[Federal Register Volume 64, Number 61 (Wednesday, March 31, 1999)]
[Proposed Rules]
[Pages 15310-15320]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 99-7840]


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SECURITIES AND EXCHANGE COMMISSION

17 CFR PARTS 240 and 249b

[Release No. 34-41204; File No. S7-11-99]
RIN 3235-AH44


Revised Transfer Agent Form and Related Rule

AGENCY: Securities and Exchange Commission.

ACTION: Proposed rule.

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SUMMARY: The Securities and Exchange Commission (Commission) is 
publishing for comment its proposal to amend Rule 17Ac2-2 and related 
Form TA-2 and its proposal to rescind Rule 17a-24 under the Securities 
Exchange Act of 1934. The amendment would make technical corrections 
and provide greater clarity to Form TA-2. Accordingly, the amendments 
are designed to clarify filing requirements and instructions; eliminate 
or change ambiguous terms and phrases; delete certain redundant or 
unnecessary questions; and add questions that would help the Commission 
to more effectively monitor the transfer agent industry.

DATES: Comments are due on or before May 17, 1999.

ADDRESSES: Comments should be submitted in triplicate to Jonathan G.

[[Page 15311]]

Katz, Secretary, Securities and Exchange Commission, 450 Fifth Street, 
N.W., Washington, D.C. 20549-0609. Comments also may be submitted 
electronically at the following E-mail address: [email protected]. 
All comment letters should refer to File No. S7-11-99; this file number 
should be included on the subject line if E-mail is used. All comments 
received will be available for public inspection and copying in the 
Commission's Public Reference Room, 450 5th Street, N.W., Washington, 
D.C. 20549. Electronically submitted comment letters will be posted on 
the Commission's Internet Web site (http://www.sec.gov).

FOR FURTHER INFORMATION CONTACT: Jerry W. Carpenter, Assistant 
Director, or Lori R. Bucci, Special Counsel, at 202/942-4187, Office of 
Risk Management and Control, Division of Market Regulation, Securities 
and Exchange Commission, Washington, D.C. 20549-1001.

Supplementary Information:

I. Introduction

    Transfer agents play an essential role in the processing of 
securities transactions and recordkeeping for securities issuers. The 
Commission is reviewing the regulations that apply to transfer agents 
to determine whether changes are necessary or appropriate. In this 
release, we propose a variety of amendments to Form TA-2,\1\ the annual 
reporting mechanism for all registered transfer agents.
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    \1\ 17 CFR 249b.102.
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    Form TA-2 has not been reviewed since it was adopted in 1986.\2\ 
Since that time, a variety of ambiguities and inconsistencies in the 
form have come to light. Also, we believe that the quality of the data 
obtained from transfer agents can be improved. It is essential that the 
Commission receive accurate information that can be processed and 
evaluated efficiently by our staff because there is no self-regulatory 
organization for transfer agents, resulting in more direct oversight 
responsibility for the Commission and the other appropriate regulatory 
agencies (ARAs).\3\ The amendments proposed today are intended to 
enhance our oversight capabilities.
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    \2\ Securities Exchange Act Release No. 23084 (March 27, 1986), 
51 FR 12124. Form TA-2 is referenced in 17 CFR 249b.102.
    \3\ The term ``appropriate regulatory agency'' is defined in 
Section 3(a)(34) of the Securities Exchange Act of 1934, 17 U.S.C. 
78c(a)(34), and includes the Commission, the Board of Governors of 
the Federal Reserve System, the Federal Deposit Insurance 
Corporation, and the Office of the Comptroller of the Currency.
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A. Rule 17Ac2-2 and Form TA-2

    In 1975, Congress enacted legislation for the regulation of the 
securities processing industry.\4\ The legislation requires transfer 
agents to register, and gives the ARAs the authority to develop 
registration requirements. Every transfer agent that is subject to 
registration must file a Form TA-1 with its ARA.\5\ Congress gave the 
Commission broad rulemaking and enforcement authority over all transfer 
agents \6\ although the bank regulatory agencies were given primary 
responsibility for oversight of bank transfer agents.\7\
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    \4\ Pub. L. 94-29 (June 4, 1975), known as the Securities Acts 
Amendments of 1975. The securities processing industry refers to 
both transfer agents and clearing agencies.
    \5\ Section 17A(c)(2) of the Exchange Act. Form TA-1 is 
referenced in 17 CFR 249b.100.
    \6\ Section 17A(d)(3) of the Exchange Act.
    \7\ Section 17A(d)(3)(A)(ii) of the Exchange Act.
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    In 1986, the Commission adopted Rule 17Ac2-2, which requires all 
registered transfer agents to file an annual report of their business 
activities on Form TA-2.\8\ As part of the Commission's continuing 
efforts to improve and simplify rules and forms, the Commission 
proposes to amend Rule 17Ac2-2 and Form TA-2. The proposed amendments 
would allow the Commission to obtain clearer and more comprehensive 
information from transfer agents about their activities. Essentially, 
the proposed amendments would:
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    \8\ Securities Exchange Act Release No. 23084 (March 27, 1986), 
51 FR 12124. Form TA-2 is referenced in 17 CFR 249b.102.
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     elicit additional information regarding transfer agent 
business activities, such as direct purchase and dividend reinvestment 
plan accounts, buy-ins, and turnaround time for routine items;
     request more useful lost securityholder information;
     enhance service company information;
     eliminate the filing exception;
     clarify the filing requirements and instructions;
     conform reporting periods;
     delete unnecessary questions; and
     make technical changes.

B. Lost Securityholders

    To address the problem of lost securityholders,\9\ on October 1, 
1997, the Commission adopted Rules 17Ad-17 and 17a-24.\10\ Rule 17Ad-17 
requires transfer agents to conduct data base searches in an effort to 
locate lost securityholders. Rule 17a-24 requires transfer agents to 
submit on Form TA-2 aggregate data regarding the accounts of lost 
securityholders.\11\ The purpose of Rule 17a-24 is to gather data to 
assess the effectiveness of the search requirements of Rule 17Ad-17. As 
a result of its continuing review of this problem, the Commission now 
believes that it needs different information than that which is 
required by Rule 17a-24 to assess the effectiveness of the search 
requirements of Rule 17Ad-17. Therefore, the Commission is proposing to 
require transfer agents to report on Form TA-2 specific information 
about the results of the required data base searches for lost 
securityholders and to rescind Rule 17a-24.
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    \9\ Rule 17Ad-17 generally defines a ``lost securityholder'' as 
a securityholder to whom an item of correspondence that was sent to 
the securityholder at the address in the transfer agent's master 
securityholder file has been returned as undeliverable. Securities 
Exchange Act Release No. 39176 (October 1, 1997), 62 FR 52229. 
``Master securityholder file'' is defined in Rule 17Ad-9(b) as the 
official list of individual securityholder accounts.
    \10\ Securities Exchange Act Release No. 39176 (October 1, 
1997), 62 FR 52229. The Commission also adopted amendments to Rule 
17Ad-7 incorporating the retention time periods for the records 
relating to compliance with Rule 17Ad-17.
    \11\ Rule 17a-24 requires registered transfer agents to report 
the number of lost securityholder accounts as of June 30 of each 
year and the percentage of total accounts represented by such lost 
securityholder accounts. These figures are broken down by the length 
of time the securityholder was classified as lost: one year or less; 
three years or less; five years or less; or more than five years. 
Rule 17a-24 also requires that transfer agents annually report 
information on lost securityholder accounts that escheated to state 
unclaimed property administrators.
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II. Proposed Changes

A. Rule 17Ac2-2

    Rule 17Ac2-2 requires every transfer agent to file Form TA-2 with 
the Commission by August 31 of each calendar year. The information 
furnished on Form TA-2 assists the Commission in its transfer agent 
oversight programs.
    The Commission is proposing several modifications to Rule 17Ac2-2. 
First, to clarify whether a transfer agent must file Form TA-2 if it 
withdraws its registration during the filing period, Rule 17Ac2-2 would 
be amended to require every transfer agent that is registered on June 
30 to file Form TA-2 by August 31 of that calendar year.
    Second, current Rule 17Ac2-2 provides that a registered transfer 
agent is required to complete only Items 1 through 4 of Form TA-2 if 
it: received fewer than 500 items for transfer and fewer than 500 items 
for processing in the six months ending June 30, and did not maintain 
master securityholder files for more than 1,000 individual 
securityholder accounts as of June 30. The proposed amendment would 
revise

[[Page 15312]]

this partial exception to the full filing requirement so that it 
applies to a registered transfer agent that received fewer than 1,000 
items for transfer and fewer than 1,000 items for processing in the 
twelve months ending June 30 of the year for which the form is being 
filed.\12\ Moving from a six month to a twelve month period would 
conform this exception to the rule's twelve month reporting period and 
would provide more complete records regarding the volume of items 
transferred and processed during the entire reporting period.
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    \12\ The master securityholder account element would not change. 
A transfer agent with this level of activity would be required to 
complet only Questions 1 through 5, 10, and 11 and the signature 
section of Form TA-2.
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    Third, Rule 17Ac2-2 currently requires the annual filing of Form 
TA-2 by all registered transfer agents except named transfer agents 
\13\ that engage a service company \14\ to perform all of their 
transfer and processing functions.\15\ As a consequence, in processing 
Form TA-2 filings, the Commission's staff frequently cannot determine 
whether a transfer agent that did not file Form TA-2 is properly using 
the exception or has simply neglected to file. To address this problem, 
the proposed rule amendment would eliminate the exception.
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    \13\ ``Named transfer agent'' is defined in Rule 17Ad-9(j) as 
the registered transfer agent that is engaged by an issuer to 
perform transfer agent functions for an issue of securities but has 
engaged a service company to perform some or all of those functions. 
17 CFR 240.17Ad-9(j).
    \14\ ``Service company'' is defined in Rule 17Ad-9(k) as the 
registered transfer agent engaged by a named transfer agent to 
perform transfer agent functions for that named transfer agent. 17 
CFR 240.17Ad-9(k).
    \15\ 17 CFR 240.17Ac2-2.
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    A named transfer agent that engages a service company to perform 
all of its transfer and processing functions would be required to 
complete only the first four questions and the signature section of 
Form TA-2.\16\ Currently, Rule 17Ac2-2 requires a named transfer agent 
that engages a service company to perform some but not all of its 
transfer and processing functions to file a Form TA-2 and to enter zero 
(0) for those questions that relate to functions performed by the 
service company on behalf of the named transfer agent. This requirement 
would not be changed by the proposed amendments. Therefore, as a result 
of the proposed amendments every registered transfer agent would be 
required to file a Form TA-2 annually.
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    \16\ These questions on Form TA-2 would request basic 
information such as the transfer agent's name, its use of a service 
company, the name of its ARA, whether it filed any amendments to its 
registration, and the number of items it received for transfer and 
processing during the reporting period.
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B. Form TA-2

    Current Form TA-2 contains questions regarding the volume and 
nature of a transfer agent's business activities. The Commission 
proposes to amend Form TA-2 to obtain more complete information 
regarding service companies, the transfer agent's amendments to its 
Form TA-1, direct purchase and dividend reinvestment plan accounts, 
buy-ins,\17\ lost securityholders, and turnaround time for routine 
items. The proposal also includes numerous technical and conforming 
changes.
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    \17\ Rule 17Ad-11(c)(2) generally requires that within ten 
business days following the end of each calendar quarter, every 
recordkeeping transfer agent shall report certain information when 
the aggregate market value of all buy-ins executed pursuant to Rule 
240.17Ad-10(g) during that calendar quarter exceeds $100,000. 17 CFR 
240.17Ad-11(c)(2).
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1. Form TA-2 Instructions
    Currently, the box at the top left corner of the first page 
requests the month, day, and year of the filing period. This format 
enables registrants to put in a date other than the required reporting 
period. The box at the top left corner of every page of Form TA-2 would 
be changed to ``For the reporting period ending June 30, YYYY.'' This 
change would help ensure that the correct reporting period for which 
Form TA-2 is being submitted is indicated.
    For clarity and to ease filling out Form TA-2, the proposed form 
would add definitions for the following terms to the form's 
instructions: aged record difference, lost securityholder, named 
transfer agent, outside registrar, record difference, reporting period, 
and service company. These definitions are the same definitions 
currently set forth in the existing transfer agent rules. In addition, 
the proposal would revise the filing requirements to conform with the 
amendments to Rule 17Ac2-2 discussed above.
    Currently, in determining the number of investment company 
securities for which they act as transfer agents, registrants are 
instructed to count each prospectus as one issue. The Commission 
believes that it is more informative to count investment company 
securities by CUSIP numbers rather than by prospectuses. Therefore, 
registrants would be instructed to count investment company securities 
as one issue per CUSIP number.
2. Form TA-2 Questions
    Revised Form TA-2 would contain a question asking if the registrant 
has amended Form TA-1 as required by existing transfer agent rules.\18\ 
In addition, the revised Form TA-2 would request that the transfer 
agent provide an explanation if it failed to file a required amendment 
to its Form TA-1. Form TA-2 also would contain a new question asking 
about the registrant's use of service companies. This information would 
help the Commission to obtain more complete information about transfer 
agents and their business activities.
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    \18\ Transfer agents registered with the Commission are required 
by Rule 17Ac2-1(c) to amend Form TA-1 or the SEC Supplements to Form 
TA-1 within 60 calendar days following the date on which information 
reported therein became inaccurate, incomplete, or misleading. 17 
CFR 240.17Ac2-1(c). Federal bank regulators (FBRs) also require 
their registrants to amend their Form TA-1 within 60 calendar days 
following the date on which the reported information became 
inaccurate, incomplete, or misleading. FBRs send copies of the 
submitted filings to the Commission on behalf of their registrants.
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    Throughout the form, the request for numbers with ``000s omitted'' 
or ``in millions--000,000s omitted'' would be deleted to prevent 
confusion and to ease the staff's analysis. The amended Form TA-2 would 
request the actual figures with no zeros omitted.
    Currently, Form TA-2 requests transfer agents to report the number 
of items received for transfer and processing during the six months 
ending June 30. The proposal would amend this reporting period from six 
months to twelve months ending June 30 in order to have a uniform 
annual reporting period.
    Currently, Form TA-2 elicits information regarding only the number 
of issues for which dividend reinvestment plan services are provided. 
However, the number of transfer agents providing direct purchase and 
dividend reinvestment plan services and the number of direct purchase 
and dividend reinvestment plan accounts have increased substantially in 
recent years. Revised Form TA-2 would require that transfer agents 
reflect direct purchase and dividend reinvestment plan accounts in the 
total number of individual securityholder accounts maintained, and 
separately state the number of individual securityholder direct 
purchase and dividend reinvestment plan accounts.
    Currently, Form TA-2 requests the percentage of individual 
securityholder accounts maintained in six categories: corporate equity 
securities, corporate debt securities, investment company securities, 
limited partnership securities, municipal debt securities, and other 
securities. Revised Form TA-2 would clarify the question by

[[Page 15313]]

renaming one of the six categories. The category of investment company 
securities would be renamed as open-end investment company securities. 
In addition, for purposes of clarification, the Form TA-2 instructions 
would be amended to state that the corporate equity category would 
include closed-end investment company securities.
    Currently, Form TA-2 requires the transfer agent to determine the 
number and type of securities issues for which it acted in various 
transfer agent capacities.\19\ Form TA-2 directs the transfer agent to 
combine corporate debt and equity into one category. In order that the 
Commission have more precise information on a transfer agent's 
operations, revised Form TA-2 would require the transfer agent to 
report separately the number of corporate equity and corporate debt 
securities issues for which it acted in a specified capacity.\20\
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    \19\ The identified capacities are: (a) receives items for 
transfer and maintains the master securityholder files; (b) receives 
items for transfer but does not maintain the master securityholder 
files; and (c) does not receive items for transfer but maintains the 
master securityholder files.
    \20\ The registrant would continue to report the number and type 
of other securities issues for which it acts in the specified 
transfer agent capacities.
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    Where a change in transfer agents for an issuer has occurred, 
current Form TA-2 requests information about the number and aggregate 
market value of (1) securities record differences \21\ that the current 
transfer agent received as an out of balance issue from the prior 
transfer agent, and (2) securities record differences resulting from 
the current transfer agent. The format of this section has been 
confusing to many registrants. Therefore, because the Commission 
believes that the current record difference information is the most 
significant, the form would be revised to require reporting of the 
current number and aggregate market value of securities differences 
with no detail as to whether the securities differences occurred before 
or after the change in transfer agents.
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    \21\ ``Record difference,'' as defined in Rule 17Ad-9(g), occurs 
when either (1) the total number of shares or total principal dollar 
amount of securities in the master securityholder file does not 
equal the number of shares or principal dollar amount in the control 
book, or (2) the security transferred or redeemed contains 
certificate detail different from the certificate detail currently 
on the master securityholder file, which difference cannot be 
immediately resolved.
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    Revised Form TA-2 would add a question about the number of 
quarterly reports that were filed and that should have been filed by 
the registrant with its ARA during the reporting period pursuant to 
Rule 127Ad-11(c)(2).\22\ The addition of this question to Form TA-2 
should help the Commission monitor registered transfer agent over-
issuance and buy-in activities.
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    \22\ 17 CFR 240.17Ad-11(c)(2). Generally, Rule 17Ad-11(c)(2) 
requires a transfer agent to file a report at the end of each 
quarter during which it has an aged record difference (i.e., where 
the number of shares on the securityholder file does not equal the 
number of shares authorized and issued by the issuer). The report 
contains information such as the size and dollar value of the record 
difference, the reason for the record difference, and the size and 
dollar value of any buy-ins executed to remedy the record 
difference. (A buy-in is required when a registered transfer agent 
overissues shares. The registered transfer agent within 60 days of 
the discovery of such overissuance buys-in securities equal to the 
number of shares in the case of equity securities or equal to the 
principal dollar amount in the case of debt securities. 17 CFR 
240.17Ad-10(g).)
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    The proposal would eliminate the collection of information about 
transfer agent custodian (TAC) arrangements.\23\ The current question 
tends to glean erroneous responses from many transfer agents while 
accurate information is readily obtainable from The Depository Trust 
Company.
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    \23\ TAC agreements, which are more commonly referred to as fast 
automated securities transfer (FAST) accounts, exist between large 
transfer agents and The Depository Trust Company.
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    As discussed above, the Commission proposes to use a uniform 
reporting period in Form TA-2. Accordingly, information relating to a 
transfer agent's dividend disbursement and interest paying agent 
activities, and information relating to the volume of openend 
investment company securities purchases and redemptions a transfer 
agent processes would be reported for the twelve months ending June 30 
instead of for the preceding calendar year ending December 31.\24\
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    \24\ Revised Form TA-2 would use the more commonly used industry 
term ``purchases and redemptions'' instead of ``transactions'' when 
referring to open-end investment company securities processing.
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    Current Form TA-2 requests both the number of transactions 
processed on a date other than the date of receipt of the order and the 
``number of transactions processed on other than on date of receipt of 
order, expressed as a percentage of total transactions processed.'' 
Because the Commission can compute the percentage based on other data 
in the form, the percentage inquiry would be eliminated.
    Finally, the proposal would add a question regarding turnaround 
time. Revised Form TA-2 would ask transfer agents to report the number 
of months during the reporting period in which the registrant was not 
in compliance with the specified turnaround time for routine items 
pursuant to Rule 17Ad-2.\25\ Revised Form TA-2 also would ask transfer 
agents to report the number of written notices the transfer agent filed 
and should have filed during the reporting period documenting its 
noncompliance with turnaround time for routine items pursuant to Rule 
17Ad-2.
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    \25\ Turnaround times for routine items are set forth in Rule 
17Ad-2. 17 CFR 240.17Ad-2.
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C. Rule 17a-24

    Rule 17a-24 requires registered transfer agents to report the 
aggregate number of lost securityholder accounts as of June 30 of each 
year and the percentage of total accounts represented by such lost 
securityholder accounts. These figures currently must be reported for 
lost securityholder accounts outstanding for: one year or less, three 
years or less, five years or less, or more than five years. As noted in 
the adopting release, the Commission adopted Rule 17a-24 to require the 
reporting of information on aged lost securityholder accounts in order 
to assess the effectiveness of search techniques employed by transfer 
agents. Rule 17a-24 also requires information on lost securityholder 
accounts that escheated to state unclaimed property administrators.
    In 1998, transfer agents were required to report information on the 
aging of lost securityholder accounts for the first time on Form TA-2. 
Transfer agent representatives, however, have informed Commission staff 
that compiling information on the aging of lost securityholder accounts 
has proved to be extremely difficult. Many transfer agents have 
indicated that their record systems are not designed to produce such 
information and that to program their systems to provide such 
information would be extremely burdensome and in some situations not 
possible.\26\
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    \26\ Because of these conversations, the Commission believes 
that at this time transfer agents have not made or undertaken any 
major systems changes.
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    The Commission has reviewed the information required by Rule 17a-
24. The Commission believes that the Commission should refine transfer 
agents' reporting requirements so that the information transfer agents 
are required to file would give a better indication of the 
effectiveness of the data base searches. The new reporting requirements 
should also be less burdensome for transfer agents to implement. 
Therefore, the Commission is proposing that: (1) transfer agents be 
required to report on Form TA-2 the number of lost securityholders for 
which a first and for which a second

[[Page 15314]]

data base search has been conducted and for which a correct address has 
been obtained as a result of these searches; (2) transfer agents 
continue, as required by Rule 17a-24, to report on Form TA-2 the 
current number of lost securityholder accounts and the number of lost 
securityholder accounts that were remitted to the states during the 
last year; (3) the remaining information (i.e., aging of lost 
securityholder accounts) will no longer be required; and (4) Rule 17a-
24 then be rescinded.

III. General Request for Comments

    The Commission solicits commenters' views on all aspects of the 
proposed amendments to Rule 17Ac2-2 and Form TA-2 and the proposed 
rescission of Rule 17a-24 under the Securities Exchange Act of 1934 
(Exchange Act). In particular, the Commission requests comment as to 
whether the proposed amendments would provide the most effective means 
for the Commission to obtain adequate information regarding transfer 
agent operations. Are there other questions that the Commission could 
ask on Form TA-2 to obtain useful information on transfer agent 
operations? Is there other specific information regarding transfer 
agent operations that the Commission should require to be provided on 
Form TA-2?
    In addition, the Commission requests comments on whether the 
proposed change to the information on lost securityholders collected on 
Form TA-2 would be a more effective method to track the effectiveness 
of transfer agents' data base searches than the account aging 
information currently required. Do transfer agents currently have the 
aging information readily available to report? Is the proposed change a 
more efficient and less costly method for transfer agents to report 
information on their outstanding lost securityholder accounts? What 
system changes and costs would transfer agents incur if they were only 
required to report the aging of lost securityholder accounts 
prospectively? (For example, it would only be five years from now that 
a transfer agent would be required to report the number of 
securityholder accounts that had been lost for five years.)
    Finally, the Commission refers commenters to its policy statement 
establishing a regulatory moratorium to facilitate the year 2000 
conversion.\27\ The Commission anticipates that any amendments to Rule 
17Ac2-2 and Form TA-2 would be adopted before the moratorium begins on 
June 1, 1999. However, the Commission requests comment on the specific 
extent to which the proposed amendments would require registered 
transfer agents to make major programming changes to their computer 
systems.
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    \27\ Securities Exchange Commission Release Nos. 33-7568, 34-
40377, 35-26912, IA-1749, and IC-23416 (August 27, 1998), 63 FR 
47051. The policy is available at the Commission's website 
(www.sec.gov).
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IV. Costs and Benefits of the Proposed Amendments and Their Effects 
on Competition

    The Commission has identified certain costs and benefits relating 
to the proposals, which are discussed below, and encourages commenters 
to discuss any additional costs or benefits. In particular, the 
Commission requests comment on the potential costs for any necessary 
modifications to information gathering, management, and recordkeeping 
systems or procedures as well as any potential benefits resulting from 
the proposals for issuers, transfer agents, regulators, or others. 
Commenters should provide analysis and empirical data to support their 
views on the costs and benefits associated with the proposals.

A. Benefits

    These amendments would help the Commission to:
     Keep complete records on all registered transfer agents. 
Currently, the Commission's staff cannot easily determine whether a 
transfer agent who did not file a Form TA-2 is properly using an 
applicable exception or whether the transfer agent has simply neglected 
to file.
     Use the information gathered from Form TA-2 to monitor the 
annual business activities of registered transfer agents, including the 
use of service companies, amendments to Form TA-1, direct purchase and 
dividend reinvestment plan accounts, buy-ins, and turnaround time for 
routine items.
     Achieve a consistent reporting period which should 
eliminate confusion from varying reporting periods. In addition, as the 
volume of transfer business may not be consistent throughout the entire 
reporting period, the current reporting requirement of only six months 
of data is potentially skewed.
     Elicit information regarding the data base searches for 
lost securityholders. This information should enable the Commission to 
assess the effectiveness of the search requirements of Rule 17Ad-17 and 
the scope of the lost securityholder problem.

B. Costs

    The proposed amendments to Rule 17Ac2-2 and Form TA-2 should not 
result in any significant additional costs to transfer agents. The 
majority of information required by Form TA-2 is available in the 
internal files of the transfer agents, and a large portion of the 
information is already required by the Commission to be calculated or 
maintained.
    The primary cost associated with the proposal is the time that it 
will take transfer agent personnel to complete the form and file it 
with the Commission. The amount of time needed to comply with the 
requirements of amended Rule 17Ac2-2 and Form TA-2 would vary. There 
are approximately 1,210 registered transfer agents. Of this number, 
approximately 300 registrants would be required to complete only 
Questions 1 through 4 and the signature section of amended Form TA-2. 
Based on their low volume of transfer business and number of 
shareholder accounts, approximately 410 registrants would be required 
to answer only Questions 1 through 5, 10, and 11 and the signature 
section. The remaining registrants, approximately 500, would be 
required to complete the entire Form TA-2.
    Additionally, there may be some incremental cost associated with 
modifying computer systems to report all items for the twelve months 
ending June 30. This likely would require a simple, one-time change to 
database reporting functions and should have a negligible cost on 
transfer agents. The Commission seeks comment on this assumption and 
specifically requests empirical data on the cost of modifying systems 
to report all items for the twelve months ending June 30.

C. Effects on Efficiency, Competition, and Capital Formation

    Section 23(a)(2) of the Exchange Act precludes the Commission in 
amending rules under the Exchange Act from adopting any such rule or 
regulation that would impose a burden on competition not necessary or 
appropriate in furtherance of the purposes of the Exchange Act.\28\ The 
Commission is considering the proposed amendments to Rule 17Ac2-2 and 
Form TA-2 in light of the standards cited in Section 23(a)(2). The 
Commission is proposing these amendments to enhance the Commission's 
ability to monitor more effectively the transfer agent industry. The 
amendments are also intended to make the Form TA-2 more efficient for

[[Page 15315]]

both the Commission and transfer agents. Because transfer agents of a 
similar size and with similar business are required to complete the 
form in the same manner, there should be no negative impact on 
competition. The Commission solicits commenters' views regarding the 
effects of the proposed amendments to Rule 17Ac2-2 and Form TA-2 on 
competition, efficiency, and capital formation. For purposes of the 
Small Business Regulatory Enforcement Fairness Act of 1996, we also 
seek comments on the proposed rule's potential impact (including any 
empirical data) on the economy on an annual basis, any increase in 
costs or prices for consumers, and any effect on competition, 
investment or innovation.
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    \28\ 15 U.S.C. 78w(a)(2).
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V. Summary of Initial Regulatory Flexibility Analysis

    The Commission has prepared an Initial Regulatory
    Flexibility Analysis (IRFA), in accordance with the provisions of 
the Regulatory Flexibility Act,\29\ regarding the proposed amendments 
to Rule 17Ac2-2 and Form TA-2 and the proposed rescission of Rule 17a-
24 under the Exchange Act. As discussed more fully in the analysis, 
some of the transfer agents that the proposed amendments would affect 
are small entities, as defined by the Commission's rules.
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    \29\ 5 U.S.C. 603.
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    The IRFA states the purpose of the proposal is to allow the 
Commission to obtain more comprehensive information from transfer 
agents about their activities while making Form TA-2 clearer and easier 
for transfer agents to complete. The proposed amendments would: elicit 
information regarding transfer agent business activities, such as 
direct purchase and dividend reinvestment plan accounts, buy-ins, and 
turnaround time for routine items; obtain more comprehensive lost 
securityholder information; enhance service company information; 
eliminate the filing exemption; clarify the filing requirements and 
instructions; conform reporting periods; delete unnecessary questions; 
and make technical changes.
    The IRFA sets forth the statutory authority for the proposed 
amendments to Rule 17Ac2-2 and Form TA-2 and for the rescission of Rule 
17a-24. The IRFA also discusses the effect of the proposal on transfer 
agents that are small entities pursuant to Rule 0-10(h) under the 
Exchange Act.\30\ Rule 0-10(h) defines the term ``small business'' or 
``small organization'' to include any transfer agent that: (1) received 
less than 500 items for transfer and less than 500 items for processing 
during the preceding six months (or in the time that it has been in 
business, if shorter); (2) maintained master shareholder files that in 
the aggregate contained less than 1,000 shareholder accounts or was the 
named transfer agent for less than 1,000 shareholder accounts at all 
times during the preceding fiscal year (or in the time that it has been 
in business, if shorter); (3) only transferred items of issuers with 
total assets of $5 million or less; and (4) is not affiliated with any 
person (other than a natural person) that is not a small business or 
small organization under Rule 0-10.
---------------------------------------------------------------------------

    \30\ 17 CFR 240.0-10(h). The Commission recently amended this 
definition. Securities Exchange Commission Release Nos. 33-7548, 34-
40122, IC-23272, and IA-1727 (June 24, 1998), 63 FR 35508.
---------------------------------------------------------------------------

    When the Commission adopted the new definition of ``small entity'' 
with respect to transfer agents, the Commission estimated that 
approximately 180 registered transfer agents would qualify as small 
entities under Rule 0-10. As a result, the Commission estimates that 
180 small entities would be subject to the requirements of the proposed 
amendments to Rule 17Ac2-2 and Form TA-2.
    The proposed amendments to Rule 17Ac2-2 would provide that a 
registered transfer agent that received fewer than 1,000 items for 
transfer and fewer than 1,000 items for processing in the twelve months 
ending June 30, and did not maintain master securityholder files for 
more than 1,000 individual securityholder accounts as of June 30, would 
have to complete only a portion of Form TA-2. All ``small entities'' as 
defined by Rule 0-10 would continue to have reduced reporting 
requirements under the proposal.
    The IRFA states that the proposal would impose new reporting and 
compliance requirements on certain transfer agents because it would 
eliminate the filing exception for named transfer agents using service 
companies and would require every registered transfer agent to file 
Form TA-2 annually. In addition, questions regarding the use of service 
companies, amendments to its Form TA-1, direct purchase and dividend 
reinvestment plan accounts, buy-ins, lost securityholders, and 
turnaround time for routine items would be added to Form TA-2. The IRFA 
states that the incremental annual burden on all ``small entities'' 
would be approximately 81 hours and $2,552. The IRFA also states that 
the proposed amendments to Rule 17Ac2-2 and Form TA-2 would not impose 
any other reporting, recordkeeping, or compliance requirements, and 
that the Commission believes that there are no rules that duplicate, 
overlap, or conflict with the proposed amendments.
    The IRFA discusses the various alternatives considered by the 
Commission in connection with the proposed amendments to Rule 17Ac2-2 
and Form TA-2 that might minimize the effect on small entities, 
including: (a) the establishment of differing compliance or reporting 
requirements or timetables that take into account the resources of 
small entities; (b) the clarification, consolidation, or simplification 
of compliance and reporting requirements under the proposed amendments 
for small entities; (c) the use of performance rather than design 
standards; and (d) an exemption from coverage of the rule or any part 
thereof for small entities.
    Taking into account the burden that would be imposed on small 
transfer agents, the Commission is proposing that transfer agents that 
meet the definition of a ``small entity'' still be required to respond 
to only a portion of Form TA-2. Therefore, small entities would be 
subject to a minimal amount of compliance cost under the proposal. 
Accordingly, the Commission has determined that it is not feasible to 
further clarify, consolidate, or simplify the proposed amendments for 
``small entities.'' The Commission also believes that it would be 
inconsistent with the purpose of the Exchange Act to exempt ``small 
entities'' from the proposed amendments or to use performance standards 
to specify different requirements for small entities.
    The Commission encourages the submission of written comments with 
respect to any aspect of the IRFA. Comments should specify costs of 
compliance with the proposed amendments to Rule 17Ac2-2 and Form TA-2, 
suggest alternatives that would accomplish the objective of proposed 
amendments, or indicate how many small entities, if any, would be 
subject to the rule change. A copy of the IRFA may be obtained by 
contacting Lori R. Bucci, Office of Risk Management and Control, 
Division of Market Regulation, Securities and Exchange Commission, 450 
Fifth Street, N.W., Washington, D.C. 20549-1001.

VI. Paperwork Reduction Act

    Certain provisions of the proposed amendments to Rule 17Ac2-2 and 
Form TA-2 contain ``collection of information'' requirements within the 
meaning of the Paperwork Reduction Act of 1995,\31\ and the Commission 
has submitted them to the Office of

[[Page 15316]]

Management and Budget for review in accordance with 44 U.S.C. 3507(d) 
and 5 CFR 1320.11. The Commission notes that it proposes to rescind 
Rule 17a-24. However, the Commission proposes to keep two questions 
generated by Rule 17a-24 on Form TA-2 and to add a question to Form TA-
2 about the results of the required data base searches for lost 
securityholders. The title for the collection of information is: 
``Transfer Agents Annual Report 17 CFR 240.17Ac2-2, Form TA-2.'' The 
OMB control number for the collection of information is 3235-0337.
---------------------------------------------------------------------------

    \31\ 44 U.S.C. 3501 et seq.
---------------------------------------------------------------------------

    Under the proposed amendments, Rule 17Ac2-2 would require the 
collection of additional information on amended Form TA-2. First, the 
proposal would eliminate the filing exception for named transfer agents 
and would require every named transfer agent using a service company 
for all of its transfer and processing functions to complete only the 
first four questions and the signature section of Form TA-2, which 
request only simple information. Second, registered transfer agents 
that meet the criteria based on volume of transfer business and number 
of shareholder accounts would be required to Questions 1 through 5, 10, 
11, and the signature section of Form TA-2. Finally, registered 
transfer agents that file a complete Form TA-2 would be required to 
respond to new questions regarding the use of service companies, 
amendments to Form TA-1, direct purchase and dividend reinvestment plan 
accounts, buy-ins, lost securityholders, and turnaround time for 
routine items.
    The Commission uses the information on Form TA-2 to monitor the 
annual business activities of registered transfer agents. The proposed 
collection of information under amended Rule 17Ac2-2 and Form TA-2 is 
intended to facilitate greater accuracy of transfer agents' records. 
Furthermore, the information elicited from the additional question 
regarding lost securityholders should help the Commission to assess the 
effectiveness of the search requirements of Rule 17Ad-17 and the scope 
of the lost securityholder problem.
    The collection of information required by the proposed amendments 
to Rule 17Ac2-2 and Form TA-2 should not result in any new significant 
burden to transfer agents. All information required by Form TA-2 is 
available in the internal files of the transfer agents and a large 
portion of the information is already required by existing Commission 
transfer agent rules to be calculated or maintained.
    The amount of time needed to comply with the requirements of 
amended Rule 17Ac2-2 and Form TA-2 would vary. There are approximately 
1,210 registered transfer agents. From this total number, approximately 
300 registrants would be required to complete only Questions 1 through 
4 and the signature section of amended Form TA-2, which the Commission 
estimates would take each registrant about 30 minutes, for a total of 
150 hours (300  x  .5 hours). Approximately 410 registrants would be 
required to answer Questions 1 through 5, 10, and 11 and the signature 
section, which the Commission estimates would take about 1 hour and 30 
minutes, for a total of 615 hours (410  x  1.5 hours). The remaining 
registrants, approximately 500, would be required to complete the 
entire Form TA-2, which the Commission estimates would take about 6 
hours, for a total of 3000 hours (500  x  6 hours). The Commission 
estimates that the total burden would be 3,765 hours (150 + 615 + 
3000).\32\
---------------------------------------------------------------------------

    \32\ Based on an estimated average administrative labor cost of 
$31.50 per hour, the Commission's staff estimates that the total 
labor cost to the transfer agent industry for complying with Rule 
17Ac2-2 and Form TA-2 would be $118,597.50 annually ($31.50  x  
3,765).
---------------------------------------------------------------------------

    The collection of information pursuant to the proposed amendments 
to Form TA-2 and Rule 17Ac2-2 does not contain any new recordkeeping 
requirements. Providing the information will be mandatory. Responses to 
the collection of information will not be kept confidential. An agency 
may not conduct or sponsor, and a person is not required to respond to, 
a collection of information unless it displays a currently valid Office 
of Management and Budget control number.
    Pursuant to 44 U.S.C. 3506(c)(2)(B), the Commission solicits 
comments to:
    (i) evaluate whether the proposed collection of information is 
necessary for the proper performance of the functions of the agency, 
including whether the information shall have practical utility;
    (ii) evaluate the accuracy of the Commission's estimate of the 
burden of the proposed collection of information;
    (iii) enhance the quality, utility, and clarity of the information 
to be collected; and
    (iv) minimize the burden of collection of information on those who 
are to respond, including through the use of automated collection 
techniques or other forms for information technology.
    Persons desiring to submit comments on the collection of 
information requirements should direct them to the following persons: 
Desk Officer for the Securities and Exchange Commission, Office of 
Information and Regulatory Affairs, Office of Management and Budget, 
Room 10202, New Executive Office Building, Washington, D.C. 20503; and 
Jonathan G. Katz, Secretary, Securities and Exchange Commission, 450 
Fifth Street, N.W., Washington, D.C. 20549-0609, and refer to File No. 
S7-11-99. The Office of Management and Budget (OMB) is required to make 
a decision concerning the collection of information between 30 and 60 
days after publication of this release in the Federal Register, so a 
comment to OMB is best assured of having its full effect if OMB 
receives it within 30 days of this publication.

VII. Statutory Basis

    Pursuant to the Exchange Act and particularly Sections 17, 17A, and 
23(a) thereof, 15 U.S.C. 78q, 78q-1, and 78w(a), the Commission 
proposes to amend Sec. 240.17Ac2-2 and Form TA-2 (referenced in 17 CFR 
249b.102) of Chapter II of Title 17 of the Code of Federal Regulations 
in the manner set forth below.

List of Subjects in 17 CFR Parts in 240 and 249b

    Reporting and recordkeeping requirements, Securities.

Text of Amendment

    For the reasons set forth in the preamble, the Commission proposes 
to amend Chapter II of Title 17 of the Code of Federal Regulations as 
follows:

PART 240--GENERAL RULES AND REGULATIONS, SECURITIES EXCHANGE ACT OF 
1934

    1. The authority citation for Part 240 continues to read in part as 
follows:

    Authority: 15 U.S.C. 77c, 77d, 77g, 77j, 77s, 77z-2, 77eee, 
77ggg, 77nnn, 77sss, 77ttt, 78c, 78d, 78f, 78i, 78j, 78j-1, 78k, 
78k-1, 78l, 78m, 78n, 78o, 78p, 78q, 78s, 78u-5, 78w, 78x, 78ll(d), 
77mm, 79q, 79t, 80a-20, 80a-23, 80a-29, 80a-37, 80b-3, 80b-4 and 
80b-11, unless otherwise noted.

* * * * *


Sec. 240.17a-24  [Removed]

    2. Section 240.17a-24 is removed.
    3. Section 240.17Ac2-2 is revised to read as follows:


Sec. 240.17Ac2-2  Annual reporting requirement for registered transfer 
agents.

    (a) Every transfer agent registered on June 30 shall file an annual 
report on Form TA-2 (Sec. 249b.102 of this chapter) by August 31 of 
that calendar year. Form TA-2 shall be completed in accordance with the 
instructions contained in the form.

[[Page 15317]]

    (1) A registered transfer agent that received fewer than 1,000 
items for transfer and fewer than 1,000 items for processing in the 
reporting period and that did not maintain master securityholder files 
for more than 1,000 individual securityholder accounts as of June 30 of 
the reporting period shall complete only Questions 1 through 5, 10, 11, 
and the signature section of Form TA-2 (Sec. 249b.102 of this chapter).
    (2) A named transfer agent, as defined in Sec. 240.17Ad-9(j), that 
engaged a service company, as defined in Sec. 240.17Ad-9(k), to perform 
all of its transfer and processing functions during the reporting 
period shall complete only Questions 1 through 4 and the signature 
section of Form TA-2 (Sec. 249b.102 of this chapter).
    (3) A named transfer agent, as defined in Sec. 240.17Ad-9(j) that 
engaged a service company, as defined in Sec. 240.17Ad-9(k), to perform 
some but not all of its transfer and processing functions during the 
reporting period shall complete all of Form TA-2, (Sec. 249b.102 of 
this chapter) but shall enter zero (0) for those questions which relate 
to functions performed by the service company on behalf of the named 
transfer agent.
    (b) For purposes of this section, the term reporting period shall 
mean the 12 months ending June 30 of the year for which the form is 
being filed.

PART 249b--FURTHER FORMS, SECURITIES EXCHANGE ACT OF 1934

    4. The authority citation for Part 249b continues to read in part 
as follows:

    Authority: 15 U.S.C. 78a, et seq., unless otherwise noted;

* * * * *
    5. Form TA-2 (referenced in Sec. 249b.102) is revised to read as 
follows:

    [Note: Form TA-2 does not and the amendments will not appear in 
the Code of Federal Regulations.]

United States Securities and Exchange Commission, Washington, D.C. 
20549

Instructions for Use of Form TA-2

    Form TA-2 is to be used by transfer agents registered pursuant to 
Section 17A of the Securities Exchange Act of 1934 for filing the 
annual report of transfer agent activities.
    ATTENTION: Certain sections of the Securities Exchange Act of 1934 
applicable to transfer agents are referenced below. Transfer agents are 
urged to review all applicable provisions of the Securities Exchange 
Act of 1934, the Securities Act of 1933, and the Investment Company Act 
of 1940, as well as the applicable rules promulgated by the SEC under 
those Acts.

I. General Instructions for Filing and Amending Form TA-2.

    A. Terms and Abbreviations. The following terms and abbreviations 
are used throughout these instructions:
    1. ``Act'' means the Securities Exchange Act of 1934.
    2. ``Aged record difference'', as defined in Rule 17Ad-11(a)(2), 
means a record difference that has existed for more than 30 calendar 
days.
    3. ``ARA'' means the appropriate regulatory agency, as defined in 
Section 3(a)(34)(B) of the Act.
    4. ``Form TA-2'' includes the Form TA-2 itself and any attachments.
    5. ``Lost securityholder'', as defined in Rule 17Ad-17, means a 
securityholder: (i) to whom an item of correspondence that was sent to 
the securityholder at the address contained in the transfer agent's 
master securityholder file has been returned as undeliverable; 
provided, however, that if such item is re-sent within one month to the 
lost securityholder, the transfer agent may deem the securityholder to 
be a lost securityholder as of the day the re-sent item is returned as 
undeliverable; and (ii) for whom the transfer agent has not received 
information regarding the securityholder's new address.
    6. ``Named transfer agent'', as defined in Rule 17Ad-9(j), means a 
registered transfer agent that has been engaged by an issuer to perform 
transfer agent functions for an issue of securities but has engaged a 
service company (another registered transfer agent) to perform some or 
all of those functions.
    7. ``Outside registrar'', as defined in Rule 17Ad-1(b), means a 
transfer agent which performs only the registrar function for the 
certificate or certificates presented for transfer and includes the 
persons performing similar functions with respect to debt issues. See 
also Section 3(a)(25)(B) of the Act.
    8. ``Record difference'' means any of the imbalances described in 
Rule 17Ad-9(g).
    9. ``Registrant'' means the transfer agent on whose behalf the Form 
TA-2 is filed.
    10. ``Reporting period'' means the 12 months ending June 30 of the 
year for which Form TA-2 is being filed.
    11. ``Rule'' or ``Rules'' are found in Volume 17, Section 240 of 
the Code of Federal Regulations (CFR) (e.g., Rule 17Ad-1 is found at 17 
CFR 240.17Ad-1).
    12. ``SEC'' means the United States Securities and Exchange 
Commission.
    13. ``Service company'' means the registered transfer agent engaged 
by a named transfer agent to perform transfer agent functions for that 
named transfer agent, as defined in Rule 17Ad-9(k).
    14. ``Transfer agent'', as defined in Section 3(a)(25) of the Act, 
means any person who engages on behalf of an issuer of securities or on 
behalf of itself as an issuer in at least one of the functions 
enumerated therein.

B. Who Must File; When to File

    1. Every transfer agent that is registered on June 30 shall file 
Form TA-2 in accordance with the instructions contained therein by 
August 31 of that calendar year.
    a. A registered transfer agent that received fewer than 1,000 items 
for transfer and fewer than 1,000 items for processing during the 
reporting period and that did not maintain master securityholder files 
for more than 1,000 individual securityholder accounts as of June 30 of 
the reporting period is required to complete only Questions 1 through 
5, 10, and 11, and the signature section of Form TA-2.
    b. A named transfer agent that engaged a service company to perform 
all of its transfer and processing functions during the reporting 
period is required to complete only Questions 1 through 4 and the 
signature section of Form TA-2.
    c. A named transfer agent that engaged a service company to perform 
some but not all of its transfer and processing functions during the 
reporting period must complete all of Form TA-2 but should enter zero 
(0) for those questions that relate to functions performed by the 
service company on behalf of the named transfer agent.
    2. The date on which any filing is actually received by the SEC is 
the Registrant's filing date provided that the filing complies with all 
applicable requirements. A filing that does not comply with applicable 
requirements may be rejected by the SEC. The SEC's receipt of a filing, 
however, shall not constitute an SEC finding that the filing has been 
filed as required or that the information therein is accurate, current, 
or complete.

C. Number of Copies; How and Where to File.

    The Registrant must file the original and two copies of Form TA-2 
with the SEC. The original copy of Form TA-2 must be manually signed 
and any additional copies may be photocopies of the signed original 
copy. All copies must be legible and on good quality 8\1/2\ x 11 inch 
white paper. The Registrant must keep an exact copy of any filing for 
its records.
    The Registrant must file Form TA-2 directly with the SEC at: 
Securities and

[[Page 15318]]

Exchange Commission, Office of Filings and Information Services, Mail 
Stop A-2, 450 5th Street, N.W., Washington, DC 20549.

II. Special Instructions for Filing Form TA-2

    A. Indicate the year for which Form TA-2 is filed in the box at the 
upper left hand corner. A transfer agent registered on June 30 shall 
file Form TA-2 by August 31 of that calendar year even if the transfer 
agent conducted business for less than the entire reporting period.
    B. In answering Question 4, indicate the number of items received 
for transfer and the number of items received for processing during the 
reporting period. Omit the purchase and redemption of open-end 
investment company shares. Report those items in response to Question 
9.
    C. In answering Questions 5 and 6, include closed-end investment 
company securities in the corporate equity securities category.
    In answering Question 5.a, include direct purchase and dividend 
reinvestment plan accounts in the total number of individual 
securityholder accounts maintained. In Question 5.b., include dividend 
reinvestment plan accounts only. In Question 5.c., include direct 
purchase plan accounts only. In Question 5.d., include American 
Depositary Receipts (ADRs) in the corporate equity or corporate debt 
category, as appropriate, and include direct purchase and dividend 
reinvestment plan accounts in the corporate equity or open-end 
investment company securities category, as appropriate.
    In answering Question 6, all series of debt securities issued under 
a single indenture are to be counted as one issue. Open-end investment 
company securities portfolios are to be counted as one issue per CUSIP 
number.
    D. In answering Question 8.c., exclude coupon payments and 
transfers of record ownership as a result of corporate actions.
    E. In answering Question 9, exclude non-value transactions such as 
name or address changes.

III. Federal Information Law and Requirements

    SEC's Collection of Information: An Agency may not conduct or 
sponsor, and a person is not required to respond to, a collection of 
information unless it displays a currently valid control number. Under 
Sections 17, 17A(c) and 23(a) of the Act and the rules and regulations 
thereunder, the SEC is authorized to solicit from registered transfer 
agents the information required to be supplied on Form TA-2. The filing 
of this Form is mandatory for all registered transfer agents. The 
information will be used for the principal purpose of regulating 
registered transfer agents but may be used for all routine uses of the 
SEC or of the ARAs. Information supplied on this Form will be included 
routinely in the public files of the ARAs and will be available for 
inspection by any interested person. Any member of the public may 
direct to the Commission any comments concerning the accuracy of the 
burden estimate on the application facing page of this Form, and any 
suggestions for reducing this burden. This collection of information 
has been reviewed by the Office of Management and Budget in accordance 
with the clearance requirements of 44 U.S.C. 3507. The applicable 
Privacy Act system of records is SEC-2. This form is subject to the 
routine uses set forth at 40 FR 39255 (Aug. 27, 1975) and 41 FR 5318 
(Feb. 5, 1976).
    File Number:

----------------------------------------------------------------------
    For the reporting period ending June 30, ________

United States Securities and Exchange Commission, Washington, D.C. 
20549

FORM TA-2--Form for Reporting Activities of Transfer Agents Registered 
Pursuant to Section 17A of the Securities Exchange Act of 1934

    1. Full name of Registrant as stated in Question 3 of Form TA-1: 
(Do not use Form TA-2 to change name or address.)

----------------------------------------------------------------------
    2. a. During the reporting period, has the Registrant engaged a 
service company to perform any of its transfer and processing 
functions? (Check appropriate box.)
____ All  ____ Some  ____ None
    b. If the answer to subsection (a) is all or some, list on the 
lines provided the name(s) and address(es) of all service 
company(ies) engaged.

----------------------------------------------------------------------

----------------------------------------------------------------------

----------------------------------------------------------------------

----------------------------------------------------------------------

----------------------------------------------------------------------

    3. a. Appropriate regulatory agency (Check one box only.)
____ Comptroller of the Currency
____ Federal Deposit Insurance Corporation
____ Board of Governors of the Federal Reserve System
____ Securities and Exchange Commission
    b. During the reporting period, has the Registrant amended Form 
TA-1 within 60 calendar days following the date on which information 
reported therein became inaccurate, incomplete, or misleading? 
(Check appropriate box.)
____ Yes, filed amendment(s)
____ No, failed to file amendment(s)
____ Not applicable
    c. If the answer to subsection (b) is no, provide an explanation 
on the lines provided.

----------------------------------------------------------------------

----------------------------------------------------------------------

----------------------------------------------------------------------

----------------------------------------------------------------------


If the response to any question is none or zero, enter
 ``0''
4. Number of items received during the reporting period:
    a. Transfer............................................     ________
    b. Processing (outside registrar function).............     ________

[[Page 15319]]

 
5. a. Number of individual securityholder accounts,             ________
 including direct purchase and dividend reinvestment plan
 accounts, maintained as of June 30........................
    b. Number of individual securityholder dividend             ________
     reinvestment plan accounts maintained as of June 30...
    c. Number of individual securityholder direct purchase      ________
     plan accounts maintained as of June 30................
    d. Approximate percentage of individual securityholder
     accounts, including direct purchase and dividend
     reinvestment plan accounts, from subsection (a)
     maintained in the following categories as of June 30:.
 


--------------------------------------------------------------------------------------------------------------------------------------------------------
                                         Corporate debt       Open-end  investment    Limited  partnership      Municipal debt
   Corporate  equity  securities           securities          company  securities         securities             securities         Other  securities
--------------------------------------------------------------------------------------------------------------------------------------------------------
 
 
 
 
--------------------------------------------------------------------------------------------------------------------------------------------------------

6. Number of securities issues for which Registrant acts in the 
following capacities, as of June 30:
    a. Receives items for transfer and maintains the master 
securityholder files:
    b. Receives items for transfer but does not maintain the master 
securityholder files:
    c. Does not receive items for transfer but maintains the master 
securityholder files:

--------------------------------------------------------------------------------------------------------------------------------------------------------
                                         Corporate debt       Open-end  investment    Limited  partnership      Municipal debt
   Corporate  equity  securities           securities          company  securities         securities             securities          Other securities
--------------------------------------------------------------------------------------------------------------------------------------------------------
a.
b.
c.
--------------------------------------------------------------------------------------------------------------------------------------------------------


7. a. Number and aggregate market value of securities aged record
 differences, existing for more than 30 days, as of June 30: ...........
    i. Number of issues....................................       ______
    ii. Market value (in dollars)..........................       ______
    b. Number of quarterly reports regarding buy-ins filed        ______
     by the Registrant with its ARA (including the SEC)
     during the reporting period pursuant to Rule 17Ad-
     11(c)(2)..............................................
    c. During the reporting period, has the Registrant been
     notified by its ARA (including the SEC) that it failed
     to file quarterly reports regarding buy-ins pursuant
     to Rule 17Ad-11(c)(2)?................................
                     ____ Yes  ____ No
    d. If the answer to subsection (c) is yes, provide an
     explanation for each notification on the lines
     provided..............................................
 

----------------------------------------------------------------------

----------------------------------------------------------------------

----------------------------------------------------------------------

----------------------------------------------------------------------


8. Scope of certain additional types of activities performed:
    a. Number of issues for which dividend reinvestment           ______
     plan services are provided, as of June 30.............
    b. Number of issues for which direct purchase plan            ______
     services are provided, as of June 30..................
    c. Dividend disbursement and interest paying agent
     activities conducted during the reporting period:
    i. number of issues....................................       ______
    ii. amount (in dollars)................................       ______
9. Number of open-end investment company securities purchases and
 redemptions (``transactions'') excluding dividend and distribution
 postings processed during the reporting period:
    a. Total number of transactions processed..............       ______
    b. Number of transactions processed on a date other           ______
     than date of receipt of order (``as ofs'')............
10. a. Number of lost securityholder accounts as of June 30       ______
    b. Percentage of total accounts represented by lost           ______
     securityholder accounts as of June 30.................
    c. Number of lost securityholder accounts that have           ______
     been remitted to states during the reporting period...
    d. Percentage of total accounts represented by lost           ______
     securityholder accounts that have been remitted to
     states as of June 30..................................
11. Number of lost securityholder accounts listed on the transfer
 agent's master securityholder files during the reporting period:
    a. For which a first data base search has been                ______
     conducted.............................................
    b. For which a correct address has been obtained              ______
     through the first data base search....................
    c. For which a second data base search has been               ______
     conducted.............................................
    d. For which a correct address has been obtained              ______
     through the second data base search...................
12. a. During the reporting period, has the Registrant (except when
 acting as an outside registrar) always been in compliance with the
 turnaround time for routine items as set forth in Rule 17Ad-2(a)?
                    ____ Yes  ______ No
 


If the answer to subsection (a) is no, complete subsections (i) through
 (iii).
    i. Provide the number of months during the reporting          ______
     period in which the Registrant was not in compliance
     with the turnaround time for routine items according
     to Rule 17Ad-2(a).....................................
    ii. Provide the number of written notices Registrant          ______
     filed during the reporting period with the SEC and
     with its ARA pursuant to Rule 17Ad-2(c) that reported
     its noncompliance with turnaround time for routine
     items according to Rule 17Ad-2(a).....................
    iii. Provide the number of times during the reporting         ______
     period that the Registrant was notified by its ARA
     that it failed to file written notices with its ARA
     pursuant to Rule 17Ad-2(c) to report its noncompliance
     with turnaround time for routine items according to
     Rule 17Ad-2(a)........................................
b. Has the Registrant, acting as an outside registrar, always been in
 compliance during the reporting period with the turnaround time for
 routine items as set forth in Rule 17Ad-2(b)?
                    ____ Yes  ______ No
 
If the answer to subsection (b) is no, complete subsections (i) through
 (iii).

[[Page 15320]]

 
    i. Provide the number of months during the reporting          ______
     period in which the Registrant was not in compliance
     with the turnaround time for routine items according
     to Rule 17Ad-2(b).....................................
    ii. Provide the number of written notices Registrant          ______
     filed during the reporting period with the SEC and
     with its ARA pursuant to Rule 17Ad-2(d) that reported
     its noncompliance with turnaround time for routine
     items according to Rule 17Ad-2(b).....................
    iii. Provide the number of times during the reporting         ______
     period that the Registrant was notified by its ARA
     that it failed to file written notices with its ARA
     pursuant to Rule 17Ad-2(d) to report its noncompliance
     with turnaround time for routine items according to
     Rule 17Ad-2(b)........................................
 

    ATTENTION: INTENTIONAL MISSTATEMENTS OR OMISSIONS OF FACT 
CONSTITUTE FEDERAL CRIMINAL VIOLATIONS. See 18 U.S.C. 1001 and 15 
U.S.C. 78ff(a)
    SIGNATURE: The Registrant submitting this Form, and the person 
signing the Form, hereby represent that all the information 
contained in the Form is true, correct, and complete.
Manual signature of Official responsible for Form:

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Title:

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Telephone number:

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Name of Official responsible for Form: (First name, Middle name, 
Last name)

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Date signed (Month/Day/Year):

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    By the Commission.

    Dated: March 23, 1999.
Margaret H. McFarland,
Deputy Secretary.
[FR Doc. 99-7840 Filed 3-30-99; 8:45 am]
BILLING CODE 8010-01-P