The SEC proposed amendments to Rule 17Ad-17 that would impact the obligations of transfer agents, brokers, and dealers to search for lost security holders, among other things. The proposal is mandated by Section 929W of the Dodd-Frank Reform Act .  Changes that would be made:

• Added subsection (g), Due Diligence for the Delivery of Dividends, Interest, and Other Valuable Property Rights” to Section 17A of the Exchange Act.
• Subsection (g) directs the SEC to revise Rule 17Ad-17, Transfer Agents’ Obligation to Search for Lost Security Holders, to:

1. extend to brokers and dealers the requirement of Rule 17Ad-17 to search for lost security holders;
2. add to Rule 17Ad-17 a requirement that “paying agents” notify “missing security holders” in writing that the paying agent has sent the missing security holder a check that has not yet been negotiated;
3. add to Rule 17Ad-17 an exclusion for paying agents from the notification requirements when the value of the not yet negotiated check is less than $25; and
4. add to Rule 17Ad-17 a provision clarifying that the written notification requirements shall have no effect on State escheatment laws.

• Subsection (g) also requires the SEc to implement this subsection within one year of enactment of this subsection. 

 For further details, go to:   [SEC Proposed Rule Release 34-64099, 3/18/11]