what is a transfer agent 
a transfer agent is a trust company bank or similar institution assigned by a corporation for the purposes of maintaining an investor s financial records and tracking each investor s account balance the transfer agent records transactions cancels and issues certificates processes investor mailings and handles a host of other investor problems including reissuing lost or stolen certificates 1transfer agents work closely with registrars to ensure investors receive their due interest and dividend payments in a timely manner transfer agents likewise oversee the mailing of monthly investment statements to mutual fund shareholders investopedia nez riazunderstanding transfer agenttraditionally when investors purchased a security they received a physical paper certificate today transfer agents issue certificates in book entry form an electronic method of recording securities ownership that saves vast amounts of time and money these book entry securities vary depending on the investment 2for example bonds are often issued in 1 000 multiples while stock and mutual fund holdings are issued as shares meanwhile unit investment trusts uit are sold in block units transfer agents process all types of securities in book entry form in whatever necessary shape they must take it s possible to identify which transfer agent a company uses by checking out the investor relations section of its website 1transfer agent responsibilitiescommon and preferred stock shareholders have the right to vote on major corporate decisions such as merger activities and the sale of companies these votes are facilitated through transfer agents who send proxy information to shareholders transfer agents likewise furnish shareholders with annual reports including companies audited financial statements and at year end transfer agents and registrars jointly send federal tax information to investors including dividends information and interest paid along with data on security trades executed during the year distribution of funds and sharestransfer agents pay distributions to investors based on the registrar s records for example transfer agents send interest payments to bondholders as well as the face value of their bonds once they reach maturity similarly transfer agents send cash dividend payments to stock investors once the companies they invest in generate sufficient earnings 1transfer agents also send stock shares to investors after a stock split if for example the company has a 3 for 1 stock split each shareholder receives two additional shares for every share they already own 1if investors hold securities in their own names and wish to transfer or sell those securities they may need to get their signatures guaranteed before the transfer agent will accept the transactions 3mutual fund transfer agentsmutual fund transfer agents differ from stock transfer agents in that the former never issue physical certificates whereas the latter must do so on shareholder request however mutual fund transfer agents perform many other important tasks like maintaining records of shareholders accounts overseeing dividend payments and responding to shareholder requests for account statements income tax forms and transaction confirmations 4benefits of transfer agentsall shareholders are entitled to accurate information about their investments while some corporations choose to act as their own transfer agents other companies decide to use third parties like trust companies banks or similar financial institutions these companies receive fees for their services these third party companies specialize in providing transfer agent services and many corporations find the expense of hiring a third party company well worth it transfer agents handle a detailed and challenging job especially for large corporations with many shareholders for example it s not uncommon for a publicly traded company to issue millions of shares of stock someone has to keep all of the information relevant to those millions of shares in order it s part of the company s fiduciary responsibility to its shareholders to ensure that all investor records account balances and transactions are safeguarded and accurately tracked transfer agents fulfill this vital role in maintaining records and providing investors with timely and reliable information 