Full text of Federal Reserve Bank of New York Circulars : 7741. Amendment to Regulation H

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FEDERAL RESERVE BANK
OF N E W YORK

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L

C ircular N o. 7 7 4
O ctober 28, 197S

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AMENDMENT TO REGULATION H
Registration of State Member Banks Acting as Transfer Agents

To A ll S tate M em ber B a n k s, and Others Concerned,
in the Second F e d e ral R eserve D istric t:

Following is the text of a statem ent issued October 22 by the Board of Governors of the
Federal Reserve System:
The Board of Governors of the Federal Reserve System today announced adoption of an amendment
to its Regulation H providing for registration of State member banks that act as transfer agents.
The action was taken pursuant to the Securities Acts Amendments of 1975. Other bank regulators and
the Securities and Exchange Commission are issuing similar rules for institutions under their jurisdiction.
Proposed rules were issued for comment by the Board August 28.
The new legislation is designed to foster a national system for prompt and accurate clearance and
settlement of securities transactions. The new law requires that after December 1, 1975, banks may not act as
transfer agents unless they are registered with their Federal supervisory agency in accordance with regula­
tions issued under the Act, such as the rule published today by the Federal Reserve for State member banks.
The SEC has general rulemaking and policy oversight under the new legislation, but banks acting as transfer
agents are regulated primarily by their Federal bank supervisor.
Attached is the Board’s amendment to Regulation H — Membership of State Banking Institutions in the
Federal Reserve System—and a uniform application form which is to be used for registration of all transfer
agents. U nder the statute, an application for registration becomes effective 30 days after receipt by the appro­
priate regulatory agency or within such shorter time as the agency may determine. In view of the short
time remaining to the December 1 statutory deadline for registration and the time required for circulating
the application form to all potential registrants, the Board announced that it will make effective, as of
December 1, 1975, properly completed registrations received by November 17, 1975.

In subm itting the amendment for publication in the Federal R egister, the Board of Governors
made the following additional statem ent:
By notice of proposed rulemaking published in the Federal Register on September 4, 1975 (40 Fed­
eral Register 40857), the Board of Governors proposed to amend its Regulation H, “ Membership of State
Banking Institutions in the Federal Reserve System,” (12 C FR 208) to require that, on or after December 1,
1975,1 no State member bank or any of its subsidiaries shall act as a transfer agent, as defined in section
3 (a ) (25) of the Act, with respect to any security registered under section 12 of the Act or which would
be required to be registered except for the exemption from registration provided by subsection ( g ) ( 2 ) ( B )
or ( g ) ( 2 ) ( G ) of that section, unless it has registered with the Board in conformity with the requirements of
Form TA -1.2
This amendment relating to State member banks is proposed to assist in the development of a modern
nationwide system for the safe and efficient handling of securities transactions in a manner which best serves
the financial community and the investing public. Congress has directed the Board to regulate certain transfer
agent activities to facilitate this purpose.
In light of comments received, the frequency and time for filing amendments has been relaxed. The rule
as adopted requires items 1-6 of Form TA-1 to be amended twenty-one calendar days following the date
on which such information becomes inaccurate, misleading or incomplete. Information as to the issues which
1 See §31 ( a ) of Pub. L 94-29 (Ju n e 4, 1975).
2 A copy of Form TA -1 is filed as part of the original document. Copies are available on request to the B oard of Governors
of the Federal R eserve System , W ashington, D .C. 20551, or to any Federal R eserve Bank.




(o v e r )

the bank services m ust be updated annually if such inform ation has become inaccurate,
incom plete.

m isleading

or

Form T A -1 as adopted has been revised and reorganized to clarify its requirements and sim plify the
registration process.
T h e Form is designed to identify and to provide the Board w ith basic inform ation regarding the size
and nature of the registrant’s transfer agent activities and to assist in the developm ent of appropriate regu­
latory standards.
T h e Form has been revised to elim inate the requirem ent that the registrant disclose the identity o f
entities w ho act as transfer agent, co-transfer agent, registrar or co-registrar for issues w ith respect to
w hich the registrant perform s transfer agent functions. A s revised, the Form requires the registrant to identify
the issues for w hich it performs transfer agent functions and the capacities in which it acts for each issue
and requires the registrant to update the inform ation annually.
T he inform ation requested on differences and o u t-of-p roof issues has been revised to clarify the inform a­
tion required.

Enclosed is a copy of the amendment, effective December 1, 1975, to Regulation H. Additional
copies will be furnished upon request.
In addition, a copy of the registration statem ent form, together with related instructions, as
finally adopted by the Board of Governors, is enclosed for State member banks. Additional copies
will be furnished upon request.




P aul

A.

V o lc k e r ,

President.

Board of Governors of the Federal Reserve System
MEMBERSHIP OF STATE BANKING INSTITUTIONS
IN THE FEDERAL RESERVE SYSTEM

A M E N D M E N T TO R E G U L A T IO N H
Effective December 1, 1975, §208.8 is
amended by adding a new paragraph (f)
thereto, to read as follows:
SE C T IO N 208.8— B A N K IN G P R A C T IC E S
*

*

*

(f) State m em ber banks as transfer agents.
(1)
On or after December 1, 1975, no State
member bank or any of its subsidiaries shall
act as transfer agent, as defined in Section
3 (a ) (25) of the Securities Exchange Act of
1934 ( “A ct” ) with respect to any security
registered under Section 12 of the Act or which
would be required to be registered except for
the exemption from registration provided by
subsection ( g ) ( 2 ) ( B ) or ( g ) ( 2 ) ( G ) of that
Section, unless it shall have filed a registration
statement with the Board in conformity with
the requirements of Form TA-1, which regis­
tration statement shall have become effective
as hereinafter provided. Any registration state­
ment filed by a State member bank or its sub­
sidiary shall become effective on the thirtieth
day after filing with the Board unless the Board
takes affirmative action to accelerate, deny or

postpone such registration in accordance with
the provisions of Section 17A (c) of the Act.
Such filings with the Board will constitute fil­
ings with the Securities and Exchange Com­
mission for purposes of Section 1 7 (c )(1 ) of
the Act.
(2) If the information contained in Items
1-6 of Form TA-1 becomes inaccurate, mis­
leading or incomplete for any reason, the bank
or its subsidiary shall, within twenty-one cal­
endar days thereafter file an amendment to
Form TA-1 correcting the inaccurate, mislead­
ing or incomplete information. W ithin thirty
calendar days following the close of any cal­
endar year (beginning with the period from the
date as of which the registration statement is
prepared to December 31, 1976) during which
the information required by Item 7 of Form
TA-1 becomes inaccurate, misleading or incom­
plete, the bank or its subsidiary shall file an
amendment to Form TA-1 correcting the in­
accurate, misleading or incomplete information.
(3) Each registration statement on Form
TA-1 or amendment thereto shall constitute a
“report” or “application” within the meaning
of Section 17, 17A (c), and 3 2(a) of the Act.

PRIN TED IN N EW YORK

[ E n c . C i r . N o . 7741]