How STC Works
A transfer agent’s primary function is maintaining accurate shareholder records for clients, with a focus on the issuance, cancellation, and transfer of shares between the company, its shareholders, and the brokerage community. Transfer Agents also process corporate actions (stock splits, name changes, mergers) and pay dividends and distributions to your securityholders on your behalf. To learn more about what a transfer agent does, click here.
A partnership with a transfer agent can be beneficial regardless of whether you are a private or publicly traded company. Leveraging a trusted source to oversee your cap table management, handle shareholder communication and access, and administer all of your back-office needs enables you to focus on growing your Company. Let us handle the additional work and regulatory burdens that accompany these functions instead of keeping them in-house.
Partnering with a transfer agent is an important decision. Finding an agent with the right balance of experience, cost and customer service is often difficult. You should consider how long the agent has been in business, and their experience with the service offerings applicable to your Company. You should also consider what the shareholder experience will be like with the potential agent. When your shareholders call the agent are they getting a callcenter or a direct account representative? Will you or they be charged per phone call? What are the expected response times to inquiries? Often
your transfer agent is your direct contact with your securityholders, and their experience with the transfer agent is critical.
Changing your transfer agent involves notifying your current transfer agent that you are terminating your service with them and contracting with your new transfer agent to service your company. Your prior transfer agent and STC will both make required regulatory filings with the DTCC, and you must satisfy any existing contractual obligations you have with your current agent. Typically, this process can take between 10 and 30 days. Please contact us to learn how we can help you make a seamless transition.
STC accepts payment via credit card, wire, ACH or check. Please contact our Accounting Team (accounting@stctransfer.com) with any questions.
About DTC Eligibility
The Depository Trust Company is a subsidiary of the Depository Trust and Clearing Corporation Company (DTCC) and is the primary securities depository for the United States and is the world’s largest securities depository. DTC acts as a limited purpose trust company and provides safekeeping through electronic and physical certificated record-keeping of securities balances. They also act as a clearinghouse to settle trades. They accept more than 3.6 million individual securities for deposit and holds in excess of 35 trillion dollars’ worth of securities. As a clearing agency registered with the SEC, DTC provides security custody and book-entry transfer services for securities transactions in the U.S. market involving equities, corporate and municipal debt, money market instruments, American depositary receipts, and exchange-traded funds. In accordance with its rules, DTC accepts deposits of securities from its participants (i.e., broker- dealers and banks), credits those securities to the depositing participants’ accounts, and effects book-entry movements of those securities. DTC holds securities through its nominee Cede & Co.
There are 4 levels of eligibility with DTC:
Level 1 – CUSTODY Only
DTC will only accept physical certificates for deposit. While the securities will clear through DTC, the securities will remain registered in either the beneficial holders name or in the name of the broker presenting them to DTC – they will not be transferred into the name of Cede & CO.
Level 2 – DTC Eligible
Only physical certificates can be deposited with DTC. DTC has the ability to serve as the custodian and may hold securities in its nominee name, “CEDE & Co.”
Level 3 – FAST Eligible
The FAST (Fast Automated Securities Transfer) program allows DTC to hold securities in book entry format. This level of eligibility provides security holders the ability to deposit and withdraw shares electronically to a brokerage account. FAST eligibility automatically includes access to the DWAC (Deposit Withdrawal at Custodian) system. This is the primary method of electronically depositing or withdrawing securities from a brokerage account. The fees for this service are automatically billed to the security holders brokerage account.
Level 4 – DRS Eligible
DRS eligibility provides security holders an alternative to the DWAC system. It allows security holders to hold their securities in in book entry form directly with the issuer. DRS transactions do not require a physical medallion signature guarantee as the medallion guarantee is built into the system. Once a broker initiates a DRS transaction the transaction includes the signature medallion protections for the transaction. This can make DRS transactions significantly easier for security holders. This level of eligibility is part of the listing requirements for senior exchanges.
About EDGAR Filing
Filing a registration statement under Section 12(b) or 12(g) of the Exchange Act is the most common way a Company becomes subject to ongoing disclosure requirements, but companies may also fall under the Exchange Act reporting requirements if it has more than $10 million in total assets and a class of equity securities that is held by either 2,000 or more persons or 500 or more persons who are not accredited investors, or it lists the securities on a U.S. exchange. If you would like to learn more about our EDGAR services, click here.
Before being able to start selling securities in the open public market, companies must first register their securities with the U.S. Securities and Exchange Commission, file annual reports with the SEC, and comply with the Securities Exchange Act disclosure rule. STC can help with filing the required Form 10, Form 1-A, or Form S-1. To learn more about the different forms, please contact us.
Fund Administration
If a dividend check is lost, you may request a replacement check by contacting us. Securities Transfer Corporation will place a stop payment on the original check and issue a replacement. Please allow 10 days from the dividend payment date before requesting a replacement check.
A Fund Administrator supports all recordkeeping aspects throughout the lifespan of your fund
from the initial capital raise through its maturity. Some of the services STC offers include the
following:
- Assisting with audits and financial reporting
- Management of funds within an escrow account
- Subscription processing for offerings
- Online access for investors and financial advisors
- Shareholder statements reflecting individual investments
- Fund accounting services
- Managing periodic distribution payments to investors
For more information on Fund Administration, please click here.
Issuer
STC can assist you in acquiring a Non-Objecting Beneficial Owner (“NOBO”) List that will show the names and addresses for all Non-Objecting Beneficial Owners. Because of SEC proxy rules, certain holders may object to their identity and holdings being shared with the issuer. These holders are called objecting beneficial owners or OBOs. To learn more, contact us.
If you are considering a name change or stock split, you should reach out to our issuer services department who can assist you with a detailed explanation tailored to the corporate action you are considering. In general, your company will have to notify the relevant stock exchange your securities are listed on or if you trade over the counter, you must notify FINRA. Our issuer services department can assist you and your counsel with making the required notifications through the exchange or through FINRA’s issuer notification portal. Once you have notified the relevant regulator, FINRA or the exchange will reach out to STC to request certain information and confirmations which must be provided by your transfer agent. Once the exchange or FINRA announces the corporate action and its effective date, STC will process the corporate action on your behalf. If you have additional questions about the process, reach out to our Issuer Services Department at 469-633-0101 or contact us.
Transfer Services
Changing the registration on your security involves a transfer of ownership. To effectively change the registration, there are several pieces of information that must be provided to the transfer agent. To learn more about specific requirements for a transfer, click here.
If the shares are registered in a Joint Tenancy with rights of survivorship (“JTWROS”), then the death of one of the joint tenants results in the surviving tenant being the sole owner of those shares. If the shares are registered in with a Transfer on Death (“TOD”) Beneficiary, then the beneficiary becomes the owner once the holder passes. In most cases, additional documentation will be necessary to complete the transfer. Click here to review the required documentation.
XBRL Filing
The 4 main financial statements that must be tagged are: The Balance Sheet, the Statement of Operations, the Statement of Cash Flows, and the Stockholder’s Equity. All pertinent financial information within your Notes to Financials will also need to be tagged.
No. Only files that contain financial reporting need to be tagged. This includes a form 10-K, 10-Q, 40-F, and 20-F, with the last two only needed XBRL tagging if they are being used as annual reports.
The SEC requires your company to file inline XBRL starting June 15, 2019 for large accelerated filers, June 15, 2020 for accelerated filers, and June 15, 2021 for all other filers.
The tagging process depends on how complex your financial statements and notes to financials are. To learn more, visit our EDGAR page or please reach out to our EDGAR Department at 469-633-0101.