What is Transfer Agents ?
Definition of Transfer Agents
A transfer agent is a financial institution or trust company or bank which keeps record of investors and his account balances for the sake of company. Transfer agents are generally assigned by organizations to maintain track of investor’s transactions, issues different certificates and assist them in different matters like losing of certificates etc.
Brief Explanation of Transfer Agents
Transfer Agent can be said as to be the intermediary of the company.
Following are the main duties performed by Transfer Agents:
- It keep records of who owns company stock , number of shares and bonds owned by each investor and their form.
- They act as pay distributors on behalf of company i.e. during the time of dividend or interest payments etc.
- Sends copy of Annual reports to shareholders.
- The provide information to investors during the voting time. Investors have right to influence and vote during the important decisions( i.e. merger) taken by the company. In such time transfer agents send proxy information to investors to cast their vote for or against.
- They serves when there is a need to transfer investment’s ownership.
- Transfer agents deal with shares, securities, bonds, mutual funds and preference shares etc.
- The also deal with situations like lost certificates, destroyed and re issuance of them.
- Now a days physical securities are not very common. Instead electronic ownerships are kept. Transfer agents also looks after this and issue, cancel or transfer ownerships accordingly in electronic system.
- The benefits of having transfer agent includes specialized and efficient services, smooth relationships with investors, up to date records, undisputed liability by the company i.e. dividends and interest all paid and cleared etc.