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SECURITIES AND EXCHANGE COMMISSION

17 CFR Part 240

[Release No. 34-106246; File No. S7-2026-30]

RIN 3235-AL55

Transfer Agent Rules

AGENCY: Securities and Exchange Commission.

ACTION: Proposed rule.

SUMMARY: The U.S. Securities and Exchange Commission (“SEC” or “Commission”) is

proposing to adopt new rules, amend existing rules, amend the existing form for registration with

the Commission as a transfer agent (Form TA-1) and the existing form for reporting activities of

transfer agents (Form TA-2), and rescind an existing rule governing registered transfer agents.

The proposals are designed to modernize the rules governing registered transfer agents.

DATES: This release was published in the Federal Register on September 4, 2026. Comments

should be received on or before November 3, 2026.

ADDRESSES: Comments may be submitted by any of the following methods:

Electronic Comments:

•

Use the Commission’s internet comment form (https://www.sec.gov/comments/s7-202630/transfer-agent-rules); or

•

Send an email to rule-comments@sec.gov. Please include File Number S7-2026-30 on

the subject line.

Paper Comments:

•

Send paper comments to Vanessa A. Countryman, Secretary, Securities and Exchange

Commission, 100 F Street NE, Washington, DC 20549-1090.

All submissions should refer to File Number S7-2026-30. This file number should be

included on the subject line if email is used. To help the Commission process and review your

comments more efficiently, please use only one method of submission. The Commission will

post all comments on the Commission’s website (https://www.sec.gov/rules-regulations/publiccomments/s7-2026-30). Do not include personally identifiable information in submissions; you

should submit only information that you wish to make available publicly. The Commission may

redact in part or withhold entirely from publication submitted material that is obscene or subject

to copyright protection.

Studies, memoranda, or other substantive items may be added by the Commission or staff

to the comment file during this rulemaking. A notification of the inclusion in the comment file of

any such materials will be made available on the Commission’s website. To ensure direct

electronic receipt of such notifications, sign up through the “Stay Connected” option at

www.sec.gov to receive notifications by email.

A summary of the proposal of not more than 100 words is posted on the Commission’s

website (https://www.sec.gov/rules-regulations/2026/09/s7-2026-30).

FOR FURTHER INFORMATION CONTACT: Elizabeth Fitzgerald, Assistant Director, Tina

Barry and Kevin Schopp, Senior Special Counsels, Bryant Eng, Ron Carny, or Scott Farnin,

Special Counsels, Office of Clearance and Settlement at (202) 551-6706, Division of Trading

and Markets, U.S. Securities and Exchange Commission, 100 F Street, N.E., Washington, DC

20549-7010.

SUPPLEMENTARY INFORMATION: The Commission is proposing to amend, rescind, or

add the following rules and forms.1

Commission Reference

Securities Exchange

Form TA-1

Act of 1934

(“Exchange Act” or

Form TA-2

“Act”)2

Rule 17ac2-1

Rule 17ac2-2

Rule 17ad-1

Rule 17ad-2

Rule 17ad-3

Rule 17ad-4

Rule 17ad-6

Rule 17ad-7

Rule 17ad-9

Rule 17ad-10

Rule 17ad-11

Rule 17ad-12

Rule 17ad-13

Rule 17ad-17

Rule 17ad-30

Rule 17ad-31

CFR Citation (17 CFR)

Referenced in 17 CFR

249b.100

Referenced in 17 CFR

249b.102

17 CFR 240.17Ac2-1

17 CFR 240.17Ac2-2

17 CFR 240.17Ad-1

17 CFR 240.17Ad-2

17 CFR 240.17Ad-3

17 CFR 240.17Ad-4

17 CFR 240.17Ad-6

17 CFR 240.17ad-7

17 CFR 240.17Ad-9

17 CFR 240.17Ad-10

17 CFR 240.17Ad-11

17 CFR 240.17Ad-12

17 CFR 240.17Ad-13

17 CFR 240.17Ad-17

17 CFR 240.17ad-30

17 CFR 240.17ad-31

Proposal

Amend

Rescind

Amend

Add

We are also proposing to modify the CFR designations for each of the rules in this release (other than the

CFR designation for Rule 17ad-7 which has already been amended) to ensure the regulatory text conforms

with section 2.13 of the Document Drafting Handbook. See 1 CFR 21.11; Office of the Federal Register,

Document Drafting Handbook (Aug. 2018 Edition, Revision 2.1, dated Oct. 2023),

https://www.archives.gov/files/federal-register/write/handbook/ddh.pdf. Because each of these rules

contain an uppercase letter in their CFR citations, if adopted, the proposed rules would modify the CFR

section designations at adoption to replace each such uppercase letter with the corresponding lowercase

letter. The new rules being proposed in this release are being proposed with the appropriate lowercase

letter, for example, Rule 17ad-30 is being proposed as 17 CFR 240.17ad-30 rather than 17 CFR 240.17Ad30.

15 U.S.C. 78a et seq.

TABLE OF CONTENTS

II.

III.

IV.

Introduction ....................................................................................................................... 6

Background Regarding Securities Ownership ...................................................... 10

Transfer Agent Regulation.................................................................................... 13

Evolution of Transfer Agent Activities................................................................. 21

Overview of the Proposal...................................................................................... 29

Proposed Amendments to Registration and Annual Reporting Requirements ........ 30

Proposed Amendments to Rule 17ac2-1 ............................................................... 33

Proposed Amendments to Rule 17ac2-2 ............................................................... 34

Proposed Amendments to Form TA-1 .................................................................. 35

Proposed Amendments to Form TA-2 .................................................................. 50

Proposed Amendments to Definitions, Processing, Recordkeeping, and

Safeguarding Rules ......................................................................................................... 69

Amendments to Rule 17ad-1 ................................................................................ 71

Amendments to Rule 17ad-9 ................................................................................ 76

New Definitions to be Added to Rule 17ad-9 ....................................................... 93

Amendments to Rule 17ad-2 .............................................................................. 104

Amendments to Rule 17ad-3 .............................................................................. 117

Rescission of Rule 17ad-4 .................................................................................. 120

Amendments to Rule 17ad-6 .............................................................................. 126

Amendments to Rule 17ad-7 .............................................................................. 140

Amendments to Rule 17ad-10 ............................................................................ 165

Amendments to Rule 17ad-12 ............................................................................ 175

Amendments to Rule 17ad-17 ............................................................................ 186

Proposed New Rules ..................................................................................................... 194

VI.

VII.

Proposed Rule 17ad-30: Compliance.................................................................. 194

Proposed Rule 17ad-31: Restrictive Legends ..................................................... 201

Economic Analysis ........................................................................................................ 210

Introduction ......................................................................................................... 210

Economic Baseline.............................................................................................. 213

Benefits and Costs............................................................................................... 242

Efficiency, Competition, and Capital Formation ................................................ 321

Reasonable Alternatives...................................................................................... 330

Request for Comment ......................................................................................... 345

Paperwork Reduction Act ............................................................................................ 355

Summary of the Collection of Information ......................................................... 355

Amendments to Forms TA-1, TA-2 and Rules 17ac2-1, 17ac2-2, 17ad-2, 17ad-3,

17ad-6, 17ad-7, 17ad-12, 17ad-17, 17ad-30, and 17ad-31. ................................ 356

Summary of the Estimated Burden of the Proposed Amendments on the

Collections of Information .................................................................................. 358

Initial and Ongoing Burden Estimates ................................................................ 362

Incremental and Aggregate Burden and Cost Estimate ...................................... 363

Request for Comment ......................................................................................... 369

Initial Regulatory Flexibility Act Analysis ................................................................. 370

VIII. Congressional Review Act ............................................................................................ 376

IX.

Other Matters ................................................................................................................ 377

Statutory Authority and Text of Proposed Rules .................................................................. 377

I. Introduction

Transfer agents are a key component of the national clearance and settlement system,

performing critical functions related to the securities lifecycle that help protect investors and

support the prompt and accurate processing of securities transactions. Their statutory functions

as defined under Section 3(a)(25) of the Securities Exchange Act of 1934 (“Exchange Act” or

“Act”) include countersigning securities upon issuance, monitoring for overissuance, registering

the transfer of securities, exchanging or converting securities, and transferring record ownership

of securities by bookkeeping entry.3 Collectively, these functions help ensure that securities

ownership records remain accurate and that investors and other securities markets participants

can rely on the accuracy, integrity, and safety of the clearance and settlement process throughout

the securities lifecycle.

The Commission first adopted the majority of the federal transfer agent rules in the late

1970s and early 1980s.4 At that time, the majority of investors held their securities in certificated

(i.e., paper) form. The transfer agent industry was characterized by a mix of small firms and

public company issuers acting as their own transfer agent, and transfer agents primarily provided

manual processing of certificates and related recordkeeping functions that some industry

observers viewed as purely ministerial.

Transfer agents have adapted to the complex, interconnected electronic securities markets

of today in numerous ways, including by providing a broad suite of services.5 For example, in

Exchange Act Section 3(a)(25)(A)-(E), 15 U.S.C. 78c(a)(25)(A)-(E).

The Commission provided a detailed history of those rules, and the market developments that led to those

rules, in a 2015 concept release. See Transfer Agent Regulations, Exchange Act Release No. 76743 (Dec.

22, 2015), 80 FR 81948 (Dec. 31, 2015) (“2015 Concept Release”) for an overview of the history of the

Commission’s transfer agent rules.

See Exchange Act Section 17A(a)(1)(A), 15 U.S.C. 78q-1(a)(1)(A).

addition to facilitating the issuance, cancellation, and transfer of both paper and electronic

securities and maintaining the official record of ownership of an issuer’s securities, most transfer

agents also place, track, and remove restrictive legends6 and at least one-third of them are

engaged by issuers to provide administrative, recordkeeping, and processing services related to

the distribution of cash and stock dividends, bond principal and interest, mutual fund

redemptions, and corporate action and other payments to securityholders, what is commonly

referred to as paying agent activity. Transfer agents’ paying agent activity in particular has

grown significantly in the last few decades and continues to grow.7

Many transfer agents function as administrators and third-party information or

technology service providers for mutual funds or direct purchase, dividend reinvestment,

employee stock purchase, retirement, and other issuer-sponsored investment plans.8 In these

roles, transfer agents fulfill such tasks as calculating purchase or sale prices for investors in

mutual funds, aggregating and providing order routing services to handle all aspects of

enrollment and ongoing account servicing, enhancing securityholder communications, and

performing paying agent services specific to funds and plans.

Modern transfer agents may offer other ancillary services as well, including annual

meeting and proxy services such as electronic proxy delivery, notice and access consulting,

internet and phone voting, and proxy tabulation; strategic shareholder consulting services to

corporations and shareholder groups working to influence corporate strategy; communication

services such as promotion campaigns, loyalty programs, and communication services with

For additional discussion of transfer agents’ role with respect to restrictive legends, see 2015 Concept

Release, supra note 4, Section VI.D.

See infra Section III.J.

See, e.g., 2015 Concept Release, supra note 4, Section VII.E.1, discussing the practice of voluntary

registration as transfer agents by certain third-party administrators (“TPA”).

brokers and fund managers; global capital markets services such as access to international

markets and cross border transactions; corporate trust services; corporate restructuring and class

action administration services; and corporate action consulting. A transfer agent’s failure to

perform its statutory functions and related services promptly, accurately, and safely can

compromise the accuracy of an issuer’s securityholder records, disrupt the channels of

communication between issuers and securityholders, disenfranchise investors, and expose

issuers, investors, securities intermediaries, and the securities markets as a whole to significant

financial loss.9

As technology and the securities markets continue to evolve, transfer agents are

increasingly operating at the frontier of rapidly developing technologies, including tokenized

securities, artificial intelligence (“AI”), and other forms of digital infrastructure. For example,

market participants are actively seeking to bring blockchain-native, or “onchain” transfer agents

into the U.S. market, with some firms developing models for blockchain-based recordkeeping,

tokenized fund administration, and cross-chain interoperability that would require transfer agents

to maintain issuer and securityholder records on distributed ledgers and deploy and administer

smart-contract-driven processes. At the same time, rapid technological change—ranging from

tokenization initiatives, to cloud-based systems, to AI-enabled operational tools—has the

potential to reshape core clearance, settlement, and transfer functions across the market

ecosystem. Transfer agents interacting with tokenized securities, distributed ledger technologies,

and smart contracts must increasingly manage risks relating to blockchain data integrity, security

See Maintenance of Accurate Securityholder Files and Safeguarding of Funds and Securities by Registered

Transfer Agents, Exchange Act Release No. 19142 (Oct. 15, 1982), 47 FR 47269 (Oct. 25, 1982) (“17ad-9

through 13 Proposing Release”) (noting examples of substandard transfer agent performance presenting

significant potential adverse consequences); see also Processing Requirements for Cancelled Security

Certificates, Exchange Act Release No. 48931 (Dec. 16, 2003), 68 FR 74390, 74391 (Dec. 23, 2003)

(noting examples of substandard transfer agent performance and significant adverse consequences).

of tokenized securities, and distributed ledger operational models, while those adopting AI or

automated technologies must ensure proper controls, accurate representations of system

capabilities, and effective oversight of automated processes. These developments place transfer

agents in an increasingly central role in safeguarding investor records, issuing and supporting

tokenized securities, and ensuring resiliency against operational and cybersecurity risks within

the rapidly evolving technological landscape comprising the U.S. securities markets.

Despite these developments, the Commission’s transfer agent rules have not been

substantively updated since the first rules were adopted in the late 1970s and early 1980s. As a

result, these rules do not sufficiently address the risks presented by the wide range of processing,

recordkeeping, safeguarding, paying agent, and other services that characterize modern transfer

agents’ businesses, much less the risks posed by transfer agents’ central role in the evolving

blockchain-based, AI-driven landscape. For example, despite the highly sophisticated electronic

and automated systems utilized by modern transfer agents, including transfer agents that are

essentially enterprise software providers, the current transfer agent rules are silent with respect to

information security, cybersecurity, disaster recovery, operational risk, or other requirements

related to their use of connected and automated electronic systems. And although transfer agents

play a critical role in placing, tracking, and removing restrictive legends to facilitate

distributions, there are no Commission rules specifying transfer agents’ obligations in connection

with removing restrictive legends on securities.

Collectively, based on these changes the Commission concludes that there is a disconnect

between the transfer agent rules that have been in place for decades and both the manner in

which transfer agents perform their critical functions and the technology they use to do so. At

the same time, transfer agents now perform a more diverse array of functions and services, many

of which may not be adequately addressed by the transfer agent rules. As the pace of

technological innovation and advancement within the securities markets continues to accelerate,

the gap between the Commission’s transfer agent rules and the risks posed by transfer agents’

activities and role within the national clearance and settlement system continues to widen.

In this release, the Commission is proposing a targeted set of amended and new rules to

ensure that the Commission’s transfer agent rules continue to protect investors, support the

public interest, and facilitate the safe and efficient functioning of the national clearance and

settlement system. The Commission is soliciting public comment on each of the proposals in

this release. Public feedback and data would help the Commission ensure that any regulatory

action will be in the public interest and will help protect investors, the markets, and the national

clearance and settlement system.

A. Background Regarding Securities Ownership

Investment securities confer certain intangible rights and benefits upon the holder.10 In

the past, the most common way to transfer investment securities, such as shares of stock, was to

transfer a paper certificate that represents the benefits of ownership (“certificated security”).11

Certificated securities are evidence that the owner is registered on the books of the issuer (or its

transfer agent) as a securityholder.12 Although the shares themselves represent an intangible

Egon Guttman, Modern Securities Transfers § 1:5 (4th ed. 2010).

The Uniform Commercial Code (“UCC”) defines a “certificated security” as “a security that is represented

by a certificate.” U.C.C. 8-102(a)(4). The UCC, which was first published in 1952, is a uniform act

designed to standardize the law of sales and other commercial transactions in all 50 states. The UCC has

the effect of law only when adopted by a state, and while it has been adopted by all 50 states, there are

numerous state-by-state variations in the adopted texts.

Guttman § 1:5.

right,13 the certificate is a negotiable instrument under state law, which allows the registered

owner of the certificated security to transfer the bundle of intangible rights to a third party.14

The transfer of certificated securities held by registered owners was a time-consuming

manual process for transfer agents. In 1977 the concept of the “uncertificated security” was

introduced in Article 8 of the Uniform Commercial Code (“UCC”).15 This innovation allowed

issuers to issue uncertificated (i.e., certificateless) book-entry securities, the transfer of which is

greatly simplified compared to the transfer of certificated securities because transfer can be

effected by simply registering the transferee’s name on the books of the issuer.16

Under the current centralized depository model in the United States, there are two types

of securities owners: (a) registered securityholders and (b) beneficial owners. Registered

securityholders (who may also be referred to as “holders of record”)17 own and hold securities in

“registered form.”18 The UCC provides that an “issuer…may treat the registered owner as the

person exclusively entitled to vote, receive notifications, and otherwise exercise all the rights and

powers of an owner.”19 Registered securityholders are listed directly on the records of the issuer

Id.

Guttman § 1:12.

See U.C.C. 8-102(a)(18) (defining new term uncertificated security as “a security that is not represented by

a certificate”); see also Egon Guttman, Toward the Uncertificated Security: A Congressional Leap for

States to Follow, 37 Wash. & Lee L. Rev. 717, 729-32 (1980).

Guttman § 6:4.

See Exchange Act Rule 17ad-9(a)(3), 17 CFR 240.17Ad-9(a)(3) (referring to “securityholder’s

registration”); Exchange Act Rule17ad-9(a)(4), 17 CFR 240.17Ad-9(a)(4) (referring to “registered

securityholder”); Exchange Act Rule 12g5-1, 17 CFR 240.12g5-1 (“securities shall be deemed to be ‘held

of record’ by each person who is identified as the owner of such securities on records of security holders

maintained by or on behalf of the issuer”).

See U.C.C. 8-102(a)(13). (“‘Registered form,’ as applied to a certificated security, means a form in which:

(i) the security certificate specifies a person entitled to the security; and (ii) a transfer of the security may be

registered upon books maintained for that purpose by or on behalf of the issuer, or the security certificate so

states.”).

U.C.C. 8-207.

or the issuer’s transfer agent under their own names, and can hold their securities either in

certificated form or in uncertificated (i.e., book-entry) form.20

The vast majority of securityholders in the U.S. are beneficial owners rather than

registered owners.21 Beneficial owners do not own the securities directly but generally have

purchased them through an intermediary, such as a broker or a bank, and determined to hold

them in street name through a book-entry account with that intermediary. Securities held in

street name are legally owned by and registered in the name of the depository’s nominee (most

often DTC’s nominee, Cede & Co.). The individual investor’s broker (or other intermediary)

who is a member or participant of the depository will be identified on the books of the depository

as having a “security entitlement”22 to, or an interest in, a pro rata share of the fungible bulk of

that security held by the depository.23 Correspondingly, the individual investor will be identified

Historically, the Direct Registration System (“DRS”) operated by the Depository Trust Company (“DTC”)

has been the predominant form of holding uncertificated securities in registered form, however, in recent

years, other forms of registered ownership such as tokenization have become available. Regardless of the

specific format that a registered securityholder’s securities take, a registered securityholder’s options for

holding uncertificated securities, through DRS, tokenization, or otherwise, will be subject to the issuer’s

governing documents and the law of its jurisdiction of organization, as well as to other legal requirements

that may apply to the issuer, such as rules of self-regulatory organizations (“SROs”) such as DTC and

national securities exchanges.

For more information regarding beneficial ownership, see, e.g., Concept Release On The U.S. Proxy

System, Exchange Act Release No. 62495 (July 14, 2010), 75 FR 42982 (July 22, 2010) (“Proxy Concept

Release”); Investor Bulletin: Holding Your Securities, SEC, available at

http://www.sec.gov/investor/pubs/holdsec.htm (last visited May 22, 2026).

See U.C.C. 8-102(a)(7) (defining “entitlement holder” as a person identified in the records of a securities

intermediary as the person having a security entitlement against the securities intermediary); U.C.C 8102(a)(17) (defining “security entitlement”); U.C.C. 8-102(a)(14) (defining “securities intermediary” as (i)

a clearing corporation or (ii) a person, including a bank or broker, that in the ordinary course of its business

maintains securities accounts for others and is acting in that capacity); U.C.C. 8-503(b) (providing that an

entitlement holder’s property interest with respect to a particular financial asset under [U.C.C. 8-503(a)] is

a pro rata property interest in all interests in that financial asset held by the securities intermediary).

For securities held in “fungible bulk,” there are no specifically identifiable shares directly owned by DTC

participants. Rather, each participant owns a pro rata interest in the aggregate number of shares of a

particular issuer held at DTC. In turn, each customer, such as an individual investor of a DTC participant,

owns a pro rata interest in the shares in which the DTC participant has an interest. See Processing of

Tender Offers Within the National Clearance and Settlement System, Exchange Act Release No. 19678, n.5

on the books of the depository participant (i.e., the investor’s broker or other intermediary) as

having a security entitlement to a pro rata share of the securities in which the participant has an

interest. At each level, the intermediary will be obligated to provide the entitlement holder with

payments and distributions with respect to the financial asset and to exercise rights as directed by

the entitlement holder.24 A securities intermediary satisfies such duties where the intermediary

acts as required by any agreement between the intermediary and entitlement holder.25 The

entitlement holder will be permitted to look only to the intermediary for performance of the

obligations.26

B. Transfer Agent Regulation

Prior to 1975, most transfer agents were banks or trusts.27 There was no federal

regulation of transfer agents and transfer agents were subject to state law, generally pursuant to

UCC provisions. Transfer agents were also subject to stock exchange requirements regarding

securities processing.

(Apr. 15, 1983), 48 FR 17603, 17605, n.5 (Apr. 25, 1983) (describing fungible bulk); Office of Investor

Education and Advocacy, Investor Bulletin: DTC Chills and Freezes, SEC (May 2012), available at

https://www.sec.gov/investor/alerts/dtcfreezes.pdf (discussing fungible bulk).

U.C.C. 8-505, 506.

U.C.C. 8-505(a)(1), 506(1). In the absence of an agreement covering payments and distributions, the

securities intermediary must exercise due care in accordance with reasonable commercial standards. In the

absence of an agreement with respect to the exercise of rights as directed by the entitlement holder, the

securities intermediary either must place the entitlement holder in a position to exercise the rights directly

or exercise due care in accordance with reasonable commercial standards to follow the direction of the

entitlement holder. U.C.C. 8-505(a)(2), 506(2).

U.C.C. 8-503(c) (referring only to “securities intermediar[ies]” with respect to enforcement rights that may

be exercised by an entitlement holder).

SEC, Study of Unsafe and Unsound Practices of Brokers and Dealers, H.R. Doc. No. 92-231, at 38.

Transfer agents that are not banks may be referred to as non-bank transfer agents.

Following the Paperwork Crisis, as discussed in more detail in the 2015 Concept Release,

in 1975, Congress enacted the Securities Acts Amendments (the “1975 Amendments”),28 which

made sweeping changes to the federal securities laws, implemented many of the principal

recommendations from the Securities Industry Study,29 and established both the national market

system30 and the national clearance and settlement system as they exist today.31 Specifically,

Congress directed the Commission to, among other things: (i) “facilitate the establishment of a

national system for the prompt and accurate clearance and settlement of transactions in

securities;”32 (ii) “end the physical movement of securities certificates in connection with the

settlement among brokers and dealers of transactions in securities;”33 and (iii) establish a system

for reporting missing, lost, counterfeit, and stolen securities.34

The 1975 Amendments gave the Commission regulatory authority for the first time over

transfer agents. Section 3(a)(25) of the Exchange Act defines a “transfer agent” as any person

who engages on behalf of an issuer of securities or on behalf of itself as an issuer of securities in:

(A)

countersigning such securities upon issuance;

(B)

monitoring the issuance of such securities with a view to preventing

unauthorized issuance (i.e., a registrar);

Securities Acts Amendments of 1975, Pub. L. No. 94-29, 89 Stat. 97 (1975); see also S. Rep. No. 75, at 7

(1975).

Securities Industry Study, H.R. Rep. No. 92-1519, 64 (1972). The Senate Subcommittee on Securities

conducted the Securities Industry Study to determine the causes of the Paperwork Crisis and recommend

solutions. The Securities Industry Study ultimately led to Congress enacting the 1975 Amendments. See

2015 Concept Release, supra note 4, at 81954.

Section 11A of the Exchange Act directed the Commission to facilitate the establishment of a national

market system to link together the multiple individual markets that trade securities and achieve the

objectives of efficient, competitive, fair, and orderly markets, that are in the public interest and protect

investors. See Exchange Act Section 11A(a)(2), 15 U.S.C. 78k-1(a)(2).

See Exchange Act Section 17A(a)(2), 15 U.S.C. 78q-1(a)(2).

Exchange Act Section 17A(a)(2)(A)(i), 15 U.S.C. 78q-1(a)(2)(A)(i).

Exchange Act Section 17A(e), 15 U.S.C. 78q-1(e).

Exchange Act Section 17(f)(1), 15 U.S.C. 78q(f)(1).

(C)

registering the transfer of such securities;

(D)

exchanging or converting such securities; or

(E)

transferring record ownership of securities by bookkeeping entry without

the physical issuance of securities certificates.35

Section 17A(c)(1) of the Exchange Act requires any person performing any of these

functions with respect to any security registered pursuant to Section 12 of the Exchange Act or

with respect to any security which would be required to be registered except for the exemption

contained in subsection (g)(2)(B) or (g)(2)(G) of Section 12 (“Qualifying Security”) to register

with the Commission or other Appropriate Regulatory Agency (“ARA”).36 With respect to any

transfer agent so registered, Section 17A(d)(1) of the Exchange Act authorizes the Commission

to prescribe such rules and regulations as may be necessary or appropriate in the public interest,

for the protection of investors, or otherwise in furtherance of the purposes of the Exchange Act.37

Beginning in the late 1970s and early 1980s, the Commission adopted a series of transfer

agent rules designed to regulate the basic recordkeeping and processing functions performed by

transfer agents. The rules primarily related to routine transfers of certificated equity and debt

securities and generally covered three areas: (i) registration and annual reporting requirements;

(ii) timing and certain notice and reporting requirements related to securities transaction

processing (referred to as “turnaround rules”); and (iii) recordkeeping and record retention rules

and safeguarding requirements for securities and funds.

Exchange Act Section 3(a)(25), 15 U.S.C. 78c(a)(25). Note that any insurance company or separate

account which performs such functions solely with respect to variable annuity contracts or variable life

policies which it issues or any registered clearing agency which performs such functions solely with respect

to options contracts which it issues is excluded from the definition of “transfer agent” under the Exchange

Act. Id.

Exchange Act Section 17A(c)(1), 15 U.S.C. 78q-1(c)(1).

Exchange Act Section 17A(d)(1), 15 U.S.C. 78q-1(d)(1).

Although the Commission has made modest revisions to the initial transfer agent rules

and has added several new rules since the adoption of those earlier rules, the core registration,

processing, recordkeeping, and safeguarding rules remain substantially unchanged, and the

exemptions for mutual funds, dividend reinvestment plans (“DRIPs”), and limited partnerships

have not been revisited.

1. Registration and Annual Reporting Requirements (Rules 17ac2-1 and

Form TA-1, Rule 17ac2-2 and Form TA-2)

Before a transfer agent may perform any of the statutory transfer agent functions defined

in Section 3(a)(25) of the Exchange Act for a Qualifying Security, it must apply for registration

by submitting Form TA-1 (Uniform Form for Registration as a Transfer Agent and for

Amendment to Registration) to its ARA, and its registration as a transfer agent with its ARA

must have become effective.38 Form TA-1 requires a transfer agent seeking to register to

disclose certain information, including the following: basic information about the registrant,

transfer agent service company arrangements, control persons and owners, and any investmentrelated criminal prosecutions, regulatory actions, or civil actions to which its control persons or

affiliates have been subject.39 The registration automatically becomes effective 30 days after the

Form TA-1 is filed, unless the ARA takes affirmative action to accelerate, deny, or postpone

Exchange Act Section 17A(c)(1), 15 U.S.C. 78q-1(c)(1); Exchange Act Rule 17ac2-1, 17 CFR 240.17Ac21; SEC Form TA-1, 17 CFR 249b.100. Once registration has become effective, a transfer agent may be

subject to censure, suspension, limitation, or revocation of its registration if the transfer agent or any person

associated with the transfer agent fails to obey Commission rules or violates certain of the securities laws.

Exchange Act Section 17A(c)(3), 15 U.S.C. 78q-1(c)(3); Exchange Act Section 17A(c)(4)(C), 15 U.S.C.

78q-1(c)(4)(C).

Basic identification information about the registrant includes information such as name, contact person,

phone number, address, email address, identification numbers including the transfer agent’s file number

and Financial Industry Number Standard (“FINS”) number, and whether the transfer agent solely provides

services to its own securities or those of an affiliate. See Form TA-1, 17 CFR 249b.100.

registration in accordance with the provisions of Section 17A(c) of the Exchange Act.40 A

registrant must amend its Form TA-1 within 60 days following the date on which information

reported therein becomes inaccurate, incomplete, or misleading.41

All registered transfer agents, regardless of their ARA, must file an annual report with the

Commission using Form TA-2 (Form for Reporting Activities of Transfer Agents Registered

Pursuant to Section 17A of the Securities Exchange Act of 1934).42 Form TA-2 covers a

calendar year reporting period that ends on December 3143 and must be filed by March 31 of the

year following the end of the reporting period.44

Form TA-2 requires transfer agents to identify and report on the use of service

companies, or other transfer agents, in connection with their transfer agent activities. It also

requires transfer agents to provide annual data regarding the transfer agent’s compliance with the

turnaround rules. Additionally, the form requires transfer agents to provide the Commission with

updated information about their business activities, including accounts administered, items

Exchange Act Rule 17ac2-1(a), 17 CFR 240.17Ac2-1(a); SEC Form TA-1, General Instruction G, 17 CFR

249b.100. Note that the 30-day time period in Exchange Act Rule 17ac2-1(a), 17 CFR 240.17Ac2-1(a), is

shorter than the Exchange Act’s 45-day time period for applications to be effective. Exchange Act Section

17A(c)(2), 15 U.S.C. 78q-1(c)(2).

Exchange Act Rule 17ac2-1(c), 17 CFR 240.17Ac2-1(c); SEC Form TA-1, General Instruction H, 17 CFR

249b.100. For transfer agents for whom the Commission is their ARA, they must file Form TA-1 and

amendments thereto electronically on the Commission’s EDGAR system and each answer provided by the

transfer agent is required to be formatted in an eXtensible Markup Language (“XML”) data language.

Exchange Act Rule 17ac2-1(d), 17 CFR 240.17Ac2-1(d); Electronic Filing of Transfer Agent Forms,

Exchange Act Release No. 54864, 5 (Dec. 4, 2006), 71 FR 74698 (Dec. 12, 2006) (“Electronic Filing of

Transfer Agent Forms Release”).

Exchange Act Rule 17ac2-2(a), 17 CFR 240.17Ac2-2(a); SEC Form TA-2, 17 CFR 249b.102 (Form for

Reporting Activities of Transfer Agents Registered Pursuant to Section 17A of the Securities Exchange Act

of 1934).

Exchange Act Rule 17ac-2-2(b), 17 CFR 240.17Ac2-2(b).

Form TA-2 must be filed electronically on the Commission’s EDGAR system, and each answer provided

by the transfer agent is required to be formatted in an XML data language. Exchange Act Rule 17ac2-2(c),

17 CFR 240.17Ac2-2(c); Electronic Filing of Transfer Agent Forms Release, supra note 41, at 5.

received,45 turnaround performance, total amounts of funds distributed, and lost securityholder

accounts.46 Rule 17ac2-2 provides exemptions from completing certain sections of Form TA-2

for small transfer agents and for transfer agents that outsource their work completely to service

companies.47

The Commission, other ARAs, their respective staff, and members of the public

(including issuers and investors) use information on Forms TA-1 and TA-2. The Commission’s

Electronic Data Gathering, Analysis, and Retrieval (“EDGAR”) database provides a means

through which information on these forms can be searched and retrieved. The Commission uses

the information on Form TA-1 to review an entity’s application for registration as a transfer agent

and to maintain current information about transfer agents. The Commission uses information on

Form TA-2, as well as information on Form TA-1 and amendments thereto, for several purposes,

including: (i) to determine the nature of the business conducted by a transfer agent, (ii) to review

transfer agent activities and to evaluate compliance with Commission rules, and (iii) to inform

Commission transfer agent policymaking.48 The Commission’s Division of Examinations may

use the information on Forms TA-1 and TA-2 to help identify risks and better understand a

transfer agent’s business during an examination. Commission staff may also use the information

See generally, Section III.A.1 for discussion of “item.”

See generally, SEC Form TA-2, 17 CFR 249b.102.

Specifically, if a registered transfer agent received fewer than 1,000 items for transfer in the reporting

period and did not maintain master securityholder files for more than 1,000 individual securityholder

accounts as of December 31 of the reporting period, it is only required to complete Questions 1 through 5,

11, and the signature section of Form TA-2. Exchange Act Rule 17ac2-2(a)(1), 17 CFR 240.17Ac22(a)(1). A named transfer agent that engaged a service company to perform all of its transfer agent

functions during the reporting period is only required to complete Questions 1 through 3 and the signature

section of Form TA-2. Exchange Act Rule 17ac2-2(a)(2), 17 CFR 240.17Ac2-2(a)(2).

See Adoption of Revised Transfer Agent Forms and Related Rules, Exchange Act Release No. 23084 (Mar.

27, 1986), 51 FR 12124 (Apr. 9, 1986) (“Revised Transfer Agent Forms and Related Rules”); Electronic

Filing of Transfer Agent Forms Release, supra note 41, at 5.

on Forms TA-1 and TA-2 to analyze industry trends and to provide basic census information

concerning registered transfer agents. In addition, Form TA-1 and TA-2 data provide the

Commission with information about securities processing issues that may need to be addressed

by Commission rulemaking. Form TA-1 and TA-2 data is also used by the Commission to assist

it in evaluating the costs and benefits of potential rulemaking.

2. Processing, Reporting, Recordkeeping, and Exemptions: Rules 17ad-1

through 17ad-7

On June 16, 1977, the Commission adopted Rules 17ad-1 through 17ad-7 as a set of

performance standards for transfer agents.49 These turnaround and processing rules were

“designed to protect investors . . . and to contribute to the establishment of the national system

for the prompt and accurate clearance and settlement of transactions in securities by,” among

other things, “assuring that the transfer agent community performs its functions in a prompt,

accurate and more predictable manner.” The rules primarily focused on establishing minimum

performance and recordkeeping standards for routine transfers of certificated equity and debt

securities and the prompt and accurate cancellation and issuance of certificated securities.50 The

rules were also designed to provide an early warning system to alert issuers and regulatory

agencies when the performance standards are not being met, prohibit under-performing transfer

agents from expanding their operations, require transfer agents to respond promptly to certain

written inquiries regarding items presented for transfer, and require the maintenance and

preservation of certain records necessary for regulatory authorities to examine and enforce

transfer agent compliance with the turnaround rules.51 The specific processing, reporting, and

Exchange Act Rules 17ad-1-7, 17 CFR 240.17Ad-1-7.

See Regulation of Transfer Agents, Exchange Act Release No. 13636 (June 16, 1977), 42 FR 32404, 32404

(June 24, 1977) (“Rule 17ad-1 through 17ad-7 Adopting Release”).

Id. See also Exchange Act Rules 17ad-1-7, 17 CFR 240.17Ad-1-7.

retention requirements were metrics-based and, at the time, considered to be those necessary to

ensure that transfer agents adequately performed their functions and that the Commission and

other ARAs would be able to examine transfer agents’ compliance with the turnaround rules.52

Further, the new transfer agent rules established by the Commission were designed not only to

ensure that transfer agents meet prescribed performance standards for their core recordkeeping

and transfer activities, but to ensure they would be regulated appropriately in the context of the

national clearance and settlement system and that any problems meeting these performance

standards would not negatively impact individual investors or the clearance and settlement

system as a whole.53

3. Recordkeeping and Safeguarding Rules: Rules 17Ad-8 through 17ad-13

and 17ad-17

On June 10, 1983, the Commission adopted Rules 17ad-9 through 17ad-13 to supplement

the turnaround rules, based on its experience.54 These new rules established various

requirements and exemptions designed to ensure that transfer agents maintain appropriate

internal controls, meet adequate levels of service and performance, and avoid adverse operational

and financial problems that could harm investors, issuers, or other securities industry

participants. Most notably, the new rules established additional minimum standards for

recordkeeping and codified minimum requirements for the safeguarding of funds and

Rule 17ad-1 through 17ad-7 Adopting Release, supra note 50, at 32410.

Rule 17ad-1 through 17ad-7 Adopting Release, supra note 50, at 32407 (noting the importance of avoiding

impediments to “the Commission’s efforts to provide necessary or appropriate regulations for transfer

agents in the broader context of the establishment of a national system for the prompt and accurate

clearance and settlement of securities transactions.”).

Exchange Act Rules 17ad-9-13, 17 CFR 240.17Ad-9-13

securities.55 The Commission believed that these additional minimum standards were critical to

addressing seriously deficient transfer agent performance.56

Rule 17ad-17 was first adopted in 199757 and later amended at the beginning of 201358

and was designed to ensure that the transfer agents, brokers, dealers, and other financial

intermediaries make adequate efforts to find lost securityholders.59 The rule defines “lost

securityholder” as a securityholder for whom an item of correspondence sent to his or her last

known address was “returned as undeliverable” and requires transfer agents, brokers, and dealers

to conduct two database searches in their efforts to locate a lost securityholder.

C. Evolution of Transfer Agent Activities

This section discusses some of the core recordkeeping, transfer, and other activities that

transfer agents engage in, the manner in which the existing transfer agent rules apply to those

activities, and how those activities have evolved since the first transfer agent rules were adopted.

Since then, the increased use and decreased cost of technology, the expansion of corporate

actions to bring securities into the public market, the continued dematerialization of securities,

and other changes have resulted in significant evolution and changes to the types of services

transfer agents provide and the manner in which they provide them.

See 17ad-9 through 13 Proposing Release, supra note 9.

Id. The Commission was particularly concerned with reducing the potential for transfer agent failure,

which inevitably imposes substantial potential liabilities and costs on issuers, securities firms, and

securityholders, as well as improving generally transfer agent performance, thereby reducing the brokerdealers’ costs associated with fails to settle and extended transfer delays.

Lost Securityholders, Exchange Act Release No. 39176 (Oct. 1, 1997), 62 FR 52229 (Oct. 7, 1997) (“Rule

17ad-17 Adopting Release”).

Lost Securityholders and Unresponsive Payees, Exchange Act Release No. 68668 (Jan. 16, 2013), 78 FR

4768 (Jan. 23, 2013).

Exchange Act Rule 17ad-17, 17 CFR 204.17Ad-17.

1. Recordkeeping

Transfer agents have direct responsibility for maintaining on behalf of the issuer the

currency and integrity of the official list of the registered owners of an issuer’s stocks and bonds,

how those stocks and bonds are held, and how many shares or bonds each investor owns. This

list is defined by Rule 17ad-9(b) as the master securityholder file.60 Without the master

securityholder file, registered owners of an issuer’s securities cannot be assured that they are

recognized as such by the issuer and that they will receive corporate distributions,

communications, and the other rights of security ownership to which they are entitled.61

Transfer agents also maintain and keep current the control book which is defined by Rule

17ad-9(d) as the record of the total number of shares of equity securities or the principal dollar

amount of debt securities authorized and issued by the issuer for each issue the transfer agent

services.62 One of the main purposes of the control book is to allow the transfer agent to monitor

the number of securities outstanding to prevent overissuance because the total number of shares

reflected in the aggregate on the master securityholder file should match the number of shares

authorized in the control book.63

Finally, pursuant to Rule 17ad-6, transfer agents maintain the transfer journal.64 The

transfer journal can be a useful tool for transfer agents and issuers. For example, when reviewed

See Exchange Act Rule 17ad-9(b), 17 CFR 240.17Ad-9(b).

See generally, e.g., Del. Code Ann. tit. 8 §§ 170, 173 (authorizing a corporation to pay cash and stock

dividends under certain circumstances); Exchange Act Rule 14c-3, 17 CFR 240.14c-3 (requirement to

furnish an annual report to securityholders); Del. Code Ann. tit. 8 §212 (providing for voting rights of

stockholders and permitting them to vote by proxy); Del. Code Ann. tit. 8 §222 (requirement to send

stockholder notice in advance of stockholder meeting).

Exchange Act Rule 17ad-9(d), 17 CFR 240.17Ad-9(d).

When monitoring for overissuance, a transfer agent may be referred to as a “registrar.” See Exchange Act

Section 3(a)(25), 15 U.S.C. 78c(a)(25).

Exchange Act Rule 17ad-6, 17 CFR 240.17Ad-6.

in conjunction with the master securityholder file, the transfer journal may provide historical

information regarding the issuance and transfer of a specific security or the holdings of a specific

securityholder. The transfer agent rules do not define transfer journal nor codify requirements

with respect to the transfer journal.

2. Securities Transfers, Exchanges, and Conversions

Transfer agents are integrally involved in effecting transfers of ownership of securities, as

well as exchanging and converting securities.65 For uncertificated securities, transfer agents

effect book-entry transfers by registering the change in ownership on the master securityholder

file, which does not involve the physical issuance and cancelling of securities certificates. The

term “registering” means an official form of recording by a person charged with that function,

which is accomplished under Exchange Act Rules 17ad-9(h) and 17ad-10(a) by updating the

master securityholder file, as discussed above.66 For the transfer of certificated securities,

several rules apply, including Rule 17ad-19 regarding certificate cancellation and Rule 17ad-12

regarding the safeguarding of cancelled certificates.67

3. Securities Issuance

Transfer agents are also involved in the issuance of securities, which may be one of the

final stages before completing a certificate transfer or could involve a primary offering of

The terms “exchange” and “conversion” are used in Exchange Act Section 3(a)(25) and in the

Commission’s transfer agent rules but are not defined in the Commission’s transfer agent rules. The term

“exchange” is commonly used to refer to the trading of specific securities for another asset, usually without

an accompanying change in ownership. The term “conversion” is commonly used to refer to the changing

into or substitution of one security for another security or asset under specific conditions, also without an

accompanying change in ownership.

Book-entry transfer may be accomplished through DTC’s DRS using DTC’s Profile Modification System.

Once the transfer has been effected, the investor receives from the transfer agent a statement of ownership

that acknowledges his or her new DRS position. See supra note 20.

See 2015 Concept Release, supra note 4, at 81972-73 for a more fulsome description of the transfers of

certificated securities.

securities such as an initial public offering. Upon issuing a new security to a transferee, the

transfer agent must credit the securities account of the transferee receiving the new security.

Under Rule 17ad-1(d), posting the new ownership information to the master securityholder file

changes the ownership information of the securities account and “completes registration of

change in ownership of all or a portion of those securities.”

4. Corporate Actions and Related Services

A corporate action is an event in the life of a security, typically instigated by the issuer,

which affects a position in that security.68 Examples of common corporate actions include

changes that affect capital structure, such as a merger or acquisition, and distributions to

securityholders, such as a dividend distribution or principal or interest payment on a debt

security. Corporate actions may also include bankruptcy or liquidation proceedings, conversions,

warrants, exchange offers, subscription rights, tender offers, and other events.69 Generally,

corporate actions can be divided into two broad categories: mandatory and voluntary (sometimes

referred to as “elective”). Mandatory corporate actions usually affect all securityholders equally

and the securityholder does not have different options from which to choose; voluntary corporate

actions usually allow securityholders to choose among one or more different elections they can

make.

Transfer agents may perform a variety of roles and provide a variety of services,

depending on the type and nature of the corporate action. For example, a transfer agent may take

on the role of exchange agent in a mandatory corporate action, such as a stock-for-stock merger

or a cash-for-stock merger. In such circumstances, under Rule 17ad-10, the transfer agent

Simmons and Dalgleish, Corporate Actions: A Guide to Securities Event Management 3-5 (2006).

See id. (categorizing major types of corporate actions).

performing exchange agent services generally must update the master securityholder file with

certificate details within five business days. But because the transfer associated with some of the

most common corporate actions qualify as non-routine items under Rule 17ad-1, including

transfers “in connection with a reorganization, tender offer, exchange, redemption, or

liquidation,”70 the general three business day deadline for turnaround of routine items under Rule

17ad-2 may not apply. However, if a transfer agent makes a determination that a transfer does

fall within Rule 17ad-1(i)(5) and therefore is non-routine, Rule 17ad-6(a)(11) requires the

transfer agent to maintain records documenting the basis for this determination.71 Other aspects

of the processing of the corporate action may cause the corporate action to be classified as nonroutine as well.72

Voluntary corporate actions, which permit securityholders to choose among different

options, may result in the need for additional tasks and systems for transfer agents to process

them. For example, in addition to the ordinary recordkeeping tasks, the transfer agent may be

responsible for monitoring whether elections have been made by deadlines and for tracking such

elections.

In addition to the examples discussed above, transfer agent roles in connection with

corporate actions may also include serving as: (i) tender agent, when the transfer agent collects

shares surrendered from securityholders and makes payments for the shares at a predetermined

price; (ii) exchange agent, when the transfer agent collects shares surrendered from

Exchange Act Rule 17ad-1(i)(5), 17 CFR 240.17Ad-1(i)(5).

A large portion of specific records that transfer agents are required to maintain under Rule 17ad-6 and to

retain for different periods of time under Rule 17ad-7 relate to: (i) the classification of an item as routine or

non-routine; (ii) tracking the compliance of the transfer agent with the performance standards for

turnaround of routine items under Rule 17ad-2(a); and (iii) the performance standards for processing of all

items pursuant to Rule 17ad-2(b).

Exchange Act Rule 17ad-1(i), 17 CFR 240.17Ad-1(i).

securityholders and issues, registers, and/or distributes shares of the bidding company’s

securities as compensation for tendered securities of the subject company; (iii) subscription

agent, when the transfer agent invites existing equity securityholders of an issuer to subscribe to

a new issuance of additional debt or equity of the issuer; (iv) conversion agent, for example

when the transfer agent converts debt securities into equity securities; and (v) escrow agent,

when the transfer agent holds an asset on behalf of one party for delivery to another party upon

specified conditions or events. Finally, transfer agents providing corporate action services may

be subject to Rules 17ad-12 and 17ad-13, regarding safeguarding requirements for funds and

securities and an annual audit of internal control of safeguarding procedures.

5. Annual Meeting, Proxy-Related Services, and Securityholder Services and

Communications

One of the key rights of securityholders is the right to vote their shares on important

matters that affect the companies they own. Pursuant to state corporate law, registered

securityholders may either attend a meeting to vote shares in person or authorize an agent to act

as their “proxy” at the meeting to vote their shares pursuant to their voting instructions.73

Because most securityholders do not physically attend public company securityholder meetings,

the corporate proxy is the principal means by which they exercise their voting rights.

The process in the United States for distributing proxy materials and soliciting,

tabulating, and verifying votes by securityholders is complex, especially with respect to

beneficial securityholders.74 Most corporate issuers and securities intermediaries such as banks

See Del. Code Ann. tit. 8, §212 (b), (c). A full discussion of the proxy system is beyond the scope of this

release. For more information on the proxy system, see Proxy Concept Release, supra note 21.

Beneficial owners holding securities in street name are not technically entitled to vote shares or grant proxy

authority. Rather, the voting rights reside with Cede & Co. as the record owner of all street name shares.

However, because Cede & Co.’s role is only that of nominee for DTC as custodian and it has no beneficial

and brokers rely on a proxy service firm to perform these functions, which may include

distributing and forwarding the proxy materials and collecting and tabulating voting instructions.

Alternatively, some issuers choose to engage their transfer agents for certain parts of the proxy

distribution process, such as printing and distributing proxy materials either directly to registered

securityholders or to intermediaries, which will then distribute them to beneficial owners either

through the mail or electronically. Providing these services may be a natural extension of a

transfer agent’s core functions because most transfer agents will already possess and maintain the

master securityholder file listing the issuer’s registered securityholders, will have the

infrastructure in place to communicate with registered securityholders, and will be in a position

to reconcile the identity of registered voters and the number of votes against the official records

of the issuer.75 Typical transfer agent proxy services might include mailing or electronically

transmitting notices of meetings,76 proxy statements, and proxy cards77 to securityholders.

All transfer agents also provide some level of securityholder communications services.

The level of services may depend on the type or size of the issuer, but at a minimum, most

transfer agents facilitate the mailing of quarterly and annual statements with details of holdings,

transaction confirmations, and letters or communications confirming other transactions, such as

interest in the shares, mechanisms have been developed in order to pass the legal rights it holds as the

record owner to the beneficial owners, enabling them to vote. For a more comprehensive discussion of

these and other issues relating to the U.S. proxy and indirect holding systems, see Proxy Concept Release,

supra note 21.

See Proxy Concept Release, supra note 21.

See, e.g., Del. Code Ann. tit. 8, § 222 (2001). See also Del. Code Ann. tit. 8, § 232 (2001).

In cases where the issuer is relying upon the notice and access model of proxy statement distribution, the

proxy card must be mailed even if the proxy statement is not mailed by the issuer. See Final Rule: Internet

Availability of Proxy Materials, Exchange Act Release No. 55146, 10 (Jan. 22, 2007), 72 FR 4148 (Jan. 29,

2007).

address-change confirmations. Many transfer agents also provide tax reporting services,

including sending tax forms such as W-9, W-8BEN, 1099-DIV, and 1099-B.

Most transfer agents also receive and respond to inquiries and requests by securityholders

and non-securityholders.78 Requests may involve a transfer (for example, a gift of fund shares

from one family member to another) or a change in the securityholder’s account, such as an

address change or different election regarding dividend reinvestment. For transfer agents to

open-end mutual funds, transfers may involve a purchase (i.e., a “subscription”) or sale (i.e., a

“redemption”) of the fund’s shares. Transfer agents may receive inquiries as well, which may

not require processing a transaction or account change, but may involve merely answering

questions about the securityholder’s account or regarding the issuer generally.79 Requests and

inquiries are transmitted to transfer agents through various methods, including by telephone,

mail, facsimile, email, internet, mobile communication device, and in-person. The predominance

of telephone and other forms of electronic communication as favored methods for

securityholders to communicate with issuers and their transfer agents, including the use of

standardized protocols over the internet, means that managing sizable call centers and other

customer service departments, with many representatives fielding calls and other message-traffic,

has become a critical aspect of the transfer agent-issuer relationship.

One aspect of these securityholder services is lost certificate replacement. If a

securityholder loses a certificate, the old certificate must be cancelled and new shares issued,

either in certificated or book-entry form. Transfer agents facilitate this process by processing the

Several Commission rules address securityholder inquiries. See Exchange Act Rule 17ad-5, 17 CFR

240.17Ad-5 (written inquiries and requests); Exchange Act Rules 17ad-6, 7, 17 CFR 240.17Ad-6, 7

(recordkeeping and retention requirements regarding inquiries and requests).

Inquiries about the securityholder’s account may relate, for example, to matters such as dividend

reinvestment or other account options.

request and replacing the lost or missing certificate. Generally, the securityholder will be

required to fill out a declaration, affidavit, or other form with identifying information and a

description of the circumstances giving rise to the loss and pay a fee to the transfer agent for

processing the request. Most transfer agents will also require a surety bond to indemnify the

issuer and transfer agent against any potential losses in connection with the missing or

replacement certificate in the event it is later presented for transfer or conversion. The transfer

agent will then report the lost or missing certificate to the Lost and Stolen Securities Program

operator pursuant to Rule 17f-1.

D. Overview of the Proposal

Based on the Commission’s experience regulating and supervising registered transfer

agents, the Commission is proposing to update the transfer agent rules to address the way in

which modern transfer agents carry out their transfer agent activities and the risks posed by those

activities to investors, the national clearance and settlement system, and the U.S. securities

markets as a whole. Accordingly, as summarized below in Table 1, the Commission is proposing

to update Forms TA-1 and TA-2, amend several existing rules, rescind one rule, and add two new

rules.

Table 1: Overview of Proposed Changes

Overview of Proposed Changes

Amendments to Forms

Form TA-1

Form TA-2

Amendments to Existing Rules

17ac2-1 – Registration

17ac2-2 – Annual Reporting

17ad-1 and 17ad-9 – Definitions

17ad-2 – Turnaround

17ad-3 – Limitations on Expansion

Overview of Proposed Changes

17ad-6 – Recordkeeping

17ad-7 – Record Retention

17ad-10 – Prompt Posting

17ad-11 – Reports (title only)

17ad-12 – Safeguarding

17ad-17 – Lost Securityholders

Rescission of Existing Rule

17ad-4 – Applicability of Rules 17ad-2, 17ad-3, and

17ad-6(a)(1) through (7) and (11)

New Rules

Rule 17ad-30 – Compliance Program

Rule 17ad-31 – Restrictive Legends

II. Proposed Amendments to Registration and Annual Reporting Requirements

Exchange Act Section 17A(c)(2) provides that a transfer agent may be registered by filing

an application in such form and containing such information and documents concerning the

transfer agent and any persons associated with the transfer agent as the ARA may prescribe as

necessary or appropriate in furtherance of the purposes of the Exchange Act.80 As explained

above, those purposes include, among other things, protecting investors, facilitating the prompt

and accurate clearance and settlement of securities transactions, and the safeguarding of funds

and securities.81 Exchange Act Section 17A(d)(1) empowers the Commission with authority to

prescribe for registered transfer agents engaging in any activity as transfer agents such rules and

regulations as necessary or appropriate in the public interest, for the protection of investors, or

otherwise in furtherance of the purposes of the Exchange Act.82 As discussed above, pursuant to

that authority, transfer agents are required to file a Form TA-1 to register as a transfer agent, a

Exchange Act Section 17A(c)(2), 15 U.S.C. 78q-1(c)(2).

See Exchange Act Section 17A(a)(1)(A), 15 U.S.C. 78q-1(a)(1)(A).

Exchange Act Section 17A(d)(1), 15 U.S.C. 78q-1(d)(1).

Form TA-2 each year to provide annual disclosures, and a Form TA-W when they withdraw from

registration.83

The Commission uses the information on Forms TA-1 and TA-2 to fulfill its statutory

duties, including its duty to protect investors, facilitate the establishment of the national market

system and the national clearance and settlement system, and advance the public interest. For

example, Form TA-1 and Form TA-2 are necessary for the Commission to gather sufficient

information to understand the nature and scope of the business conducted by the transfer agent,

the specific activities engaged in by the transfer agent, and identify and collect the disciplinary

history of the persons who may exercise direct or indirect control over the transfer agent. This

information is necessary for the Commission to identify transfer agents, review and assess an

entity’s registration application, determine whether there are statutory grounds to deny, suspend,

or revoke the entity’s registration, and identify and assess the risks the transfer agent and its

activities may pose to the securities markets, the national clearance and settlement system,

investors, and the public interest. Once a transfer agent is registered, Commission staff use the

information on Form TA-2 to maintain current information about individual registered transfer

agents, review and identify trends in transfer agent activities both with respect to individual

transfer agents and across the industry as a whole, evaluate individual transfer agents’

compliance with Commission rules, identify compliance issues and trends that may require

policy interventions, compliance examinations, or enforcement actions, and develop and evaluate

appropriate regulatory standards for transfer agents, including evaluating the costs and benefits

of potential rulemaking. As noted above, the Commission’s Division of Examinations may use

For a detailed and comprehensive overview of the existing registration, reporting, and disclosure

requirements applicable to registered transfer agents, see 2015 Concept Release, supra note 4.

the information on Forms TA-1 and TA-2 to help identify risks and better understand a transfer

agent’s business during an examination. Similarly, the Commission’s Division of Economic and

Risk Analysis (“DERA”) uses the information on Forms TA-1 and TA-2 to analyze the potential

economic effects of Commission rulemaking and other Commission actions, and to develop

reports, analytics, and other information to support the Commission’s policy initiatives,

examination function, and enforcement actions.84

The Commission has observed over time that, as the nature and scope of transfer agents’

activities within the securities markets and the national clearance and settlement system have

changed and expanded, the limited information disclosed on Forms TA-1 and TA-2 is no longer

sufficient in supporting the Commission to meet its statutory duties under the Exchange Act. For

example, the risk profile of a transfer agent that is part of a multi-national conglomerate and

provides dozens of loosely-related services across multiple markets all under a single registered

transfer agent will differ from a small corporation or limited liability company that primarily

provides transfer and recordkeeping services for small- and mid-cap equity issuers. Yet because

Forms TA-1 and TA-2 were created at a time when nearly all non-bank transfer agents had a

straightforward corporate organization and primarily engaged in traditional transfer and related

activities, the limited information on the forms does not permit the Commission to distinguish

between them without issuing a regulatory document request, conducting a formal examination,

or otherwise seeking additional information not already disclosed on the forms. Similarly, the

risks to investors, the markets, and the national clearance and settlement system posed by the

specific activities engaged in by a person or entity that registers as a transfer agent because, for

example, it engages in wallet whitelisting (i.e., determining whether a wallet address meets the

See Transfer Agent Data Sets, https://www.sec.gov/data-research/sec-markets-data/transfer-agent-data-sets.

credentialing requirements required for certain activities, such as holding tokenized securities or

other crypto assets) and incorporates distributed ledger technology as a component of its master

securityholder file will differ from the risks posed by the activities engaged in by a mutual fund

transfer agent that processes purchases and redemptions, calculates net asset value, and whose

transaction processing in general may be more complex or involve additional responsibilities as

compared to a transfer agent for an operating company.85 Yet, again, the information on the

forms does not permit the Commission to identify and understand the full scope of those

activities, much less the risks they pose because the forms were developed and adopted at a time

when certain technologies did not exist and transfer agent activities were carried out in a

significantly more limited way than they are today.

To ensure that Forms TA-1 and TA-2 continue to support the Commission’s ability to

fulfill its statutory duties, especially in consideration of the expanded scope of transfer agents’

activities as discussed throughout this release, the Commission is proposing amendments to

Forms TA-1 and TA-2. We discuss the specific proposed amendments to each form and related

Commission rule in turn below.

A. Proposed Amendments to Rule 17ac2-1

As noted above, under existing Rule 17ac2-1, a transfer agent’s registration automatically

becomes effective 30 days after the Form TA-1 is filed, unless the ARA takes affirmative action

to accelerate, deny, or postpone registration in accordance with the provisions of Section 17A(c)

of the Exchange Act.86 However, Section 17A(c)(2) of the Exchange Act specifies that a transfer

See 2015 Concept Release, supra note 4, at Section VII.C.2. For a detailed discussion of transfer agents to

mutual funds, see 2015 Concept Release, supra note 4, at Section VII.C.

Exchange Act Rule 17ac2-1(a), 17 CFR 240.17Ac2-1(a); SEC Form TA-1, General Instruction G, 17 CFR

249b.100.

agent’s registration shall become effective 45 days after receipt of the Form TA-1 application, or

within such shorter period of time as the ARA may determine.87

The Commission has observed over time that 30 days is often insufficient to determine

whether to accelerate, deny, or postpone a registration application, which often requires

additional research into the entity and its control persons, outreach to the applicant for additional

information or clarification of the application, and consultation and coordination among

Commission staff in multiple divisions and offices related to legal, regulatory, and other issues.

Accordingly, the Commission is proposing to amend paragraphs (a) and (b) of Rule 17ac2-1 to

specify that an application for registration would become effective 45 days after filing of the

application for registration, or any amendment to a pending application for registration, rather

than 30 days which the existing rule specifies. This would provide the Commission with

additional time to determine whether to act on a registration application, as required by the

Exchange Act, and would enhance consistency between the rule and statutory provision.88

Proposed Amendments to Rule 17ac2-2

The Commission is proposing to amend Rule 17ac2-2 to require that, if a transfer agent

discovers that any of the information reported on Form TA-2 was materially inaccurate,

misleading, or incomplete at the time of filing, the transfer agent shall correct the information by

filing an amendment to Form TA-2 pursuant to the instructions on the form to correct such

information within 60 days following the date on which the transfer agent discovered that such

information was materially inaccurate, misleading, or incomplete. The existing rule provides

that a transfer agent may file an amendment to Form TA-2 to correct information that has become

Exchange Act Section 17A(c)(2), 15 U.S.C. 78q-1(c)(2).

Exchange Act Section 17A(c)(3), 15 U.S.C. 78q-1(c)(3).

inaccurate, incomplete or misleading; it does not require filing of the amendment, nor does it

specify a time period in which such corrections should be made.89 The proposed amendment

differs from the existing requirement to amend Form TA-1 if information becomes materially

inaccurate, misleading, or incomplete. Unlike Form TA-1, Form TA-2 is used to report transfer

agent activities from the prior year reporting period and is required to be filed annually and

therefore the information disclosed on Form TA-2 would not become inaccurate, incomplete, or

misleading before the next year’s Form TA-2 is required to be filed. Instead, a transfer agent

may discover that the information on its Form TA-2 was inaccurate, incomplete, or misleading at

the time of filing and therefore the transfer agent may need or want to amend its filing with

corrected information. Commission staff have received questions from transfer agents regarding

whether they should file a Form TA-2 amendment after discovering that certain information on

their form was inaccurate at the time of filing. This proposed amendment would address these

issues by specifying that, if the information on its Form TA-2 was materially inaccurate,

incomplete, or misleading at the time of filing, under the proposed rule, the transfer agent would

be required to amend its Form TA-2 to correct such information, within 60 days of discovering

such deficiency. The amendment would align the time frame of 60 days for filing required

amendments in Rule 17ac2-2 with Rule 17ac2-1, which requires transfer agents to file required

amendments to Form TA-1 within 60 days.90

Proposed Amendments to Form TA-1

The Commission is proposing to amend the instructions for Form TA-1 to improve the

quality of information provided in connection with several existing questions, add new questions

See Exchange Act Rule 17ac2-2(a), 17 CFR 240.17Ac2-2(a).

Exchange Act Rule 17ac2-1(c), 17 CFR 240.17Ac2-1(c).

that would provide additional information that ensures the form continues to support its intended

purpose, and remove two questions that are duplicative of information required to be reported

and updated annually on Form TA-2. Table 2 below provides an overview of the proposed

amendments to Form TA-1.

Table 2. Comparison of Existing Form TA-1 Requirements with the Proposed

Amendments

Existing Form TA-1 Requirement

1(a). Filer CIK

1(b). CCC

1(f)(i-iii). Contact Name, Phone Number, E-mail

Address

3(a). Full Name of Registrant

6. Service companies (transfer agents) engaged by

Registrant

7. Registrant engagements to act as a service

company

8. Form of business organization

8(a). Section for Reporting Additional Persons

(Disclosure of owners, control persons)

11(a-d). Signature Block

12. Attachments

None

Proposed TA-1 Requirement

Form Instructions would be updated to provide full terms for

abbreviations CIK and CCC.

Form and Form Instructions would be updated to require that

the individual listed as the contact be authorized to receive

all compliance communications for the registrant and have

responsibility for disseminating them as appropriate within

the registrant’s organization.

Form Instructions would be updated to state that complete

and accurate legal name is required.

Existing Question 6 would be removed; similar information

disclosed on Form TA-2.

Existing Question 7 would be removed; similar information

disclosed on Form TA-2.

Checkboxes would be added for “Limited Liability

Company” and “Trust.”

Form and Form Instructions would be updated to specify the

individuals that must be disclosed in response to Question 8.

Form would be updated to include language regarding the

Commission’s authority to examine all records of registered

transfer agents.

Attachment would be required of organizational diagram

depicting relationship between the transfer agent and its

control affiliates.

New Question 3(f) would require disclosure of registrant’s

website address.

New Question 6(a) would require disclosure of registrant’s

other SEC registrations, if any.

New Question 6(b) would require disclosure of registrant’s

other federal, state, or foreign registrations, if any.

New Question 7 would require disclosure of any control

affiliate of the registrant, and any federal, state or foreign

registration of such affiliate and the registration number.

Technical Amendments:

In Question 2, the checkbox for Office of Thrift Supervision

would be removed.

In Question 10, references to 8(b) and 8(c) in definition of

control affiliate would be removed.

Existing Form TA-1 Requirement

Proposed TA-1 Requirement

In Signature Block, references to SEC supplement and

Schedules B-D would be removed.

In Instructions “Who Must File,” threshold for Section

12(g)(1) would be removed.

The proposed changes to Form TA-1 are discussed more fully below.

1. Proposed Changes to Form TA-1 Instructions

The Commission is proposing to amend the instructions for use of Form TA-1 for the

questions discussed below to promote clarity regarding the required information and to improve

the quality, consistency, and comparability of the information provided in response.

Form TA-1 Questions 1(a) and 1(b) (filer CIK and CCC, respectively) would not change,

but the form instructions would be updated to state that “CIK” is an abbreviation for “Central

Index Key,” which is the unique number the Commission assigns to each filer to distinguish it

from other filers, including those with similar names. Similarly, the form instructions would be

updated to note that “CCC” is an abbreviation for “CIK Confirmation Code,” which is a unique

code that each filer needs to make filings, and to retrieve and edit the filer’s data on EDGAR.

Commission staff routinely receive questions from prospective registrants regarding the meaning

and importance of these terms. Providing these clarifications would provide that information

uniformly to all potential registrants and help improve the clarity and transparency of the form.

Form TA-1 Question 1(f) (contact name, phone number, and e-mail address) would not

change, but the form instructions would be updated to require that the contact listed in response

to Question 1(f) must be an individual authorized to receive all compliance communications for

the registrant with responsibility to disseminate them as appropriate within the registrant’s

organization. In Commission staff’s experience, the contact information provided in response to

Question 1(f) is not always an individual with knowledge of the registration application or the

authority to speak to Commission staff regarding the application. This can hinder the

Commission staff reviewing the application from conveying important information to the

potential registrant and obtaining information or responses necessary to continue processing the

application, and otherwise frustrate, delay, or prevent the application review process. This

proposed change is in the public interest and would help ensure that transfer agents complete the

form consistently and accurately, and that Commission staff are able to follow up effectively

with the registrant regarding any questions on the content of the filing or other supervisory

matters, both while the registration application is pending and on a going forward basis for as

long as the transfer agent remains registered. However, because this information contains

personally identifiable information, it is not made publicly available on EDGAR and is only

available to the Commission and its staff.

Form TA-1 Question 3 (full name of registrant) would not change, but the form

instructions would be updated to specify that registrants must provide the complete and accurate

legal name of the entity that is registering as a transfer agent. Because the field for Question 3 is

auto-populated based on the applicant’s Form ID, applicants should ensure that they use the

complete and accurate legal name of the entity that is registering when completing the Form

ID.91 This information is necessary for the Commission’s review of the application to ensure

that, if the application is approved, the correct legal entity is registered, and to ensure that

investors and other members of the public are able to identify the correct legal entity acting as a

transfer agent. In Commission staff’s experience, however, prospective registrants do not always

provide this information consistently or completely, so updating the instructions would help

remind filers of this responsibility.

For more information on Form ID, see Rule 10 of Regulation S-T, 17 CFR 232.10; Edgar Filer Manual

Vol. I Section 3.

Form TA-1 Questions 8-10 require disclosure of background information for the owners

and other control persons of independent, non-issuer transfer agents, “with a particular emphasis

on whether offenses have been committed by these persons, and therefore, whether the transfer

agent’s association with a particular individual would have an impact on the transfer agent’s

ability to perform its functions properly.”92 When the proposed changes were adopted in 1986,

the final amended Form TA-1 included a “Supplement to Form TA-1” that required disclosure of

owner and control person information for different entity types on difference schedules (i.e.,

corporations, partnerships, etc.), and the form instructions provided a definition of “control”

(e.g., C-suite executives, general partners, etc.) for each entity type and specified that a 25

percent or higher ownership stake qualified as control.93 When electronic filing was mandated in

2006, the schedules were replaced by drop down menu items and the detailed instructions

defining control persons and level of ownership were truncated and moved to the EDGAR Filer

Manual.94

In the Commission’s experience since 2006, however, without detailed instructions

specifying who must be disclosed in response to Question 8, filers do not apply a consistent

definition or approach to responding to the question, which hinders the Commission in obtaining

and evaluating this important information. Accordingly, while Form TA-1 Question 8(a) (section

for reporting additional persons) would not change, the form instructions would be updated to

Revised Transfer Agent Forms and Related Rules, Exchange Act Release No. 21950 (Apr. 17, 1985), 50

FR 15912 (Apr. 23, 1985), 15913. When this information was first proposed to be added to Form TA-1 in

1985, it paralleled similar questions then being added to a revised version of Form BD and the Uniform

Application for Broker-Dealer Registration and related Form U-4 utilized by what was then known as the

National Association of Securities Dealers (now FINRA). Id.

See Revised Transfer Agent Forms and Related Rules, supra note 48.

See Electronic Filing of Transfer Agent Forms Release, supra note 41, at 5; EDGAR Filer Manual, Volume

II (June 2025) at 8-185.

reintroduce the instructions from prior iterations of the form that define control persons for

corporations and partnerships and add comparable instructions for trusts and limited liability

companies to account for other common types of business entities that modern transfer agents

choose to take. Specifically, the instructions would specify that registrants must provide the full

names of the following owners, executive officers, or other control persons in response to

Question 8(a):

•

Each Chief Executive Officer, Chief Financial Officer, Chief Operations Officer,

Chief Legal Officer, Chief Compliance Officer, director, and any other persons

with similar status or functions.

•

If the registrant is organized as a corporation, each person that is a direct or

indirect beneficial owner of 5% or more of any class of the registrant’s equity

securities.

•

If the registrant is organized as a partnership, all general partners and each limited

and special partner that have contributed 5% or more of the registrant’s capital.

•

In the case of a trust, (i) a person that directly owns 5% or more of a class of the

registrant’s voting securities, or that has the right to receive upon dissolution, or

has contributed, 5% or more of the registrant’s capital, (ii) the trust, and (iii) each

trustee.

•

If the transfer agent is organized as a limited liability company (“LLC”), (i) each

member that has the right to receive upon dissolution, or has contributed, 5% or

more of the registrant’s capital, and (ii) if managed by elected managers, all

elected managers.

In addition, the form instructions would be updated to provide definitions for “person”

and “control” to assist registrants in responding to Question 8(a). For purposes of Form TA-1,

the term “person” would be defined as an individual, partnership, corporation, trust, or other

organization, consistent with the definition of person used in other Commission registration

forms.95 The term “control” would be defined as the power to direct, or cause the direction of,

the management or policies of a person, whether through ownership, by contract, or otherwise,

consistent with the definition of control in the prior iteration of Form TA-1.96 In addition, any

person that is a director, partner, or officer exercising executive responsibility (or having similar

status or functions) or that directly or indirectly has the right to vote 25% or more of the voting

securities or is entitled to 25% or more of the profits would be presumed to be a control person,

as indicated in the prior iteration of Form TA-1.97 This information would help to inform the

Commission’s understanding of the ownership structure of the transfer agent and in identifying

who ultimately controls the transfer agent and its policies and procedures. The information

requested would also inform the Commission about any future changes in control of the transfer

agent, given the requirement to amend Form TA-1 whenever any reported information becomes

inaccurate, misleading, or incomplete. This information is critical, both to the Commission’s

assessment of the registration application, and to its ongoing supervision of the registered

transfer agent for the duration of the transfer agent’s registration, because it will allow the

The proposed definition of “person” is consistent with the definition of “person” used for broker-dealers

required to register on Form BD, investment advisers required to register on Form ADV, municipal

advisors required to register on Form MA, and funding portals required to register on Form Funding Portal.

See 17 CFR 249.501, 17 CFR 279.1, 17 CFR 249.1300, and 17 CFR 249.2000.

See Revised Transfer Agent Forms and Related Rules, supra note 48.

See id.

Commission to better understand, for example, potential conflicts, concentration in the industry,

and the potential disciplinary history of control persons.

Form TA-1 Question 11 (signature block) would not change, but the form would be

updated with a statement regarding the Commission’s authority to examine all records of

registered transfer agents pursuant to Section 17(b) of the Exchange Act.98 In the Commission’s

experience, certain transfer agents are unaware of their obligation to permit examination of the

transfer agent’s records pursuant to Section 17(b) of the Exchange Act, and therefore refuse to

produce records requested in connection with an examination or attempt to limit the records they

produce in response to records requests from Commission staff. A transfer agent’s refusal to

permit examination of records clearly within the scope of Section 17(b) of the Exchange Act

frustrates and delays examinations and hinders the Commission’s ability to carry out its

regulatory and oversight responsibilities. Including language on the Form TA-1 reminding

transfer agents of their statutory obligation to permit examination of their records should help

ensure that transfer agents are aware of their statutory obligations and could help reduce

instances of non-compliance. Accordingly, the proposed statement preceding a registrant’s

signature would be as follows: “Pursuant to Section 17(b) of the Securities Exchange Act of

1934, all records of registered transfer agents are subject to examination by SEC staff. If a

registered transfer agent does not comply with Section 17(b), the Commission may seek all

available relief against that transfer agent in district court and/or an administrative proceeding.

Such relief includes, but is not limited to, an injunction, denial, suspension, and/or revocation of

Section 17(b) of the Exchange Act provides that “All records of persons described in subsection (a) of this

section [i.e., transfer agents] are subject at any time, or from time to time, to such reasonable, periodic,

special, or other examinations by representatives of the Commission and the [appropriate ARA] as the

Commission [or the appropriate ARA] deems necessary or appropriate in the public interest, for the

protection of investors, or otherwise in furtherance of the purposes of this chapter.”

registration, and civil penalties. The registrant submitting this Form, and the person signing the

Form, acknowledge that they understand and will comply with the requirement to make records

available for examination. If, at any point, the firm believes it is unable to comply with its

obligations to provide its records to SEC staff for examination, the firm should consider whether

it needs to withdraw from registration.” With this language on the form, each time an officer of

the transfer agent signs Form TA-1 (either the initial filing or an amendment), they would be

acknowledging that they understand, and will comply with, the obligation of the registered

transfer agent to provide records to the Commission upon request.

2. Proposed Changes to Form TA-1 Reporting Requirements

The Commission is proposing to amend Form TA-1 to remove two existing questions

regarding service company arrangements and to add questions requiring registrants to report

additional information, as described more fully below.

Form TA-1 would be amended to remove existing Questions 6 and 7 regarding registrant

service company arrangements as this information is duplicative of information that is required

to be disclosed and updated annually in response to Question 2 on Form TA-2. The

corresponding instructions related to existing Questions 6 and 7 would also be removed. As a

result, a transfer agent’s service company arrangements would not be disclosed on Form TA-1

(but would be disclosed and updated annually on Form TA-2). Given the requirement in Rule

17ac2-1(c) for transfer agents to file an amendment within 60 days if any information on Form

TA-1 becomes inaccurate, misleading, or incomplete,99 the Commission also would no longer be

informed within 60 days of each change in a transfer agent’s service company arrangements.

However, because Form TA-2 requires registered transfer agents to report all service company

Exchange Act Rule 17ac2-1(c), 17 CFR 240.17Ac2-1(c).

arrangements from each prior calendar year reporting period,100 the Commission will receive an

annual summary of these arrangements on Form TA-2 by the filing deadline each year.

Therefore, this proposed change would not materially impact the Commission’s oversight of

transfer agent operations with respect to service company arrangements.

Form TA-1 would be amended to add new Question 3(f), which would require disclosure

of the registrant’s website address. A website address would assist the Commission in evaluating

applications for registration and in overseeing registered transfer agents.

Form TA-1 would also be amended to add new Question 6(a) regarding the applicant’s

other registrations with the Commission, new Question 6(b) regarding the applicant’s other

federal, state, or foreign registrations, and new Question 7 regarding the applicant’s control

affiliates. Existing Questions 8 and 9 require disclosure of the applicant’s control persons, and

Question 10 requires the applicant to disclose whether it or any of its control persons or control

affiliates has been subject to investment-related criminal prosecutions, regulatory actions, or civil

actions. The definition of control affiliate is broad and includes, among other things, an

individual or firm that is under common control with the applicant.101 As a result, the

disciplinary history for transfer agents that are part of a larger corporate family of registered

entities can include information related to multiple entities that are registered with the

Commission or other regulators in different capacities. For example, if a transfer agent’s parent

company also controls a bank, a broker-dealer, and an investment adviser, the transfer agent’s

Form TA-1 needs to include the disciplinary history for the affiliated bank, broker-dealer, and

investment adviser in response to Question 10. However, in the Commission’s experience,

100

See Question 2 on Form TA-2 (Form for Reporting Activities of Transfer Agents Registered Pursuant to

Section 17A of the Securities Exchange Act of 1934), 17 CFR 249b.102.

101

SEC Form TA-1, Question 10, 17 CFR 249b.100.

transfer agent applicants do not always provide full and complete information regarding control

person and control affiliate disciplinary history when completing the Form TA-1. This then

requires the Commission staff reviewing the application to either manually search for other

registrations—a laborious undertaking102—or risk processing the application with incomplete or

inaccurate information. This could be addressed by including information on the Form TA-1

regarding the registrant’s additional registrations and registration numbers, which would allow

the Commission staff reviewing an application to cross-reference the applicant’s other

registrations without either relying on the registrant to accurately and timely update or complete

its other registrations, or conduct a laborious and time-consuming manual search. This in turn

would facilitate the Commission’s ability to evaluate and act on transfer agent registration

applications within the limited time permitted under the Exchange Act.103

Accordingly, the Commission is proposing to amend Form TA-1 to add new Question

6(a), which would require applicants to disclose any other SEC registrations they hold, along

with the corresponding SEC registration number. Similarly, new Question 6(b) would require

registrants to disclose any other federal, state, or foreign registrations of the registrant, along

with the associated registration number, if any. This information is similar to registration

information requested of other Commission registrants,104 should be readily available to the

registrant and easily listed on the Form TA-1 and would allow the Commission to cross-

102

For example, there could be a slight variation in the entity’s or an individual’s name across different

registration applications that could hinder a manual search or call the results into question.

103

A Form TA-1 registration automatically becomes effective 30 days after filing unless the Commission

takes affirmative action to accelerate, deny, or postpone the registration in accordance with the provisions

of Section 17A(c) of the Act. Exchange Act Rule 17Ac2-1(a), 17 CFR 240.17Ac2-1(a). As noted, we are

proposing to amend Rule 17Ac2-1(a) to specify that registration would become effective 45 days after

filing. See supra Section II.A.

104

See, e.g., Form MA and Form Funding Portal, 17 CFR 249.1300 and 17 CFR 249.2000.

reference those entities applying for registration as transfer agents with those that are already

registered in another capacity with the Commission or another regulator without conducting a

laborious and potentially inaccurate manual search for such registrations. This, in turn, would

help ensure that the Commission has accurate and complete information to develop a

comprehensive assessment of the applicant’s control person and control affiliate disciplinary

history across the full range of its regulated activities, which is necessary for the Commission to

understand and assess the risks to investors, the securities markets, and the national clearance

and settlement system posed by those persons, affiliates, and activities, which is consistent with

promoting investor protection. It also would facilitate more efficient and effective examinations

of transfer agents that are also registered in other capacities and develop a more comprehensive

understanding of both individual transfer agents and the transfer agent industry as a whole.

Likewise, requiring the applicant to affirmatively identify its control affiliates in new

Question 7 (as opposed to simply asking for the disciplinary history of its control affiliates)

would allow the Commission to cross-check and validate applicant’s disciplinary disclosures

provided in response to Question 10 without relying exclusively on the applicant to provide a

complete and accurate list of its control affiliates’ disciplinary history, which would have the

same benefits as new Questions 6(a) and 6(b) discussed above, including facilitating the

Commission’s ability to evaluate and act on transfer agent registration applications within the

limited time permitted under the Exchange Act. Accordingly, the Commission is proposing to

add new Question 7 to Form TA-1, which would supplement the existing requirement to disclose

the disciplinary history for the applicant’s control affiliates by requiring applicants to disclose in

new Schedule A the name of any control affiliate, and any federal, state, or foreign registration of

such control affiliate and the associated registration number.

In addition, Form TA-1 Question 12 would be amended to require a registrant to file an

attachment to Form TA-1 containing a diagram depicting the relationship between the transfer

agent and the control affiliates in its organizational structure. Transfer agents should be able to

prepare an organizational chart suited to their operational structure, and limiting the chart to

control affiliates would ensure the chart includes only the most relevant individuals or firms that

would aid the Commission in understanding the nature of a transfer agent’s regulated business

operations and overall organizational control structure. This would enhance the Commission’s

ability to evaluate applications for registration as transfer agents, facilitate more efficient and

effective examinations of transfer agents, and develop a more comprehensive understanding of

both individual transfer agents and the transfer agent industry as a whole. In the Commission’s

experience, an accurate organization chart is often necessary to understand the structure of an

organization and its affiliates, especially large organizations with many affiliates. This

information will help to ensure that the Commission has accurate and complete information

regarding a transfer agent’s control structure, which would help the Commission understand and

assess the risks to investors, the securities markets, and the national clearance and settlement

system posed by the transfer agent and its control persons and affiliates, consistent with investor

protection.

Form TA-1 Question 8 (form of organization) would be amended to provide checkboxes

for two additional organization types: trusts and limited liability companies. Currently Question

8 provides the following checkboxes: Corporation, Partnership, Sole Proprietorship, Other, and

Not Applicable. The Commission has observed that many transfer agents are organized as trusts

or limited liability companies and adding these additional checkboxes to Form TA-1 would aid

registrants in responding to Question 8.

3. Technical Amendments to Form TA-1

The Commission is also proposing to make several technical amendments to Form TA-1

to remove information that is no longer necessary or accurate. Specifically, the option to select

the Office of Thrift Supervision in Question 2 as an appropriate regulatory agency would be

removed, as this agency has been abolished.105 The definition of control affiliate in Question 10

would be amended to remove references to Questions 8(b) and 8(c), as those questions do not

exist on Form TA-1. Similarly, the reference to the SEC supplement and Schedules B-D

preceding the Form TA-1’s signature block would be removed, as those items are no longer part

of Form TA-1. Finally, the Form TA-1 instructions would be amended to remove outdated asset

and holder thresholds under Section 12(g)(1) of the Exchange Act for exempt equity securities.

4. Request for Comment

The Commission requests comments on all aspects of the proposed amendments to Form

TA-1. In particular, the Commission requests comments on the following:

1. Should the proposed 45 day effectiveness period apply uniformly to all

transfer agent applications for registration regardless of size, complexity, or

type of activities engaged in?

2. Should the Commission require less information to be disclosed on Form TA1? Are there any specific questions or categories of information on the

existing form that registrants believe are no longer necessary or useful to the

Commission?

3. Should the Commission require transfer agents to designate more than one

105

Dodd-Frank Wall Street Reform and Consumer Protection Act., Pub. L. No. 111-203, § 313, 124 Stat.

1376, 1523 (2010).

contact person on Form TA-1 to ensure continuity of compliance

communications in the event the primary contact is unavailable?

4. Should the Commission require transfer agents to update their contact

information more frequently than currently required, given the importance of

maintaining current and accurate contact information for compliance

communications? If so, what update frequency should be appropriate?

5. Does the service company information required to be disclosed on Form TA-2

provide the Commission with sufficient information regarding service

company arrangements? Is there any additional information the Commission

should require transfer agents to disclose on Form TA-1 or Form TA-2

regarding service company arrangements?

6. While registrants must disclose on Form TA-1 whether they or any of their

control affiliates have been subject to criminal prosecution for investment

related crimes, should this requirement be expanded to cover other types of

criminal activity, such as theft or fraud outside of an investment context?

7. Should the Commission require all registrants to provide an attachment to

their Form TA-1 with a diagram depicting the control affiliates in their

organizational structure, or should the Commission provide an exemption

from this requirement for small or less organizationally complex transfer

agents? If so, what types of transfer agents should be exempt from the

requirement to provide an organizational diagram?

8. More generally, does the proposed requirement to provide an attachment to

the Form TA-1 with a diagram depicting their organizational structure impose

a burden on any particular types of transfer agents?

9. Are the proposed checkboxes for “Limited Liability Company” and “Trust” as

additional organization types in Question 8 sufficient to capture the full range

of organizational structures used by transfer agents? Are there other

organizational structures that should be added to the list of checkboxes?

10. Do the proposed definitions for “control” and “person” adequately cover the

appropriate individuals and entities that should be disclosed on Form TA-1, or

are the proposed definitions either too expansive or, conversely, too limited?

Should the Commission consider alternative definitions or thresholds for

determining who qualifies as a control person for purposes of Form TA-1?

11. Is any information that would be required by the proposed changes to Form

TA-1 difficult for a transfer agent to provide? If so, why? Are there

alternative approaches to collecting the same information that would be less

burdensome for transfer agents, such as providing this information upon

request, while still providing the Commission with the information it needs?

12. Should any information that would be required by the proposed changes to

Form TA-1 (other than the personal name and contact information in Question

1(f)) not be publicly disclosed?

D. Proposed Amendments to Form TA-2

The Commission is proposing to update the form instructions for several questions on

Form TA-2 to further explain the required information. Additionally, the Commission is

proposing to introduce new requirements to provide additional information that the Commission

considers important for determining the nature of the business conducted by transfer agents,

monitoring their activities, evaluating compliance with Commission rules, informing

Commission transfer agent policymaking, and supporting the Commission’s statutory duty to

facilitate the establishment of a national clearance and settlement system for the prompt and

accurate clearance and settlement of transactions in securities.106 The Commission is also

proposing to eliminate questions that would no longer be necessary if the proposed changes to

Form TA-2 are adopted. Table 3 provides an overview of the proposed amendments to Form TA2.

Table 3. Comparison of Existing Form TA-2 Requirements with the Proposed

Amendments

Existing Form TA-2 Requirements

Proposed Form TA-2 Requirements

1(a). Filer CIK

1(b). Filer CCC

1(f)(i-iii). Contact Name, Contact Phone Number,

Contact E-mail Address

4(b). Number of individual securityholder accounts for

which the TA maintained master securityholder files

5(a). Total number of individual securityholder

accounts, including accounts in the DRS, dividend

reinvestment plans, and/or direct purchase plans as of

December 31

5(b). Number of individual securityholder dividend

reinvestment plan, and/or direct purchase plan accounts

as of December 31

5(c). Number of individual securityholder DRS

accounts as of December 31

5(d). Approximate percentage of individual

securityholder accounts from subsection (a) in the

following categories as of December 31: 5(d)(i-vi)

6. Number of securities issues for which Registrant

acted in the following capacities, as of December 31:

6(a). Receives items for transfer and maintains master

securityholder files

6(b). Receives items for transfer but does not maintain

the master securityholder files

106

Form Instructions would be updated to provide full

terms for abbreviations CIK and CCC.

Form and Form Instructions would be updated to require

that the individual listed as the contact employee be

authorized to receive all compliance communications for

the registrant and have responsibility for disseminating

them as appropriate within the registrant’s organization.

Form Instructions would be updated with information

regarding how to count the number of individual

securityholder accounts.

Existing Question 5 would be removed.

New Question 4(c) would require registrant to provide

the total number of individual securityholder accounts

by security type in a new table.

Existing Question 6 would be removed.

New Question 6(a) would require registrant to provide

similar data in a new table.

See 15 U.S.C. 78q-1(a)(2)

Existing Form TA-2 Requirements

6(c). Does not receive items for transfer but maintains

master securityholder files

7(a). Number of issues for which dividend

reinvestment plan, and/or direct purchase plan services

were provided, as of December 31

7(b). Number of issues for which DRS services were

provided, as of December 31

7(c). Dividend disbursement and interest paying agent

activities conducted during the reporting period:

• Number of issues (Question 7(c)(i))

• Amount (in dollars) (Question 7(c)(ii))

9(a)(i-ii). Turnaround Compliance

• Number of months during the reporting period

Registrant was not in compliance with the

turnaround time for routine items (Question 9(a)(i))

• Number of written notices Registrant filed during the

reporting period to report its noncompliance with the

turnaround time for routine items (Question 9(a)(ii))

13(a-e). Related Documents / Attachments

None

Proposed Form TA-2 Requirements

Existing Question 7(a) and 7(b) would be incorporated

into new Question 6(a).

Registrant would be required to report the number of

issues for which paying agent services were provided as

of December 31 in new Question 6(a).

New Question 7 would require registrant to report all

fund movements to/from securityholders as well as inkind distributions to securityholders (not just dividend

and interest disbursements).

Question 9 would be revised to conform to Proposed

Rule 17ad-2.

Registrant would be required to report the total number

of routine items it received during the reporting period

and the number of routine items it failed to turn around

or process within the shorter of one business day or the

time period specified by Rule 15c6-1(a) of the Exchange

Act for each month of the reporting period.

Attachment would be required for a list of all issues

serviced by registrant.

New Questions 4(d) and (e) would require registrant to

report on usage of physical certificates and distributed

ledger technology during the reporting period.

New Question 5(a) would require registrant to report the

number of employees engaged in transfer agent

functions or activities incidental thereto during the

reporting period.

New Question 5(b) would require registrant to report

certain service providers used during the reporting

period.

New Question 6(b) would require registrant to report the

number of issues, by tokenization model, serviced by

the registrant as of December 31.

The proposed changes to Form TA-2 are discussed more fully below.

1. Proposed Changes to Form TA-2 Instructions

The Commission is proposing to amend the instructions for use of Form TA-2 for the

questions discussed below to provide specificity regarding the required information and to

improve the quality, consistency, and comparability of the information provided in response.

Form TA-2 Questions 1(a) and 1(b) (filer CIK and CCC, respectively) would not change,

but the form instructions would be updated to state that “CIK” is an abbreviation for “Central

Index Key.” Similarly, the form instructions would be updated to note that “CCC” is an

abbreviation for “CIK Confirmation Code.” As with Form TA-1 described above, Commission

staff routinely receive questions from registrants regarding the meaning and importance of these

terms. Providing these clarifications would provide that information uniformly to all registrants.

It would also help improve the clarity and transparency of the form, thereby decreasing the

amount of time it takes for registrants to complete the form.

Form TA-2 Question 1(f) (contact name, phone number, and e-mail address) would not

change, but the form instructions would be updated to require that the contact listed in response

to Question 1(f) must be an individual authorized to receive all compliance communications for

the registrant with responsibility to disseminate them as appropriate within the registrant’s

organization. As with Form TA-1, in Commission staff’s experience, the contact information

provided in response to Question 1(f) is not always an individual with knowledge of the annual

report or the authority to speak to Commission staff regarding the annual report. This can hinder

the Commission staff reviewing the annual report from conveying important information to the

registrant or obtaining information in response to questions regarding the annual report. This

proposed change would help ensure that transfer agents complete the form consistently and

accurately, and that Commission staff are able to follow up effectively with the registrant

regarding any questions on the content of the annual report or other supervisory matters that arise

while the transfer agent remains registered. Moreover, not having up-to-date contact information

for an appropriately authorized individual could impede the Commission in carrying out its

regulatory and oversight responsibilities with respect to transfer agents. However, because this

information contains personally identifiable information, it is not made publicly available on

EDGAR and is only available to the Commission and its staff.

Form TA-2 Question 4(b) (number of individual securityholder accounts for which the

transfer agent maintained master securityholder files) would not change, but the form

instructions would be updated to provide instructions regarding how to calculate the number of

individual securityholder accounts. Based on the Commission’s supervisory experience, the

Commission understands that there is variability in the way registered transfer agents calculate

the number of individual securityholder accounts reported in response to Question 4(b), which

hinders the Commission’s ability to gather and analyze accurate and comparable information.

This proposed change to the form instructions would help ensure consistently accurate reporting

of the number of individual securityholder accounts, based upon the same calculation

methodology, which should, in turn, support investor protection and market integrity by ensuring

that the Commission has an accurate understanding of the market. Therefore, the Commission

proposes to provide instructions for transfer agents regarding the calculation methodology that

considers both the number of securities issues as well as the number of securityholders for the

issue. For purposes of Question 4(b), the number of individual securityholder accounts for each

securities issue should be determined separately and then added together to arrive at the number

reported in response to Question 4(b). For example, if the transfer agent maintains the master

securityholder file for two securities, one with five individual securityholders and the other with

the same five securityholders, the transfer agent should report 10 in response to Question 4(b).

Any identical securityholders for the two securities should be counted separately for each issue

for purposes of responding to Question 4(b).

2. Proposed Changes to Form TA-2 Reporting Requirements

The Commission is proposing to amend Form TA-2 in several ways that would provide

the Commission with information regarding a transfer agent’s staffing, securityholders, service

providers, recordkeeping, and handling of funds. These proposed changes, as described below,

would further support the Commission’s statutory mandate to protect investors, promote the

prompt and accurate clearance and settlement of securities transactions, and promote the

safeguarding of funds and securities by enhancing oversight of a transfer agent’s operational

capacity, operational risks, recordkeeping practices, and outsourcing risks.107

a. Number of Individual Securityholder Accounts

Accurate and relevant data regarding the specific types and volume of securities accounts

serviced by a transfer agent is critical to the Commission’s assessment and oversight of a transfer

agent’s operational capacity, recordkeeping practices, operational risks, and safeguarding

practices. Existing Form TA-2 Questions 5(a) – (d) require disclosure of the total number of

individual securityholder accounts, individual securityholder DRS accounts, individual

securityholder dividend reinvestment plan and/or direct purchase plan accounts, and approximate

percentages of individual securityholder accounts in various security type categories, as of

December 31. To ensure that the data provided on Form TA-2 is relevant to the types and

volume of securities accounts serviced by modern transfer agents and therefore continues to

support the Commission’s statutory duties related to the oversight of registered transfer agents,

Questions 5(a)-(d) would be removed along with the corresponding form instructions and

replaced with proposed new Question 4(c). As depicted in Figure 1 below, proposed new

Question 4(c) would require registrants to report the total number of individual securityholder

107

Exchange Act Section 17A(a)(2)(A), 15 U.S.C. 78q-1(a)(2)(A).

accounts, by security type, as of December 31. Proposed Question 4(c) is similar to existing

Question 5(d), but proposed Question 4(c) would require the total number of individual

securityholder accounts by security type, as opposed to the approximate percentage of individual

securityholder accounts by security type, which should be more readily available and would

avoid the need for registrants to perform a percentage calculation. In addition, proposed

Question 4(c) would provide more granular security types than existing Question 5(d) by

including categories for corporate equity securities at two different market capitalization levels,

exchange traded funds, and closed end investment company securities, as transfer agent

activities, operational risks, recordkeeping practices, and safeguarding activities may vary

depending on the type of security being serviced.

The security types provided in the table would include corporate equity securities with

market capitalization less than or equal to $300 million, corporate equity securities with market

capitalization greater than $300 million, corporate debt securities, non-exchange traded open-end

investment company securities, exchange-traded funds, closed end investment company

securities, limited partnership securities, municipal debt securities, and other securities. The

number of individual securityholder accounts in DRS, dividend reinvestment plans, or direct

purchase plans required by Questions 5(b) and (c) are proposed to be deleted and would no

longer be required. As subsets of the total number of individual securityholder accounts, those

subcategories are not necessary given the requirement in Form TA-2 to report the number of

issues for which DRS, dividend reinvestment plan, or direct purchase plan services were

provided in existing Question 7.

Figure 1: Proposed Question 4(c) Regarding Individual Securityholder Accounts

4(c). Provide the total number of individual securityholder accounts, by security type, as

of December 31:

Security Type

Total Number of Individual Securityholder Accounts

(as of December 31)

Corporate Equity Securities

(market cap <= $300 million)

Corporate Equity Securities

(market cap > $300 million)

Corporate Debt Securities

Non-Exchange Traded Open End

Investment Company Securities

Exchange-Traded Funds

Closed End Investment Company

Securities

Limited Partnership Securities

Municipal Debt Securities

Other Securities

Total

b. Number of Issues by Activity Type

Existing Form TA-2 Question 6 (number of securities issues for which Registrant

received items and/or maintained the master securityholder files, broken down by various

security types) would be removed and replaced with proposed new Question 6(a) which would

request similar information but would also incorporate the transfer agent activity types from

Question 7 and include more granular security types than existing Question 6. Proposed

Question 6(a) would add security type categories for corporate equity securities at two different

market capitalization levels, exchange-traded funds, and closed end investment company

securities, as transfer agent activities, operational risks, recordkeeping practices, and

safeguarding activities may vary depending on the type of security being serviced. Specifically,

as depicted in Figure 2 below, registrants would be required to report the following data as of

December 31 in a new table categorized by security type: the number of securities issues for

which the transfer agent (i) received items for transfer, (ii) maintained the master securityholder

file(s), (iii) provided DRS services, (iv) provided direct purchase plan services, (v) provided

dividend reinvestment plan services, and (vi) provided paying agent services. The security types

provided in the table include corporate equity securities with market capitalization less than or

equal to $300 million, corporate equity securities with market capitalization greater than $300

million, corporate debt securities, non-exchange traded open-end investment company securities,

exchange-traded funds, closed end investment company securities, limited partnership securities,

municipal debt securities, and other securities. These proposed revisions to Question 6 would

incorporate the content of Question 7(a) regarding the number of issues for which dividend

reinvestment plan and/or direct purchase plan services were provided as of December 31,

Question 7(b) regarding the number of issues for which DRS services were provided as of

December 31, and Question 7(c)(i) regarding the number of issues for which dividend

disbursement and interest paying agent activities were conducted during the reporting period and

thus, those questions would be removed. Dividend disbursement and interest paying agent

activities would be included with other paying agent services in a single column in proposed

Question 6(a).

Figure 2: Table for Proposed Question 6(a)

Security Type

Received

Items for

Transfer

Corporate Equity Securities

(market cap <= $300 million)

Corporate Equity Securities

(market cap > $300 million)

Corporate Debt Securities

Non-Exchange Traded Open

End Investment Company

Securities

Exchange-Traded Funds

Closed End Investment

Company Securities

Limited Partnership Securities

Municipal Debt Securities

Other Securities

Total

Number of issues for which Registrant provided the following services

(as of December 31)

Maintained

Master

Securityholder

File(s)

Provided Direct

Registration

System (DRS)

Services

Provided

Direct

Purchase Plan

(DPP) Services

Provided

Dividend

Reinvestment

Services

Provided

Paying Agent

Services

c. Handling of Securityholder Funds and Securities

Form TA-2 Question 7(c)(ii) (amount in dollars of dividend disbursement and interest

paying agent activities conducted during the reporting period) would be replaced by proposed

new Question 7 which is designed to capture all money movement through a transfer agent to or

from securityholders, not just dividend disbursements and interest payments as required by

existing Question 7(c)(ii), as well as any in-kind distribution activity. Specifically, registrants

would be required to report the amount (in dollars) of dividend disbursements, interest or coupon

payments, principal payments, disbursements in connection with corporate actions, open-end

investment company purchases and redemptions, stock purchases, and any other monetary

inflows or disbursements, as well as the amount (in units) of any in-kind distributions to

securityholders during the reporting period. These proposed changes would contradict the

form’s existing instructions for answering Question 7(c),108 so those instructions would be

removed. Requiring transfer agents to report more detailed information regarding the nature and

extent of their handling of securityholder funds would provide the Commission with data

relevant to assess safeguarding risks across the transfer agent population as a whole and at

individual transfer agents. This information would further support the Commission’s statutory

mandate to protect investors, promote the prompt and accurate clearance and settlement of

securities transactions, and promote the safeguarding of funds and securities.

d. Turnaround Performance

Form TA-2 Question 9 (turnaround compliance) would be removed in its entirety due to

the proposed changes to Rule 17ad-2 discussed in Section III.D. Existing Form TA-2 Question

108

The existing instructions for Form TA-2 Question 7.c. direct registrants to exclude coupon payments and

transfers of record ownership as a result of corporate actions.

9(a)(i) requires a registrant to report the number of months during the reporting period it was not

in compliance with the turnaround time for routine items according to Rule 17ad-2, while

existing Question 9(a)(ii) requires a registrant to report the number of written notices filed during

the reporting period with the SEC and with its ARA regarding noncompliance with the

turnaround time for routine items according to Rule 17ad-2.109 Instead, proposed new Question

9(a) would require registrants to report the total number of routine items received during the

reporting period, and proposed new Question 9(b) would require registrants to report the number

of routine items that were not turned around or processed within the shorter of one business day

or the time period specified by Rule 15c6-1(a) of the Exchange Act for each month of the

reporting period. These proposed new questions would align the reporting requirements on Form

TA-2 with the proposed changes to Rule 17ad-2 regarding turnaround and processing

performance.

3. Proposed Additions to Form TA-2 Reporting Requirements

New Questions would be added to Form TA-2 to require registrants to report the

following information, as accurate data in these areas is important for the Commission’s

assessment and oversight of a transfer agent’s operational capacity, recordkeeping practices,

operational risks, and safeguarding practices:

•

The number of issues serviced by the registrant for which physical certificates

were in use during the reporting period in new Question 4(d);

•

The number of issues for which the registrant maintained the master

securityholder file using distributed ledger technology during the reporting

period in new Question 4(e);

109

17 CFR 249b.102.

•

The number of employees engaged in transfer agent functions or activities

incidental thereto during the reporting period in new Question 5(a);

•

The types of service providers used by the registrant during the reporting

period using a check-the-box format along with the name of the service

provider(s) that directly supports the performance of transfer agent functions

using a fill-in-the-blank format in new Question 5(b);

•

The number of issues, by tokenization model, serviced by the registrant as of

December 31 in new Question 6(b); and

•

A list of issues serviced by the registrant as of December 31 of the reporting

period.

a. Certificates and Distributed Ledger Technology

The Commission is proposing to add new Question 4(d) to the Form TA-2 to require

registered transfer agents to report the number of issues for which physical certificates were in

use during the reporting period and new Question 4(e) to require registered transfer agents to

report the number of issues for which distributed ledger technology was used to maintain the

master securityholder file during the reporting period. The risks associated with safeguarding

physical securities certificates are vastly different than the risks associated with safeguarding

book-entry securities or tokenized securities, and accurate data in this area is important for the

Commission’s assessment and oversight of a transfer agent’s recordkeeping practices,

operational risks, and safeguarding practices.

b. Staffing Information

The Commission is proposing to add a new question to the Form TA-2 to require

registered transfer agents to report the number of employees engaged in transfer agent functions

(as defined in section 3(a)(25) of the Exchange Act) or activities incidental thereto during the

reporting period. The individuals engaging in transfer agent functions or activities incidental

thereto are subject to Exchange Act Rule 17f-2 regarding fingerprinting of securities industry

personnel, cannot claim the exemption to the fingerprinting requirement in Rule 17f-2(a)(1)(ii),

and are often responsible for interfacing with securityholders, handling sensitive securityholder

information, completing transfers of securities, and processing various types of payments from

issuers to securityholders. Accurate transfer agent staffing data will help to ensure that the

information provided on Form TA-2 is relevant to the operational capacity and operational risks

of modern transfer agents, would be comparable across the transfer agent population and

therefore would continue to support the Commission’s statutory duties related to the oversight of

transfer agents. This information would further support the Commission’s statutory mandate to

protect investors, promote the prompt and accurate clearance and settlement of securities

transactions, and promote the safeguarding of funds and securities.

c. Service Providers

Based upon its supervisory experience, the Commission has observed that transfer agents

have used service providers to help ensure the prompt and accurate clearance and settlement of

securities transactions. The range of corporate structures and functions performed by a

registered transfer agent means that service providers can perform a wide variety of functions.

Requiring a transfer agent to provide information about certain service providers on Form TA-2,

as described further below, would allow the Commission to better understand the potential

operational risks faced by transfer agents in performing their transfer agent functions. For

example, based upon its supervisory experience, the Commission understands that transfer

agents may use third parties to provide recordkeeping functions. In such cases, failure of the

service provider to perform its obligations due to, for example, an outage or a systems error,

would pose significant operational risks and have critical effects on the transfer agent’s ability to

perform its transfer agent functions and as such could hinder the prompt and accurate clearance

and settlement of securities transactions which the Commission is authorized to facilitate.

Therefore, the Commission is proposing to require registered transfer agents to identify,

by name and type, on Form TA-2 certain service providers that directly support the performance

of transfer agent functions, however this information would not be made publicly available on

EDGAR. Identification by name would allow the Commission to assess potential operational

risk across the national system of clearance and settlement; for example, if a particular

recordkeeping service provider suffers an outage or is otherwise unable to provide services,

knowing how many transfer agents rely on that provider would help the Commission assess the

impact on the national system for the settlement of securities transactions, and the market

generally. Identification by type would provide the Commission with better comparability

across the transfer agents that help make up the national system of clearance and settlement,

which should help inform its oversight and responsibility for the prompt and accurate clearance

and settlement of securities transactions.

As depicted in Figure 3 below, proposed Question 5(b) would include checkboxes for the

following types of service providers that directly support the registrant in carrying out transfer

agent activities: (1) banks, (2) escrow agents, (3) recordkeeping system providers, (4) lost

securityholder search providers, (5) printing and mailing services, (6) call center providers, (7)

tokenization agents, and (8) distributed ledger technology platforms. Following each entry is a

space for registrants to fill-in-the-blank with the name of the service provider(s).

Figure 3: Proposed Question 5(b) Regarding Service Providers

Registrant used the following Service Providers during the Reporting Period.

Check all that apply and provide name of service provider(s) that directly supports the

performance of transfer agent functions:

Bank(s): __________________

Escrow Agent(s): ______________

Recordkeeping System Provider(s):_______________________

Lost Securityholder Search Provider(s):______________________

Printing and Mailing Service Provider(s):____________________

Call Center Provider(s):______________________

Tokenization Agent(s):___________________________

Distributed Ledger Technology Platform(s):________________________

d. Tokenized Securities

As discussed above, some transfer agents play a role in developing, issuing, and

administering tokenized securities, which may present different operational requirements and

risks, recordkeeping systems, and safeguarding controls than traditional certificated and

uncertificated securities. To ensure that the data provided on Form TA-2 is relevant to the types

and volume of securities serviced by modern transfer agents, and therefore continues to support

the Commission’s statutory duties related to oversight of transfer agents to protect investors,

promote the prompt and accurate clearance and settlement of securities transactions, and promote

the safeguarding of funds and securities, as depicted in Figure 4 below, proposed new question

6(b) would require registrants to report the number of issues, by tokenization model and security

type, serviced by the registrant as of December 31. The tokenization models provided in the

table would include issuer-sponsored and third-party sponsored, as the risks to investors differ

depending on the tokenization model.110 The security types provided in the table would include

corporate equity securities with market capitalization less than or equal to $300 million,

corporate equity securities with market capitalization greater than $300 million, corporate debt

securities, non-exchange traded open-end investment company securities, exchange-traded

funds, closed end investment company securities, limited partnership securities, municipal debt

securities, and other securities.

Figure 4: Proposed Question 6(b) Regarding Tokenized Securities

Security

Type

Corporate Equity Securities

(market cap <= $300 million)

Corporate Equity Securities

(market cap > $300 million)

Corporate Debt Securities

Non-Exchange Traded Open End

Investment Company Securities

Exchange-Traded Funds

Closed End Investment Company

Securities

Limited Partnership Securities

Municipal Debt Securities

Other Securities

Total

110

Number of Issues Serviced by the Registrant

by Tokenized Security Model

(as of December 31)

Issuer-Sponsored

Third-Party-Sponsored

Tokenized Securities

See Statement on Tokenized Securities, Division of Corporation Finance, Division of Investment

Management, Division of Trading and Markets (Jan. 28, 2026), available at

https://www.sec.gov/newsroom/speeches-statements/corp-fin-statement-tokenized-securities-012826statement-tokenized-securities (stating that, with respect to third-party sponsored tokenized securities, the

models that third parties are using to tokenize securities vary, and the rights, obligations, and benefits

associated with the crypto asset may or may not be materially different from those of the underlying

security, the crypto asset may or may not represent an ownership interest in or contractual obligation of the

issuer of the underlying security, and holders of the crypto asset may be exposed to risks with respect to the

third party, such as bankruptcy, to which a holder of the underlying security would not necessarily be

exposed). That statement and any other staff statement referenced in this release is not a rule, regulation,

guidance, or statement of the Commission, and the Commission has neither approved nor disapproved its

content. Staff statements have no legal force or effect: they do not alter or amend applicable law, and they

create no new or additional obligations for any person.

e. List of Issues Serviced

To ensure that the data provided on Form TA-2 is relevant to the types and volume of

securities serviced by modern transfer agents, and therefore continues to support the

Commission’s statutory duties related to the oversight of transfer agents, Form TA-2 Question 13

(related documents/attachments) would be amended to require registrants to provide an

attachment to their Form TA-2 with a list of issues serviced as of December 31 of the reporting

period. The list should include, for each issue serviced, both the name of the issue and its

identification number from the master securityholder file. Under the existing rules, the

Commission does not know which transfer agent services a particular security. Having this

information on the Form TA-2 would address this gap and enable the Commission to more

efficiently address investor questions or concerns related to their interactions with transfer agents

to further support the Commission’s statutory mandate to protect investors, promote the prompt

and accurate clearance and settlement of securities transactions, and promote the safeguarding of

funds and securities.

4. Request for Comment

The Commission requests comments on all aspects of the proposed amendments to Form

TA-2. In particular, the Commission requests comments on the following:

13. Should the Commission amend Rule 17ac2-2 to require registered transfer

agents to file an amendment to Form TA-2 if they discover that any of the

information reported on Form TA-2 was materially inaccurate, misleading, or

incomplete at the time of filing? Should the Commission provide a definition

or examples of what would be “materially inaccurate, misleading, or

incomplete” in this context? How soon after a transfer agent discovers that

information reported on Form TA-2 was materially inaccurate, misleading, or

incomplete at the time of filing should a transfer agent be required to file an

amendment? Is within 60 days a sufficient amount of time, or should the

Commission consider a shorter or longer period of time?

14. Should the Commission require registered transfer agents to report all fund

movements to or from securityholders on Form TA-2 in proposed new

Question 7, rather than just dividend disbursements and interest payments as

required by the existing form? Would this broader reporting requirement

provide more useful information to the Commission in understanding a

transfer agent’s operational risks related to the safeguarding of securityholder

funds?

15. Should the Commission require registered transfer agents to report staffing

information on Form TA-2, including the number of employees engaged in

transfer agent functions or activities incidental thereto during the reporting

period in new Question 5(a)? Would this requirement fit the purpose of the

Form? Or, would other data be more appropriate to require on the Form such

as volume of transactions processed and error rates during the reporting

period?

16. What additional information should the Commission require to be reported on

Form TA-2 regarding a transfer agent’s recordkeeping practices?

17. Are the specific security types and categories in proposed Questions 4(c),

6(a), and 6(b) appropriate and sufficient to capture the full range of securities

for which transfer agents maintain securityholder accounts? Should any

security types or categories be added, removed, or modified?

18. Is the proposed methodology for calculating the number of individual

securityholder accounts in response to Question 4(b) clear and operationally

feasible for transfer agents? Are there alternative methodologies that would

be more accurate or easier for transfer agents to implement?

19. Are there additional types of service providers routinely used by transfer

agents that should be included in the list of service providers in Question

5(b)? Alternatively, should any service providers included in the proposed list

in Question 5(b) not be included? To what extent is the information that

would be reported in response to Question 5(b) duplicative of information that

would be provided in response to other questions, such as Question 4(e)?

20. Should the Commission require transfer agents to provide more detailed

information about their service provider arrangements, such as the specific

services provided or the oversight and monitoring procedures used to manage

associated risks? Alternatively, should the Commission require disclosure of

service provider arrangement information at all, or less detailed information

about their service provider arrangements?

21. Should the Commission require transfer agents to report on the number of

issues, by tokenization model and security type, serviced by the registrant as

of December 31 in new Question 6(b)? Are the specific tokenization models

proposed appropriate, clear, operationally feasible, and sufficient to capture

the full range of tokenization models used in connection with transfer agent

activities? Should any tokenization models be added, removed, or modified?

Should the Form TA-2 instead seek identification only of tokenized securities

more generally, as opposed to breaking the information out by tokenization

model? Would tokenized equity-linked notes be difficult for transfer agents to

categorize as issuer-sponsored or third-party sponsored in the proposed table?

If so, should the requirements of Question 6(b) be modified or clarified?

Should the Commission provide a sunset date for proposed Question 6(b) and

if so, what should be the trigger for such sunset date?

22. Is any information that would be required by the proposed changes to Form

TA-2 difficult for a transfer agent to provide? If so, why? Are there

alternative approaches to collecting the same information, such as providing

this information upon request, that would be less burdensome for transfer

agents while still providing the Commission with the information it needs to

fulfill its regulatory and oversight responsibilities?

23. Should any information not be publicly disclosed that would be required by

the proposed changes to Form TA-2?

24. Is there any additional information that the Commission should require to be

disclosed on Form TA-2, or conversely, should the Commission require less

information to be disclosed?

III. Proposed Amendments to Definitions, Processing, Recordkeeping, and Safeguarding

Rules

The Commission is proposing amendments to the definitions in Rules 17Ad-1 and

17Ad-9 to modernize the foundational terminology that governs the processing, turnaround,

recordkeeping, safeguarding, and compliance obligations of registered transfer agents.

When the Commission originally adopted these definitions, the securities markets

operated chiefly through the transfer of securities represented by physical certificates, and the

transfer of certificated securities was a complicated, time-intensive, manual process completed

over the course of multiple days and involving numerous in-person deliveries to and from

multiple parties. Definitions such as item, receipt, certificate detail, deposit shipment control

list, and control book were grounded in this physical environment and designed to reflect and

address the technological and operational needs and limitations of manual processing, paper

certificates, in-person deliveries, and mail-based communication.111 Today, however, the

technological and operational environment in which transfer agents operate has changed. The

Commission understands that nearly all transactions are electronic; most securities are held in

immobilized or uncertificated form; and transfer agents receive, validate, and process

instructions through automated systems, electronic platforms, and digital communication

channels. In addition, new and rapidly developing technologies, such as tokenized securities and

distributed ledger technology, continue to modify the environment in which transfer agents

operate, even as they present both new benefits and challenges.

The prompt and accurate clearance and settlement of securities transactions is a matter of

public interest, and clearly defined terms that accurately reflect the current operational and

technological environment in which registered transfer agents operate are necessary to give

practical effect to the Commission’s oversight of registered transfer agents and the national

111

See, e.g., Depository Shipment Control List Transfer Instructions; Definition of Item, Exchange Act

Release No. 23677 (Oct. 2, 1986), 51 FR 36547 (Oct. 14, 1986); see also Maintenance of Accurate

Securityholder Files and Safeguarding of Funds and Securities by Registered Transfer Agents, Exchange

Act Release No. 19860 (June 10, 1983), 48 FR 28231 (June 21, 1983) (“17ad-9 through 13 Adopting

Release”); Prompt Transfer of Securities; Transfer Agent Turnaround Performance Time Frame, Exchange

Act Release No. 21375 (Oct. 5 1984), 49 FR 40573 (Oct. 17, 1984).

clearance and settlement system.112 As the securities markets and transfer agent operations

continue to evolve, definitions that are both grounded in statutory authority and responsive to

technological and operational change would help the Commission to carry out its statutory

responsibilities under Section 17A of the Act, including its responsibility to protect investors, to

safeguard securities and funds, and to facilitate the prompt and accurate clearance and settlement

of securities transactions in a manner that keeps pace with the markets the Commission is

charged with overseeing.113 As discussed below, each of the proposed changes discussed in this

section seeks to ensure that the defined terms used in the Commission’s transfer agent rules

accurately reflect the current operational and technical environment in which transfer agents

operate, including the transition from a manual, paper-based environment to an automated,

electronic environment and beyond.

A. Amendments to Rule 17ad-1

Rule 17ad-1 defines relevant terms used throughout the rules. A fundamental term used

in the rules is “item,” which is the basic unit for which the turnaround and other processing

requirements apply.114 Other key definitions in Rule 17ad-1 are “transfer” and “turnaround.”115

The Commission is proposing amendments to the definitions of the terms “item,” “receipt,” and

“routine.”

112

See Exchange Act Section 3(a)(25), 15 U.S.C. 78(c)(a)(25).

113

See Section 17A(a)(2)(A) of the Exchange Act, 15 U.S.C. 78q-1(a)(2)(A).

114

See Rule 17Ad-1 through 17Ad-7 Adopting Release, supra note 50.

115

“Transfer” of a certificated security (where an outside registrar is not involved) is the completion of all acts

necessary to cancel the certificate, issue a new one, and make it available to the presentor, and

“turnaround” for an item (where an outside registrar is not involved) is completed when transfer is

accomplished. Exchange Act Rule 17ad-1(d), (e), 17 CFR 240.17Ad-1(d), (e). 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. Exchange Act Rule 17ad-1(b), 17 CFR 240.17Ad-1(b).

1. Item

Existing Rule 17ad-1(a)(1) defines the term item as: (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.116 The Commission proposes to amend the

definition of “item” to include two additional subsections within the definition: “(iv) A transfer

instruction submitted to the transfer agent through a deposit or withdrawal at custodian or

functionally similar service operated by a central securities depository; and (v) Any other transfer

instruction submitted to the transfer agent, or to an electronic system controlled, operated, or

enabled by the transfer agent, to be accomplished without the physical issuance of

certificates.”117

As noted, item is the basic unit for which the turnaround and other processing

requirements apply,118 and is an essential term used throughout the transfer agent rules, including

in other definitions discussed in this release. The Commission is proposing to amend the

definition of item to clearly and unambiguously include instructions relating to uncertificated

securities and capture new technologies and means of transmitting information to ensure that the

116

Exchange Act Rule 17ad-1(a)(1), 17 CFR 240.17Ad-1(a)(1).

117

See proposed Rule 17ad-1(a)(1).

118

See Rule 17ad-1 through 17ad-7 Adopting Release, supra note 50.

technology, platforms, and communication channels utilized by modern transfer agents are both

contemplated and permitted under the rules.

These amendments would include transfer instructions submitted through DTC’s

Deposit/Withdrawal at Custodian (“DWAC”) service and other electronic systems, which the

Commission understands are now the predominant means by which securities are transferred.

The proposed amendments are also designed to capture new and novel methods by which

transfer agents may receive instructions from presentors pursuant to the UCC.119 Finally, the

phrase “an electronic system controlled, operated, or enabled by the transfer agent” will ensure

that instructions transmitted by or through both existing technologies, such as blockchains and

other distributed ledger-based platforms and new, as yet unforeseen technologies, are captured by

the definition as proposed to be amended. These amendments would help ensure that Rule 17ad2’s turnaround and processing requirements apply uniformly to certificated and uncertificated

securities, regardless of the specific technology used to issue, transfer, or custody the securities,

and that new and potential future communication channels through which transfer instructions

are or could be initiated, are contemplated under the rule.

2. Receipt

Existing Rule 17ad-1(g) provides that “[t]he 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.”120

While the term “arrive” applies to both physical and electronic items, it reflects a focus on

physical items received by transfer agents—the transfer bundles from a bygone era discussed

119

See UCC §§ 8-107 and 8-401.

120

17 CFR 240.17Ad-1(g).

above—and is out of step with the electronic instructions that constitute most items received by

modern transfer agents. Similarly, existing Rule 17ad-2(a) specifies that “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.”121 Thus, for many years

transfer agents have set up their processing and recordkeeping systems to bifurcate each business

day for purposes of determining when items have been received and starting the clock for

turnaround. While this provision also applies with equal force to physical and electronic items, it

too reflects a focus on physical items received by transfer agents—the transfer bundles that, once

received at a mailbox or window, needed to be picked up, processed, and physically delivered to

an appropriate workspace on the transfer agent’s premises where the various confirmations,

examinations, and checks could be conducted. Accordingly, this provision is out of step with the

electronic instructions that constitute most items received by modern transfer agents, which are

transmitted at the speed of light and can be accessed from virtually any computer or workstation

authorized by the transfer agent.

The Commission proposes to amend the definition of “receipt” to provide that receipt

occurs on the business day when the item or written inquiry or request arrives at any premises at

which the transfer agent performs transfer agent functions or, in the case of an item or written

inquiry or request submitted in electronic form, the business day when the item or written inquiry

or request is received by the transfer agent.122 The proposed amendment would also provide that

if an item or written inquiry or request arrives or is received on a non-business day, receipt is

121

Exchange Act Rule 17ad-2(a), 17 CFR 240.17Ad-2(a). Rule 17ad-2(b) includes an identical provision for

items received by transfer agents acting as an outside registrar.

122

See proposed Rule 17ad-1(g).

deemed to occur on the next business day.123 The existing definition does not explicitly address

electronic transmissions or electronic deliveries, which are now a common means by which

transfer agents receive items and other communications. The proposed amendment would

specify that receipt of electronic transmissions occurs when the item or communication is

received by the transfer agent, as evidenced by, for example, a time stamp or other electronic

record. The proposed amendment would also acknowledge that arrival or receipt can occur at

any premises at which the transfer agent performs transfer agent functions, not just the principal

location, thereby reflecting the reality that many modern transfer agents operate from multiple

locations. These changes would help ensure that the definition of receipt is clear and applicable

to the full range of methods by which transfer agents receive items and communications in

today’s electronic environment.

3. Routine

Existing Rule 17ad-1(i) defines a “routine” item by listing eight categories of items that

are not routine, including paragraph 17ad-1(i)(2), which specifies that “a certificate as to which

the transfer agent has received notice of a stop order, adverse claim, or any other restriction on

transfer” would be considered a non-routine item.124 The Commission is proposing to replace

the reference to “certificate” in paragraph (i)(2) with “security” to ensure that the definition

applies equally to both certificated and uncertificated securities.125

123

Id.

124

17 CFR 240.17Ad-1(i).

125

See proposed Rule 17ad-1(i).

B. Amendments to Rule 17ad-9

Rule 17ad-9126 defines 12 principal terms with respect to transfer agents as used

especially in Rules 17ad-10 through 17ad-13: “certificate detail,” “master securityholder file,”

“subsidiary file,” “control book,” “credit,” “debit,” “record difference,” “record keeping transfer

agent,” “co-transfer agent,” “named transfer agent,” “service company,” and “file.”127 The

Commission is proposing amendments to all of the definitions in Rule 17ad-9 other than

“subsidiary file,” “co-transfer agent,” “named transfer agent,” “service company,” and “file.”

The Commission is also proposing to add three new defined terms: “authorized securities,”

“transfer journal,” and “presentor.”

1. Certificate Detail

Existing Rule 17ad-10 requires recordkeeping transfer agents to promptly and accurately

post credits and debits containing minimum and appropriate certificate detail to the master

securityholder file whenever a security is transferred, purchased, redeemed, or issued.128 The

certificate detail that must be posted to the master securityholder file is defined in existing Rule

17ad-9(a) and consists of eight specific “items” of information: (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

126

17 CFR 240.17Ad-9.

127

See 17ad-9 through 13 Proposing Release, supra note 9.

128

17 CFR 240.17Ad-10(a)(1).

information about securities and securityholders the transfer agent reasonably deems essential to

its recordkeeping system for the efficient and effective research of record differences.129 The

Commission is proposing to replace the term “certificate detail” with a neutral term that can

apply to any form of security, whether certificated or uncertificated, and to amend items one,

three, four, and eight, in the definition of certificate detail, as described more fully below.

The Commission proposes to amend the definition of “certificate detail” to reflect the

securities industry’s transition from a manual, paper-based environment to an automated,

electronic environment and to ensure that the Commission’s transfer agent rules appropriately

reflect and facilitate transfer agents’ use of new and emerging technologies in their

recordkeeping and operations. First, given that most securities today are uncertificated, the

Commission proposes to replace the term “certificate detail,” which signifies the use of a paper

certificate, with the term “position detail,” which is a neutral term that can apply to any form of

security, whether certificated or uncertificated.130 To ensure consistency throughout the rules, the

Commission proposes to make conforming changes in other rules that use the term certificate

detail as well, specifically throughout Rule 17ad-10,131 as discussed in more detail below, and by

amending the title of Rule 17ad-11.132

Second, the Commission is proposing to expand item one beyond solely a certificate

number for certificated securities. A certificate number is a uniqu

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