.   Registration of Transfer Agents

1.   Summary Table of Transfer Agent Registration Requirements

2.   Voluntary Registration of Securities

3.   Counting the Number of Shareholders of Record

E.   Registered Transfer Agent Examinations

1.   FDIC Registered Transfer Agent Examination Ratings

a.   Rating Guidelines

b.   Disclosure of Rating

2.   Discussions With Management

3.   Registered Transfer Agent Examination Intervals

4.   Examinations by State Authorities

5.   Limited Scope Examinations and Visitations

6.   Examination Planning

7.   Disclosure of Report of Examination

8.   Workpapers

F.   Registration and Reporting Requirements

1.   FDIC Registration Requirements

a.   Part 341 - Registration of Securities Transfer Agents

i.   Initial Registrations

i(a).   Examples of Initial Registration

ii.   Amendments to Registration

ii(a).   Examples of Registration Amendments

iii.   Deregistration of Registered Transfer Agents

b.   Voluntary Registration of Transfer Agents

2.   SEC Reporting Requirements

a.   Form TA-2

b.   Notice of Assumption or Termination of Transfer Agent Services

i.   Depository Notifications Required

ii.   Contents of Depository Notifications

G.   Management

1.   Securities Transfer Policies

2.   Earnings

3.   Management of Transfer Agent Activities

a.   Organization and Staffing

b.   Parent Holding Company or Affiliate Support Services

c.   Acceptance of New Accounts

d.   Closed Accounts

e.   Account Administration

f.   Account Reviews

g.   Risk Management

4.   Fingerprinting of Personnel

a.   Exemptions from Fingerprinting

b.   Notice Pursuant to Rule 17f-2

c.   Retention of Fingerprinting Related Records

H.   Internal Controls

1.   Controls Governing the Processing of Securities Transfers

a.   Appropriate Person

b.   Consequences of Unauthorized Endorsements or Instructions

c.   Signature Guarantees

i.   Medallion Programs

ii.   SEC Requirements for Signature Guarantees

ii(a).   Standards and Procedures

ii(b).   Rejection of Signature Guarantees

iii.   Liability for Unreasonable Rejection of Guarantees

d.   Controls Over the Overissuance of Securities

i.   Prompt Posting of Securities Transfer Records

i(a).   Prompt Posting Criteria

i(b).   Failure to Promptly Post

ii.   Aged Record Differences

ii(a).   Reports to Issuers

ii(b).   Reports to Regulatory Agency

iii.   Buy-Ins

iii(a)(1).   SEC Requirements

iii(a)(2).   Reports to Issuers

iii(a)(3).   Reports to Regulatory Agency

2.   Safeguarding of Funds and Securities

a.   Physical Security Controls

b.   Segregation of Duties

c.   Vacation Policy

d.   Reconciliation Procedures

e.   Controls Over Securities Certificates

i.   Controls Over Unissued Securities Certificates

ii.   Controls Over Cancelled Securities Certificates

f.   Controls Over Funds and Disbursements

3.   Mail Handling Procedures

a.   Lost Securityholders

4.   Annual Meeting and Proxy Processing Services

I.   Audits

a.   Internal Audits

i.   Frequency and Scope

b.   External Audit

i.   SEC Requirements

b(i)(a).   Exceptions From SEC Requirements

c.   SAS 70 Reports

J.   Transfer Agent Operations

1.   Introduction

2.   Definitions

a.   "Item"

b.   Routine/Non-Routine

c.   Deposit Shipment Control List

d.   Withdrawal Shipment Control List

e.   Made Available

f.   Transfer

g.   Process

h.   Receipt

i.   Business Day

3.   Exempt Transfer Agents

4.   Turnaround Performance

5.   Turnaround, Processing, and Forwarding of "Items"

a.   SEC Turnaround Requirements

b.   Exceptions from SEC Turnaround Performance

c.   Failure to Meet Turnaround Standards

i.   Required Reports

ii.   Limitation on Expansion and Other Required Reports

iii.   Stock Exchange Turnaround and Operational Standards

iv.   New York Stock Exchange (NYSE) Rule 496

v.   American Stock Exchange (AMEX) Rule 891

vi.   Written Inquiries and Requests

vii.   Turnaround Standards for Written Inquiries and Requests

vii(a).   Inquiries and Requests from Persons

vii(b).   Inquiries and Requests from Broker-Dealers

vii(c).   Written Inquiries Concerning Dividend and Interest Payments

vii(d).   Summary of Timeframes for Written Inquiries

vii(e).   Recordkeeping

vii(f).   Daily Transactions

vii(g).   Monthly Transactions

vii(h).   Outside Registrars

vii(i).   Turnaround Performance

vii(j).   Written Inquiries

vii(k).   Appointment Documentation

vii(l).   Other Records

vii(l)(1).   Transfer Restrictions

vii(l)(2).   Journals

vii(l)(3).   Control Book

vii(l)(4).   Cancelled Certificates

vii(m).   Record Retention

vii(m)(1).   Two Years - Six Months Easily Accessible

vii(m)(2).   Two Years - First Year Easily Accessible

vii(m)(3).   Three Years - First Year Easily Accessible

vii(m)(4).   Easily Accessible After Termination

vii(m)(5).   Six Years - First Year Easily Accessible

vii(m)(6).   Upon Termination of Appointment

vii(m)(7).   Electronic and Micrographic Recordkeeping

vii(n).   Access to Records


    Last Updated 05/10/2005

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