Transfer Agent Rules

Federal RegisterSep 4, 2026

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SECURITIES AND EXCHANGE COMMISSION

17 CFR Parts 240 and 249b

[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/s7-2026-30/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/public-comments/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 NE, Washington, DC 20549-7010.

SUPPLEMENTARY INFORMATION:

The Commission is proposing to amend, rescind, or add the following rules and forms.

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 240.17Ad-30.

15 U.S.C. 78a

et seq.

Commission reference

CFR citation (17 CFR)

Proposal

Securities Exchange Act of 1934 (“Exchange Act” or “Act”)

Form TA-1

Referenced in 17 CFR 249b.100

Amend.

Form TA-2

Referenced in 17 CFR 249b.102

Amend.

Rule 17ac2-1

17 CFR 240.17Ac2-1

Amend.

Rule 17ac2-2

17 CFR 240.17Ac2-2

Amend.

Rule 17ad-1

17 CFR 240.17Ad-1

Amend.

Rule 17ad-2

17 CFR 240.17Ad-2

Amend.

Rule 17ad-3

17 CFR 240.17Ad-3

Amend.

Rule 17ad-4

17 CFR 240.17Ad-4

Rescind.

Rule 17ad-6

17 CFR 240.17Ad-6

Amend.

Rule 17ad-7

17 CFR 240.17ad-7

Amend.

Rule 17ad-9

17 CFR 240.17Ad-9

Amend.

Rule 17ad-10

17 CFR 240.17Ad-10

Amend.

Rule 17ad-11

17 CFR 240.17Ad-11

Amend.

Rule 17ad-12

17 CFR 240.17Ad-12

Amend.

Rule 17ad-13

17 CFR 240.17Ad-13

Amend.

Rule 17ad-17

17 CFR 240.17Ad-17

Amend.

Rule 17ad-30

17 CFR 240.17ad-30

Add.

Rule 17ad-31

17 CFR 240.17ad-31

Add.

Table of Contents

I. Introduction

A. Background Regarding Securities Ownership

B. Transfer Agent Regulation

C. Evolution of Transfer Agent Activities

D. Overview of the Proposal

II. Proposed Amendments to Registration and Annual Reporting Requirements

A. Proposed Amendments to Rule 17ac2-1

B. Proposed Amendments to Rule 17ac2-2

C. Proposed Amendments to Form TA-1

D. Proposed Amendments to Form TA-2

III. Proposed Amendments to Definitions, Processing, Recordkeeping, and Safeguarding Rules

A. Amendments to Rule 17ad-1

B. Amendments to Rule 17ad-9

C. New Definitions To Be Added to Rule 17ad-9

D. Amendments to Rule 17ad-2

E. Amendments to Rule 17ad-3

F. Rescission of Rule 17ad-4

G. Amendments to Rule 17ad-6

H. Amendments to Rule 17ad-7

I. Amendments to Rule 17ad-10

J. Amendments to Rule 17ad-12

K. Amendments to Rule 17ad-17

IV. Proposed New Rules

A. Proposed Rule 17ad-30: Compliance

B. Proposed Rule 17ad-31: Restrictive Legends

V. Economic Analysis

A. Introduction

B. Economic Baseline

C. Benefits and Costs

D. Efficiency, Competition, and Capital Formation

E. Reasonable Alternatives

F. Request for Comment

VI. Paperwork Reduction Act

A. Summary of the Collection of Information

B. 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.

C. Summary of the Estimated Burden of the Proposed Amendments on the Collections of Information

D. Initial and Ongoing Burden Estimates

E. Incremental and Aggregate Burden and Cost Estimate

F. Request for Comment

VII. Initial Regulatory Flexibility Act Analysis

VIII. Congressional Review Act

IX. Other Matters

Statutory Authority

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.

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.

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

The Commission first adopted the majority of the federal transfer agent rules in the late 1970s and early 1980s.

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.

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.

Transfer agents have adapted to the complex, interconnected electronic securities markets of today in numerous ways, including by providing a broad suite of services.

For example, in 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 legends

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.

See

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

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.

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.

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.

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”).

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 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.

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).

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 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.

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”).

Certificated securities are evidence that the owner is registered on the books of the issuer (or its transfer agent) as a securityholder.

Although the shares themselves represent an intangible right,

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.

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.

Id.

Guttman § 1:12.

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”).

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.

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.

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”)

own and hold securities in “registered form.”

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.”

Registered securityholders are listed directly on the records of the issuer 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.

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.

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.

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

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”

to, or an interest in, a pro rata share of the fungible bulk of that security held by the depository.

Correspondingly, the individual investor will be identified 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.

A securities intermediary satisfies such duties where the intermediary acts as required by any agreement between the intermediary and entitlement holder.

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

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 8-102(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 (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).

B. Transfer Agent Regulation

Prior to 1975, most transfer agents were banks or trusts.

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.

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”),

which made sweeping changes to the federal securities laws, implemented many of the principal recommendations from the Securities Industry Study,

and established both the national market system

and the national clearance and settlement system as they exist today.

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;”

(ii) “end the physical movement of securities certificates in connection with the settlement among brokers and dealers of transactions in securities;”

and (iii) establish a system for reporting missing, lost, counterfeit, and stolen securities.

Securities Acts Amendments of 1975, Public Law 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).

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);

(D) exchanging or converting such securities; or

(E) transferring record ownership of securities by bookkeeping entry without the physical issuance of securities certificates.

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.

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”).

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.

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).

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.

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.

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 investment-related criminal prosecutions, regulatory actions, or civil actions to which its control persons or affiliates have been subject.

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

A registrant must amend its Form TA-1 within 60 days following the date on which information reported therein becomes inaccurate, incomplete, or misleading.

Exchange Act Section 17A(c)(1), 15 U.S.C. 78q-1(c)(1); Exchange Act Rule 17ac2-1, 17 CFR 240.17Ac2-1; 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.

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”).

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).

Form TA-2 covers a calendar year reporting period that ends on December 31

and must be filed by March 31 of the year following the end of the reporting period.

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.

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 received,

turnaround performance, total amounts of funds distributed, and lost securityholder accounts.

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.

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 240.17Ac2-2(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).

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.

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 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.

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.

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.

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.

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.

The specific processing, reporting, and 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.

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.

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

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.”).

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.

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 securities.

The Commission believed that these additional minimum standards were critical to addressing seriously deficient transfer agent performance.

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

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 broker-dealers' costs associated with fails to settle and extended transfer delays.

Rule 17ad-17 was first adopted in 1997

and later amended at the beginning of 2013

and was designed to ensure that the transfer agents, brokers, dealers, and other financial intermediaries make adequate efforts to find lost securityholders.

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.

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.

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.

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.

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.

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).

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.

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.

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).

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

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

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

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.

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.

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.

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.

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 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.

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.

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.

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

See id.

(categorizing major types of corporate actions).

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 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,”

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.

Other aspects of the processing of the corporate action may cause the corporate action to be classified as non-routine as well.

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).

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 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.

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.

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.

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.

Most corporate issuers and securities intermediaries such as banks 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.

Typical transfer agent proxy services might include mailing or electronically transmitting notices of meetings,

proxy statements, and proxy cards

to securityholders.

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 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).

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 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.

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.

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.

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.

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 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.

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.

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.

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.

As discussed above, pursuant to that authority, transfer agents are required to file a Form TA-1 to register as a transfer agent, a Form TA-2 each year to provide annual disclosures, and a Form TA-W when they withdraw from registration.

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).

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 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 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.

See

Transfer Agent Data Sets,

https://www.sec.gov/data-research/sec-markets-data/transfer-agent-data-sets

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 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.

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.

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.

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.

However, Section 17A(c)(2) of the Exchange Act specifies that a transfer agent's registration shall become effective

days after receipt of the Form TA-1 application, or within such shorter period of time as the ARA may determine.

Exchange Act Rule 17ac2-1(a), 17 CFR 240.17Ac2-1(a); SEC Form TA-1, General Instruction G, 17 CFR 249b.100.

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

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.

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

B. 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 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.

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.

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).

C. 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 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

Proposed TA-1 requirement

1(a). Filer CIK

1(b). CCC

Form Instructions would be updated to provide full terms for abbreviations CIK and CCC.

1(f)(i-iii). Contact Name, Phone Number, Email Address

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.

3(a). Full Name of Registrant

Form Instructions would be updated to state that complete and accurate legal name is required.

6. Service companies (transfer agents) engaged by Registrant

Existing Question 6 would be removed; similar information disclosed on Form TA-2.

7. Registrant engagements to act as a service company

Existing Question 7 would be removed; similar information disclosed on Form TA-2.

8. Form of business organization

Checkboxes would be added for “Limited Liability Company” and “Trust.”

8(a). Section for Reporting Additional Persons (Disclosure of owners, control persons)

Form and Form Instructions would be updated to specify the individuals that must be disclosed in response to Question 8.

11(a-d). Signature Block

Form would be updated to include language regarding the Commission's authority to examine all records of registered transfer agents.

12. Attachments

Attachment would be required of organizational diagram depicting relationship between the transfer agent and its control affiliates.

None

New Question 3(f) would require disclosure of registrant's website address.

None

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.

None

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.

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 email 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.

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.”

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.

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.

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.

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 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.

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.

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.

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 Commission to better understand, for example, potential conflicts, concentration in the industry, and the potential disciplinary history of control persons.

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.

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.

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 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.

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.”

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,

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 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.

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

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.

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, 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 undertaking

102

—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

101

SEC Form TA-1, Question 10, 17 CFR 249b.100.

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.

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-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.

104

See, e.g.,

Form MA and Form Funding Portal, 17 CFR 249.1300 and 17 CFR 249.2000.

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.

105

Dodd-Frank Wall Street Reform and Consumer Protection Act., Public Law 111-203, 313, 124 Stat. 1376, 1523 (2010).

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 TA-1? 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 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 TA-2.

106

See

15 U.S.C. 78q-1(a)(2).

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.

Form Instructions would be updated to provide full terms for abbreviations CIK and CCC.

1(f)(i-iii). Contact Name, Contact Phone Number, Contact Email Address

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.

4(b). Number of individual securityholder accounts for which the TA maintained master securityholder files

Form Instructions would be updated with information regarding how to count the number of individual securityholder accounts.

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

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.

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:

Existing Question 6 would be removed.

New Question 6(a) would require registrant to provide similar data in a new table.

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

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

Existing Question 7(a) and 7(b) would be incorporated into new Question 6(a).

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)).

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 in-kind distributions to securityholders (not just dividend and interest disbursements).

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))

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.

13(a-e). Related Documents/Attachments

Attachment would be required for a list of all issues serviced by registrant.

None

New Questions 4(d) and (e) would require registrant to report on usage of physical certificates and distributed ledger technology during the reporting period.

None

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.

None

New Question 5(b) would require registrant to report certain service providers used during the reporting period.

None

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 email 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

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

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 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

Number of issues for which registrant provided the following services

(as of December 31)

Received items for transfer

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

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

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.

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.

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 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.

109

17 CFR 249b.102.

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);

• 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

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-012826-statement-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.

Figure 4: Proposed Question 6(b) Regarding Tokenized Securities

Security type

Number of issues serviced by the registrant

by tokenized security model

(as of December 31)

Issuer-sponsored

tokenized securities

Third-party-sponsored

tokenized securities

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

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.

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).

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 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.

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).

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.”

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

116

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

117

See

proposed Rule 17ad-1(a)(1).

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 technology, platforms, and communication channels utilized by modern transfer agents are both contemplated and permitted under the rules.

118

See

Rule 17ad-1 through 17ad-7 Adopting Release,

supra

note 50.

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 17ad-2'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.

119

See

UCC §§ 8-107 and 8-401.

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 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.

120

17 CFR 240.17ad-1(g).

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.

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 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.

122

See

proposed Rule 17ad-1(g).

123

Id.

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

124

17 CFR 240.17ad-1(i).

125

See

proposed Rule 17ad-1(i).

B. Amendments to Rule 17ad-9

Rule 17ad-9

126

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.”

126

17 CFR 240.17Ad-9.

127

See

17ad-9 through 13 Proposing Release,

supra

note 9.

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 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.

128

17 CFR 240.17Ad-10(a)(1).

129

17 CFR 240.17Ad-9(a).

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 r

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