Transfer agents are responsible for maintaining the ownership records of a securities issuer. This includes processing transfers of ownership, canceling certificates when sold, and issuing certificates to new owners.
The rule, which will come into effect on May 31, 2001 is in line with Rule 17Ad-7 under the Securities Exchange Act of 1934. The rule was modified to reflect comments received from industry participants.
Transfer agents are
The rule requires transfer agents that choose to maintain their records using electronic or micrographic storage media to:
- use storage mechanisms that are designed to ensure the accessibility, security, and integrity of the records, detect attempts to alter or remove the records, and provide a means to recover altered, damaged, or lost records;
- create an index of the records that are electronically or micrographically stored and store the index with the underlying records;
- keep a duplicate of all records and indexes that are stored using electronic or micrographic storage media;
- be able to promptly download electronically or micrographically stored records to an alternate medium such as paper, microfilm, or microfiche; and
- keep in escrow an updated copy of the software or other information that is necessary to access and download electronically stored records.
Under these conditions, transfer agents are obligated to have the index and the stored records available at all times for review by SEC examiners.
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