January 16, 1996
TO: BANK BROKER/DEALER ADVISORY COMMITTEE No. 2-96
BROKER/DEALER ADVISORY COMMITTEE No. 2-96
OPERATIONS MEMBERS No. 4-96
TRANSFER AGENT ADVISORY COMMITTEE No. 4-96
RE: GUIDELINES FOR LOST SHAREHOLDER LOCATION EFFORTS
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Attached is a document prepared by a task force of the Institute’s Transfer Agent
Advisory Committee with suggested guidelines for locating lost shareholders. The lost
shareholder location guidelines were developed by the task force in response to the Securities
and Exchange Commission’s interest in this area. The SEC first considered establishing lost
shareholder rules two years ago as a result of a Congressional subcommittee report indicating
that transfer agents, issuers, and states were negligent in their efforts to locate lost shareholders.
(TAAC 45-93)
In 1994, the SEC contacted the Securities Transfer Association (STA) to determine its
members current practices and policies with respect to locating lost shareholders. In their
memo to the STA, the SEC asked for their assistance in determining "what, if any, regulatory
action the Commission should take regarding the procedures transfer agents should use to find
lost securityholders." In response, the STA developed suggested voluntary guidelines for its
members. These guidelines are included in this document.
The Transfer Agent Advisory Committee has tracked industry practices concerning
escheat compliance and shareholder location efforts for many years. During 1994, a committee
task force conducted a survey of its members which indicated that mutual fund transfer agents
were very active in lost shareholder location efforts. The majority of survey respondents
actively employed search methodologies to locate a shareholder’s new address before coding an
account "abandoned." The task force then reviewed the lost shareholder location guidelines
developed by the STA, documented current practices of selected Transfer Agent Advisory
Committee members, and subsequently prepared the attached guidelines. The guidelines are
voluntary and closely follow those suggested by the STA.
Since its initial inquiry into transfer agent practices regarding lost shareholder location
efforts, the SEC has not proposed any rule changes regarding this issue. However, we
understand that this issue is still being reviewed by the Division of Market Regulation. We will
keep you informed of any further developments.
The abandoned property task force was chaired by Joan Dowd of Boston Financial Data
Services and the following individuals participated in the research and preparation of the
document:
Joan Dowd - Boston Financial Data Services, Chair
Mary Crooks - Oppenheimer
Charles Hawkins - PNC Financial Services Group
Joanna Johnson - MFS
David Kulakowski - Keystone Investments
Angela Mitchell - American Funds
Joe Pollaro - Prudential Mutual Fund Services
Melinda Schmidt - Federated
Steve Warner - Pioneer
We wish to extend our appreciation to the task force on behalf of the Transfer Agent
Advisory Committee for their time and effort in preparing this information. If you have any
questions regarding this document, please contact Justine Phoenix at 202/326-5850.
Cynthia Jones Justine Phoenix
Colonial Investors Service Center Director - Operations/
Chair - Transfer Agent Advisory Committee Transfer Agency
Attachment