Stock transfer agent
||The examples and perspective in this article may not represent a worldwide view of the subject. (December 2010)|
A stock transfer agent or share registry is a company, usually a third party unrelated to stock transactions, which cancels the name and certificate of the shareholder who sold the shares of stock, and substitutes the new owner's name on the official master shareholder listing. Stock transfer agent is the term used in the United States and Canada. Share registry is used in the United Kingdom, Australia and New Zealand. Transfer secretary is used in South Africa.
A public company usually only designates one company to transfer its stock. Stock transfer agents also run annual meetings as inspector of elections, proxy voting, and special meetings of shareholders. They are considered the official keeper of the corporate shareholder records.
The shares are issued in "street name" which is the term given to securities held in the name of a financial intermediary (such as brokerage, custodian bank, securities depositary, or a nominee of any of them) on behalf of a customer, usually done to facilitate subsequent transactions. Shares held in "Street name", usually Cede & Co., refers to shares which have a beneficial shareholder who maintain their ownership indirectly through a brokerage. Street name holders are not registered holders; they must exercise shareholder rights by obtaining proxies from the legal entity which is a holder of record.
Stock transfer agents verify that owners of stock are genuine through the use of signature guarantees. This is often referred to as a "Medallion Signature Guarantee" in the United States. A signature guarantee is a warranty by the signature guarantor that the endorser of a stock certificate or stock power form is an appropriate person to endorse and thus transfer the security. Signatures on a stock certificate or stock power must have the medallion guarantee. A medallion guarantee is also used to validate the genuineness of a securities transaction document (typically a stock certificate). It is backed by a bond and protects the issuer of the security and their transfer agent from fraudulently transferred securities. A medallion guarantee may be obtained from most major banks, brokerage firms or credit unions.