August 15, 2006
I may be too late to respond to this but I have a couple of concerns about this proposal. I work for a company which is relatively small in terms of the number of shareholders, and have always been able to act as our own transfer agent. We have, however, also utilized a co-agent, which is a large commercial bank, to handle the work done by DTC and is DRS approved.
My concern is that this proposal would potentially eliminate our role as a transfer agent. Since there can only be one transfer agent per company registered with DTC under the DRS model, we would be forced to eliminate our role as the transfer agent in favor of our co-agent since they are more qualified to do DRS service. That will be to the determent of our shareholders since we are able to provide better service to our shareholders internally than forcing them to go to a large commercial agent. Over the years we have received many favorable comments about our prompt, accurate, and friendly service from shareholders which, in many cases, is in stark contrast to the service they have received from working with large commercial agents on other share holdings they may have. Therefore, this rule will force out many transfer agents which act direclty for the issuer.
My second concern is that a majority of our shareholders are retired-age and like the ability to have a physical piece of paper in hand...especially in light of all of the recent on-line scandals that have occurred. Therefore, forcing companies like ours to implement the DRS model will only make it more unproductive and costly since we will need to amend our bylaws and articles of incorporation to allow for book-only holdings. And in the end, we will most likely still have to issue out stock certificates to a majority of our holders since that will be there preference.
Thanks for the opportunity to respond to this proposal