Stock transfer
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Stock Transfer aka Securities Transfer
A company, usually a 3rd party unrelated to stock transactions, who cancels the name and certificate the former stockholder who 'sold' the stock, and substitutes the 'new' owners name on the Official Master Shareholder listing. The shares are issued in "Street name" which is the term given to securities held in the name of a brokerage on behalf of a customer, usually done to facilitate subsequent transactions. Street name refers to beneficial shareholders who maintain their ownership through a brokerage. Street name holders are the opposite of registered holders.
Stock transfer agents verify genuinity of owners of stock through signature guarantees. A signature guarantee is a warranty by the signature guarantor that the endorser of a stock certificate or stock power form is an appropriate person to endorse and thus transfer the security. Signatures on a stock certificate or stock power must have the Medallion Guarantee.
A Medallion Guarantee is also used to validate the genuineness of a document. It is backed by a bond and protects the issuer of the security and their transfer agent from fraudulently transferred securities. A Medallion Guarantee may be obtained from most major banks, brokerage firms or credit unions.
A Federal license is required from the US Securities and Exchange Commission to operate legally in the US. A Public Company usually only designates one company to transfer it's stock. Independent Stock Transfer Agents are independent of large Banks, but are fully capable of servicing even the largest companies, often at far less cost.
Stock Transfer Agents also run Annual Meetings as Inspector of Elections, Proxy Voting, and special meetings of shareholders. They are considered the Official Keeper of the Corporate Shareholder Records.
