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Final Rule: Lost Securityholders and Unresponsive Payees

Final Rule: Lost Securityholders and Unresponsive Payees

RIN: 3235-AL11

Agency/Agencies: SEC

Federal Register Publication Date: 01/23/2013

Summary: The SEC adopted amendments to Rule 17Ad-17 to implement the requirements of Section 929W of the Dodd-Frank Wall Street Reform and Consumer Protection Act. That Section added to Section 17A of the Securities Exchange Act of 1934 (“Exchange Act”) subsection (g), “Due Diligence for the Delivery of Dividends, Interest, and Other Valuable Property Rights,” which directs the SEC to revise Exchange Act Rule 17Ad-17, “Transfer Agents’ Obligation to Search for Lost Securityholders” to: extend the requirements of Rule 17Ad-17 to search for lost securityholders from only recordkeeping transfer agents to brokers and dealers as well; add a requirement that “paying agents” notify “unresponsive payees” that a paying agent has sent a securityholder a check that has not yet been negotiated; and add certain other provisions. The SEC also adopted a proposed conforming amendment to Rule 17Ad- 7(i) and Rule 15b1-6, a technical rule to help ensure that brokers and dealers have notice of their new obligations with respect to lost securityholders and unresponsive payees.

Ianthe Zabel
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