Millions of shareholders who regularly interact with transfer agents don`t know who we are or what we do. Here`s a quick look at the world of a transfer agent. Companies that have publicly traded securities typically use transfer agents to track the complex network of people and companies that own their shares and bonds. According to the SEC, most transfer agents are banks or trusts, or sometimes a company acts as its own transfer agent. A transfer agent assumes all administrative burdens related to tracking and recording changes in ownership of shares, correspondence with shareholders, cancellation and issuance of certificates, and distribution of dividends and tax records. For a publicly traded company with strict SEC filing requirements, outsourcing these fees to a transfer agent makes sense. From a compliance perspective, it`s usually far too complex, time-consuming, and risky to do it alone. It is part of the Company`s fiduciary responsibility to its shareholders to ensure that all investor records, account balances and transactions are protected and closely monitored. Transfer agents fulfil this important role by keeping records and providing timely and reliable information to investors.
Since a transfer agent is responsible for hosting and maintaining a company`s most critical information, the investor database, it is not uncommon for a transfer agent to offer additional services related to the investor`s experience and even the accounting and reporting of the fund`s assets: from services to the entire back office of the fund company. A transfer agent that provides extensive back-office services that affect investors, assets, and even sales teams is commonly referred to as a fund administrator. A transfer agent is a financial services company that manages and tracks registered shareholders for companies that issue shares. As a transfer agent, EQ manages the files, reports and communications of hundreds of U.S. companies and their millions of shareholders around the world. Ordinary and preferred shareholders have the right to vote on important decisions of the company such as merger activities and the sale of companies. These votes are facilitated by transfer agents who send proxy information to shareholders. A transfer agent performs an important function, but many small startups don`t understand what a transfer agent is, and so, ironically, they also don`t know they don`t have to hire one. This can lead to confusion and unnecessarily hire a registered transfer agent. Control.
Important shareholder-investor relationships, as well as company data, are valuable assets, and you may want to keep control of them within your four walls. While most transfer agents offer adequate security and privacy, it`s almost always true that the fewer hands that touch your data, the better. It`s surprising how often we get calls from startups or other private companies that are interested in our stock management software but cling to a sticky (they think) topic. “But what do we do with our transfer agent?” The problem is easily solved by dispelling the misconception that just because you have shares, you need a transfer agent. Stock transfer agents operating in the United States must register with the U.S. Securities and Exchange Commission or a banking regulator. [5] Transfer agents make distributions to investors based on the Registrar`s records. For example, transfer agents send interest payments to bondholders as well as the face value of their bonds as soon as they mature. Similarly, transfer agents send cash dividends to equity investors once the companies in which they invest make sufficient profits. The fact is that the vast majority of private companies do not need a transfer agent at all.
While these SEC-registered service providers are essential to meet the complex tracking and registration needs of public (or publicly traded) companies, they represent unnecessary costs for most private companies. A transfer agent is familiar with the complexity of SEC decisions and government regulations regarding securities trading and tracking. We help listed companies keep abreast of regulatory changes and implement appropriate measures on behalf of our clients. We make sure to align with industry experts, systematically plan for new regulations, and advocate on behalf of our clients when regulations are unclear. .