Monday, December 28, 2015

Transfer Agent Regulatory Regime May Get Long Awaited Update

By R. Jason Howard, J.D.

The SEC has voted to issue an advanced notice of proposed rulemaking addressing new requirements for transfer agents along with a concept release requesting public comment on the Commission’s broader review of transfer agent regulation.

Exiting Commissioner Luis Aguilar commended Chair White, Commissioners Stein and Piwowar and the staff for addressing an issue that has been a concern of his for some time. He urged the commenters to review the release closely and to provide thoughtful and informed views on the issues it discusses and he urged the Commission to move as quickly as possible toward proposing a set of carefully considered rules and amendments.

The advance notice, noting the importance of transfer agents within the national market structure, includes a history of transfer agent services and applicable regulations as well as an overview of current transfer agent services and activities, and requests comment on all topics.

The release includes an advance notice of proposed rulemaking in specific areas, such as transfer agent registration and reporting requirements, safeguarding of funds and securities, and revision of obsolete or outdated rules, along with requests for comment, as well as a concept release and request for comment addressing additional areas of specific Commission interest, including processing of book-entry securities, broker-dealer recordkeeping for beneficial owners, transfer agents to mutual funds, and administration of issuer plans.

Chair White said, “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. 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 longtime champions of transfer agent reform.”

There will be a 60-day public comment period for both the advanced notice of proposed rulemaking and the concept release following publication in the Federal Register.

The release is No. 34-76743.