Overview

The Securities and Exchange Commission is proposing amendments to certain transfer agent rules regarding turnaround time, recordkeeping, and safekeeping of funds. The Commission is proposing these rules in light of the changes in the clearance and settlement of corporate securities from five days after the trade ("T+5') to three days after the trade ("T+3') and the proposal to establish a transfer agent operated book-entry registration system (hereinafter referred to as the "direct registration system' or "DRS'). The proposed amendments to the transfer agent rules are designed to minimize disruptions, delays, and financial losses in the securities markets, particularly in the national clearance and settlement system for securities, that may be caused by poor turnaround performance, substandard or inaccurate recordkeeping practices, and inadequate safekeeping procedures. The Commission also is soliciting comment on whether additional rules are needed in light of T+3 and DRS, including net worth and insurance requirements.