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Question

Difficulty: EasyBroker-Dealers, Investment Advisers, and Intermediaries

Which of the following entities is primarily responsible for maintaining a corporation's official shareholder records, issuing and canceling stock certificates, and processing dividend disbursements?

  1. Transfer AgentAnswer
  2. B
    Depository Trust Company (DTC)
  3. C
    Carrying Broker-Dealer
  4. D
    National Securities Clearing Corporation (NSCC)

Answer

Transfer Agent
The transfer agent is an intermediary hired by an issuing company to maintain records of who owns its stocks and bonds. Key duties include issuing and canceling certificates to reflect ownership changes, distributing dividends, and mailing proxy materials.

Step-by-Step Solution

1
Identify the primary responsibility described in the stem.
The tasks include keeping issuer shareholder records, canceling/issuing stock certificates, and distributing dividends.
These are administrative corporate actions performed on behalf of the issuing corporation.
2
Match the entity responsible for corporate registry functions.
The Transfer Agent is contracted by the issuer specifically for recordkeeping of certificate ownership and dividend processing.
Clearing entities (NSCC) and depositories (DTC) handle trade netting and central safekeeping, while broker-dealers manage customer accounts.

Key Concept

Role of Transfer Agents in Corporate Recordkeeping and Shareholder Servicing
Estimated Time:45s
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Topics

Broker-Dealers, Investment Advisers, and Intermediaries

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