Rule 17Ad-3(b) mandates registered transfer agents notify the CEO of each issuer they serve if the agent fails to meet certain performance standards on 75% of items for 2 consecutive months.
1 transfer agent is called out as impacted by the rule & required to report.
Wut mean?:
- The rule mandates registered transfer agents to notify the CEO of each issuer they serve if the agent fails to meet certain performance standards on 75% of items for two consecutive months. This notification acts as a warning to the issuer regarding the agent's compliance issues.
- If the issuer doesn't receive such notice, it can't take action to fix the problem or find a new transfer agent.
- Only one transfer agent is expected to be impacted by this rule each year.
- If a transfer agent fails to meet requirements, they need to send a notice to their issuer-clients, which is estimated to take about 4 hours and cost approximately $1,128 annually.
- The SEC is inviting comments on the necessity, accuracy, clarity, and potential ways to reduce the burden of this information collection.
Rule 17Ad-2(c), (d), and (h):
Wut mean?:
- (a) Transfer agents must process at least 90% of all routine items within three business days of receipt in a month. Items received at/before noon are considered received at noon that day. Items after noon or on non-business days are considered received at noon the next business day.
- (b) Transfer agents acting as outside registrars must process 90% of items by the next business day's start for items received at/before noon. If received after noon, they should process by noon the following day. Items received on non-business days are considered received before noon on the next business day.
- (c) If a transfer agent doesn't comply with (a), they must file a detailed notice within ten days after the month ends. The notice should include the number of routine items, the number not turned around as required, reasons for failure, and corrective steps taken or planned.
- (d) If a transfer agent doesn't comply with (b), they must similarly file a notice within ten days of the month's end. This notice should detail items received, those not processed as required, reasons for the failure, and corrective measures.
(h) Notices required by this section should be filed as follows:
- (1) For the SEC: Three copies at their principal office in Washington, DC, and another copy at the regional office if the SEC is the regulatory agency.
- (2) For the Comptroller of the Currency: File with their office in Washington, DC.
- (3) For the Board of Governors of the Federal Reserve System: File with their board in Washington, DC, and with the local Federal Reserve Bank.
- (4) For the Federal Deposit Insurance Corporation: File with their office in Washington, DC.
How could this impact Computershare (speculation)?
Computershare process a ton of DRS requests for GameStop and must abide by this turnaround rule. As we have discussed on the sub previously, Computershare has already called out brokers and their hijinks messing with this:
"we are concerned with the risk that broker-dealer practices and processes may restrict efficient access to the market for retail investors who exercise their right to be directly registered with the issuer"
- If there's a failure to comply with the required turnaround and processing times, Computershare needs to be filing these notices with RC, SEC, Comptroller of the Currency, the Fed, and FDIC.
One transfer agent is called out above being affected by this...
- I wonder if Computershare can tell us if they have had to file this or not in conjunction with our DRS requests?
How to comment:
- send written feedback to David Bottom at the Securities and Exchange Commission, addressed via John Pezzullo at 100 F Street, NE, Washington, DC 20549,
- Email [email protected] subject [SEC File No. 270-424, OMB Control No. 3235-0473]
- Comments due by 9/29/23
TLDRS:
Request to continue collecting information for Rule 17Ad-3(b) that mandates registered transfer agents notify the CEO of each issuer they serve if the agent fails to meet certain performance standards on 75% of items for 2 consecutive months.
- 1 transfer agent is called out as impacted by the rule & required to report...
- Email [email protected] subject [SEC File No. 270-424, OMB Control No. 3235-0473]
Computershare has already called out brokers and their hijinks messing with this:
"we are concerned with the risk that broker-dealer practices and processes may restrict efficient access to the market for retail investors who exercise their right to be directly registered with the issuer"
- If there's a failure to comply with the required turnaround and processing times, Computershare needs to be filing these notices with RC, SEC, Comptroller of the Currency, the Fed, and FDIC.
- I wonder if Computershare can tell us if they have had to file this or not in conjunction with our DRS requests?
