Stock transfer
Encyclopedia
A stock transfer agent or share registry is a company, usually a third party unrelated to stock transactions, which cancels the name and certificate of the shareholder
who sold the share
s of stock
, and substitutes the new owner's name on the official master shareholder listing. Stock transfer agent is the term used in the United States and Canada. Share registry is used in the United Kingdom, Australia and New Zealand. Transfer secretary is used in South Africa.
A public company usually only designates one company to transfer its stock. Independent stock transfer agents are independent of large banks, but are fully capable of servicing even the largest companies, often at far less cost. Stock transfer agents also run annual meetings as inspector of elections, proxy voting
, and special meetings of shareholders. They are considered the official keeper of the corporate shareholder records.
s are issued in "street name
" which is the term given to securities held in the name of a broker
age on behalf of a customer, usually done to facilitate subsequent transactions. "Street name" refers to beneficial shareholder
s who maintain their ownership through a brokerage. Street name holders are the opposite of registered holders.
. A medallion guarantee is also used to validate the genuineness of a document. It is backed by a bond and protects the issuer of the security and their transfer agent from fraudulently transferred securities. A medallion guarantee may be obtained from most major banks, brokerage firms or credit unions.
Registering with the U.S. Securities and Exchange Commission and Financial Industry Regulatory Authority
is typically a legal requirement to operate in the U.S.
Shareholder
A shareholder or stockholder is an individual or institution that legally owns one or more shares of stock in a public or private corporation. Shareholders own the stock, but not the corporation itself ....
who sold the share
Share (finance)
A joint stock company divides its capital into units of equal denomination. Each unit is called a share. These units are offered for sale to raise capital. This is termed as issuing shares. A person who buys share/shares of the company is called a shareholder, and by acquiring share or shares in...
s of stock
Stock
The capital stock of a business entity represents the original capital paid into or invested in the business by its founders. It serves as a security for the creditors of a business since it cannot be withdrawn to the detriment of the creditors...
, and substitutes the new owner's name on the official master shareholder listing. Stock transfer agent is the term used in the United States and Canada. Share registry is used in the United Kingdom, Australia and New Zealand. Transfer secretary is used in South Africa.
A public company usually only designates one company to transfer its stock. Independent stock transfer agents are independent of large banks, but are fully capable of servicing even the largest companies, often at far less cost. Stock transfer agents also run annual meetings as inspector of elections, proxy voting
Proxy voting
Proxy voting has two forms: delegable voting and delegated voting, which are procedures for the delegation to another member of a voting body of that member's power to vote in his absence, and/or for the selection of additional representatives, as in the case with transitive proxies...
, and special meetings of shareholders. They are considered the official keeper of the corporate shareholder records.
Street name
The shareShare (finance)
A joint stock company divides its capital into units of equal denomination. Each unit is called a share. These units are offered for sale to raise capital. This is termed as issuing shares. A person who buys share/shares of the company is called a shareholder, and by acquiring share or shares in...
s are issued in "street name
Street name securities
In the United States street name securities are securities of publicly traded companies held electronically in the account of a stock broker, similar to a bank account. The actual shareholder is referred to as the beneficial owner. In the United Kingdom this is known as holding shares in a...
" which is the term given to securities held in the name of a broker
Broker
A broker is a party that arranges transactions between a buyer and a seller, and gets a commission when the deal is executed. A broker who also acts as a seller or as a buyer becomes a principal party to the deal...
age on behalf of a customer, usually done to facilitate subsequent transactions. "Street name" refers to beneficial shareholder
Beneficial owner
Beneficial owner is a legal term where specific property rights in equity belong to a person even though legal title of the property belongs to another person. Black's Law Dictionary...
s who maintain their ownership through a brokerage. Street name holders are the opposite of registered holders.
United States
Stock transfer agents verify genuinity of owners of stock through signature guarantees. A signature guarantee is a warranty by the signature guarantor that the endorser of a stock certificate or stock power form is an appropriate person to endorse and thus transfer the security. Signatures on a stock certificate or stock power must have the medallion guaranteeMedallion signature guarantee
In the United States, a medallion signature guarantee is a special signature guarantee for the transfer of securities. It is a guarantee by the transferring financial institution that the signature is genuine and the financial institution accepts liability for any forgery. Signature guarantees...
. A medallion guarantee is also used to validate the genuineness of a document. It is backed by a bond and protects the issuer of the security and their transfer agent from fraudulently transferred securities. A medallion guarantee may be obtained from most major banks, brokerage firms or credit unions.
Registering with the U.S. Securities and Exchange Commission and Financial Industry Regulatory Authority
Financial Industry Regulatory Authority
In the United States, the Financial Industry Regulatory Authority, Inc., or FINRA, is a private corporation that acts as a self-regulatory organization . FINRA is the successor to the National Association of Securities Dealers, Inc. ...
is typically a legal requirement to operate in the U.S.