Transfer Agent Definition and Legal Meaning

On this page, you'll find the legal definition and meaning of Transfer Agent, written in plain English, along with examples of how it is used.

What is Transfer Agent?

A transfer agent is a person or company retained by a corporation who assists in securities transactions to process trasfers and registration of stock certificates.

History and Meaning of Transfer Agent

Transfer agents have been around for centuries, but their role has evolved over time with the changing economy and advancements in technology. In the past, transfer agents would physically issue and cancel stock and bond certificates and maintain records of who owned these securities. With the rise of digital trading, the role of the transfer agent has changed to managing electronic records of ownership and processing stock transfers between buyers and sellers.

A transfer agent is a third-party company that works with corporations to help manage their securities, and is typically authorized by the Securities and Exchange Commission (SEC) to perform these tasks. They play a critical role in maintaining accurate records of ownership, ensuring that securities transactions are processed correctly, and assisting shareholders with any questions or issues that arise.

Examples of Transfer Agent

  1. A shareholder wants to transfer their ownership in a company to their spouse or child, and submits the necessary paperwork to the transfer agent to process the transaction.
  2. A corporation hires a transfer agent to manage the issuance and transfer of their stock, ensuring that ownership records are accurate and up-to-date.
  3. An investor contacts the transfer agent to inquire about their current holdings in a particular company, and the transfer agent provides them with the necessary information.

Legal Terms Similar to Transfer Agent

  1. Registrar - a registrar is similar to a transfer agent, but focuses specifically on managing records of bond or debt securities.
  2. Securities and Exchange Commission (SEC) - the government agency responsible for regulating the securities industry, including transfer agents.
  3. Securities Act of 1933 - a federal law that requires companies to register their securities with the SEC in order to offer them for sale to the public. Transfer agents play a crucial role in this process.