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transfer agent
| a person, bank, or trust company officially designated to act for a corporation in executing and recording the transfers of its stock from one legal owner to another. |
Based on the Random House Dictionary, © Random House, Inc. 2009.
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Transfer Agent
A trust company, bank or similar financial institution assigned by a corporation to maintain records of investors and account balances and transactions, to cancel and issue certificates, to process investor mailings and to deal with any associated problems (i.e. lost or stolen certificates).
Investopedia Commentary
Because publicly-traded companies, mutual funds and similar entities often have many investors who own a small portion of the organization, require accurate records and have rights regarding information provision, the role of the transfer agent is an important one. Some corporations choose to act as their own transfer agents, but most choose a third-party financial institution to fill the role.
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See also: Agency Costs, Agent, Commercial Bank, Custodian, Custody-Only Trading, Mutual Fund, Shareholder Services Agent, Stock Certificate
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transfer agent
- A company, generally a bank or trust company, appointed by a firm to transfer that firm's securities. Security holders may send the security certificates directly to the transfer agents by registered mail. The security should be endorsed with a letter of instruction included. The firm's agent is listed on its certificates. The transfer agent is also likely to maintain the current record of security owners for transmitting dividends, reports, security distributions, and so forth.
Copyright © 2003. Published by Houghton Mifflin.
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