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Registrar Operations of the Bank as Transfer Agent

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OPERATIONS OF THE BANK AS TRANSFER AGENT, REGISTRAR, FISCAL AGENT, TRUSTEE, AND SAVINGS INSTITUTION Functions of a Transfer Agent and Registrar Commercial banks in financial centers act as registrars for stocks and bonds and as transfer agents for stocks. Although the two functions can be conveniently performed by the same bank department, and although they are often confused in the popular mind, they are distinctive. The duties of transfer agent and of registrar for any corporation cannot be performed by the same individual, firm, or corporation. The stock exchanges in their constitutions or by-laws require that all active securities listed with them be registered with some duly appointed registrar who assumes the duty of preventing the overissue of the stocks or bonds and of keeping a record of the legal holders of those securities.

The stock exchanges also require that any corporation whose securities are listed with them maintain for the convenience of the traders a transfer agent in the cities where they are listed; and such agent assumes the duty of transferring the stocks of the corporation and giving clear titles to new certificates of stock issued in lieu of the old. It is obviously illogical for the same agent to act both as registrar and as transfer agent for any issue of securities, because the registrar's function is to act as a check upon the transfer agent against errors or irregularities. A cor poration may act as its own transfer agent, but it cannot act as its own registrar.

Incidental to these major duties are certain minor duties, such as handling subscriptions, issuing stock for new companies and increases of capital stock or bonds of corporations, exchang ing stocks for bonds or vice versa, preparing dividend and in terest lists and sometimes paying dividends and interest, keeping the seal of the corporation, etc. The transfer department acts also as transfer agent for the stocks of the bank itself.

A bank may act as transfer agent for certain corporations and as registrar for others; but ordinarily the work required in the two capacities is performed by one department, sometimes called the " transfer " department. The internal organization

of such a department varies, of course, with the bank and the volume of this kind of business, but the essential clerical duties are handled as follows: The department is administered by a transfer clerk, who is assisted by an assistant transfer clerk, who may also act as windowman. The windowman receives the securi ties over the counter, by registered mail, and from other depart ments of the bank, passes upon the certificates, watches the stop-transfer sheets, etc. Immediately under him is a clerk who prepares the transfer sheet of incoming and outgoing certificates, and a proof clerk who handles the proof book with entries taken from the stock ledgers. The register is handled by the register clerk; the stock ledgers and postings are cared for by the book keeper. In a large department are also several general utility clerks who are shifted about as necessity may require.

The Registration of Corporate Stocks The purpose of the registration of corporate stocks and bonds with an independent registrar is to see that no more than the authorized amount of these securities is issued, and in the con tract by which a corporation appoints its registrar it is specifically stated that the bank or other party is appointed to register the corporation's capital stock or bonds consisting of a specified num ber of shares with par value of such and such amount. The stock exchange then notifies the registrar-elect that it is authorized to register a certain number of shares of the subject corporation.

The use of registrars dates from the '6o's, when a certain railroad official manipulated the market, causing panic and ruin, by over issuing shares above the authorized capital stock. The practice is now so generally recognized by the exchanges, corporations, and purchasers that any securities not registered with a responsi ble registrar may well be regarded with suspicion.

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