SEC Renovates the Regulations Regarding The Lost Holders of Securities

Tuesday, January 15, 2013 Print Email

The Security and Exchange commission decided to follow a new set of rules for the lost holders of Securities, a new report said.

The Securities and Exchange commission wants a fair deal in the market and it has asked the brokers and dealers to search for the holders of securities whose contacts are lost. This rule is also applicable to the transfer agents who keeps the records and to those who work as a mediator between the clearing house and the broker dealer. The applications are extended to the broker-dealers so that they have the same obligation and this is done exclusively by the Dodd-Frank Wall street reform and Consumer Protection Act. The innovative strategy and other dealers also require broker-dealers and different securities market participants to send notifications to those who have not made the appropriate checks so that they can receive information about their security holdings.

The new set of rules and regulations in the system is helpful when they provide suitable check ups regarding the lost holders and the transfer agents. This check ups are also needed to be done by the paying agents which includes some kind of issuers, broker-dealers, transfer agents and some other entities. The “ unresponsive payees” should be given notice by the paying agents and they should check if the person has been negotiated by someone. However, these paying agents exclude some of the notifications whose value are less than $25. Also you should add a rule that the notifications which are issued by the paying agents have no effect on the capability of the state to collect money from those which are abandoned by the state laws.

You should make a scientific rule so that the notifications made by the broker-dealers so you have no obligations regarding the holders of securities who have lost or the unresponsive payees. The real rule – Rule 17Ad – 17 needs only those transfer agents who did the job of the recordkeeping operations and just collecting the address of “lost security holders” to do a database search. This particular theory can be harmful for them because they no longer needed the corporate communication for any sort of interest and dividend related payments which are required by the holders of securities because it might be termed as abandoned under the state laws. 

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