What is "transfer agent"

n. (context legal English) An entity designated by a publicly-traded corporation to keep track of the ownership of the corporation's stocks and bonds

n. an agency (usually a bank) that is appointed by a corporation to keep records of its stock and bond owners and to resolve problems about certificates

Public companies typically use transfer agents to keep track of the individuals and entities that own their stocks and bonds. Most transfer agents are also banks or trust companies, but sometimes a company acts as its own transfer agent.

Transfer agents perform three main functions:

1. Issue and cancel certificates to reflect changes in ownership. For example, when a company declares a stock dividend or stock split, the transfer agent issues new shares. Transfer agents keep records of who owns a company's stocks and bonds and how those stocks and bonds are held—whether by the owner in certificate form, by the company in book-entry form, or by the investor's brokerage firm in street name. They also keep records of how many shares or bonds each investor owns.
2. Act as an intermediary for the company. A transfer agent may also serve as the company's paying agent to pay out interest, cash and stock dividends, or other distributions to stock- and bondholders. In addition, transfer agents act as proxy agent (sending out proxy materials), exchange agent (exchanging a company's stock or bonds in a merger), tender agent (tendering shares in a tender offer), and mailing agent (mailing the company's quarterly, annual, and other reports).
3. Handle lost, destroyed, or stolen certificates. Transfer agents help shareholders and bondholders when a stock or bond certificate has been lost, destroyed, or stolen. Also a medallion signature stamp officer is the transfer agent.