Securities Transfer Association Annual Conference Shines Light on Industry Changes

By: Roger Behling


Transfer agents, issuers, SEC, DTCC, and other service and technology providers recently gathered for the 105th annual Securities and Transfer Association (STA) conference. Participants learned about and discussed important topics including the SEC concept release for transfer agents, T+2 (shortened settlement cycle) rollout – effective September, 2017, and evolving cost basis reporting rules.

Traditionally focused on equities, this year the association also created a new debt securities operating committee to focus on issues facing debt processing.

Here are some discussion highlights:

Transfer Agents

Currently, transfer agents are regulated by the SEC under rule 17AD, which governs the safeguarding of funds and securities the agent controls and the functions the agent performs with these securities. Drafted in the 70s and last updated in the 80s, the rules are outdated and, in some cases, irrelevant to the current market.

Transfer agents must demonstrate adherence to rule 17AD by submitting TA2 reports. In 2015, the SEC published a concept release that outlines changes for transfer agents. These include improved agreements between issuers and agents (e.g. termination provisions), safeguarding and separation of client and shareholder funds, requirements for written and tested business continuity and cyber security plans, and modifications to annual TA2 filings. STA and other industry groups have commented on these proposed changes and continue to monitor the direction of this regulation.

The impact of T+2 on transfer agent systems is expected to be minimal. Visit the T2 Settlement website to learn more.

Cost Basis Reporting

While the regulations for cost basis accounting are already in effect for equity and debt securities, many still wonder how to handle cost basis for different scenarios. Best practices, coverage interpretations, and impact on transfer agent operations were discussed, as were opportunities for efficiencies and improved straight-through processing.

Participants expressed the desire for enhanced processing related to the electronic deposit and withdrawal of eligible securities into and out of participant accounts.

Navigating the Changes

SS&C’s Global Debt Manager (GDM) provides full paying and transfer agent support for all debt and structured securities. It gives clients a technically modern and flexible platform to implement all the newest features so you can smoothly navigate any industry change. SS&C believes in strong partnerships and customer relationships. We work closely with our clients, DTCC, and other market participants to ensure our products and offerings are the best in the industry. Request a demo to learn how our Global Debt Manager can streamline workflow processes for your firm.  

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