SEC Seeks Public Comment on Transfer Agent Rules

The Securities and Exchange Commission today voted to issue an advanced notice of proposed rulemaking (ANPR) for new requirements for transfer agents, together with a concept release requesting public comment on the Commission’s broader review of transfer agent regulation.

The ANPR and concept release provide a summary of the history of the national clearance and settlement system, the role of transfer agents within that system, and the origins and current status of the Commission’s transfer agent rules.

The Commission also identifies in the ANPR certain areas in which it intends to propose specific rules or rule amendments, including registration and annual reporting requirements, safeguarding of funds and securities, antifraud requirements in connection with the issuance and transfer of restricted securities, and cybersecurity and information technology, among others.

The concept release seeks comment on a broader range of issues to help inform the Commission’s consideration of additional rulemaking.  These include the processing of book entry securities, bank and broker-dealer recordkeeping for beneficial owners, administration of issuer plans, outsourcing and the role of transfer agents to mutual funds and crowdfunding.

“Transfer agents increasingly play critical roles in the securities markets and our rules need to be updated and enhanced to ensure that investors and our markets are optimally served,” said SEC Chair Mary Jo White.  “The need for transfer agent reform has been recognized and supported by all of the Commissioners and today’s recommendations are a significant step forward. I want to thank all of the Commissioners for their input and specifically acknowledge Commissioner Luis Aguilar and former Commissioner Daniel Gallagher, who have been long-time champions of transfer agent reform.”

There will be a 60-day public comment period for both the ANPR and the concept release following publication in the Federal Register.