SEC Moves to Update Transfer Agent Rules; New Rules Likely to Impact Unclaimed Property and Cybersecurity

On December 22, 2015, the Securities and Exchange Commission took the first step in overhauling SEC regulation of transfer agents, the little-discussed but critical intermediaries involved in the prompt clearance and settlement of almost all U.S. securities. After many years in which other types of financial market intermediaries took center stage on the SEC’s rulemaking agenda, the Commission issued an advance notice of proposed rulemaking (ANPR) for new requirements for transfer agents, together with a concept release requesting public comment on the SEC’s broader review of transfer agent regulation. The ANPR and the concept release make clear that the SEC intends to modernize the rules applicable to transfer agents, with the SEC acknowledging that its transfer agent rules, first adopted in 1977, are now out of step with the actual practices of transfer agents and the structure of today’s securities markets. Among the areas the SEC identifies as ripe for rulemaking are a transfer agent’s role with respect to unclaimed property, and transfer agent standards for protecting data from cyber attacks.

View the full legal alert.

Back to top