Letter to SEC re: Rule 17Ad-16

Mr. Gerig,

The American Bankers Association (ABA) and its Corporate Trust Committee (the Committee) appreciate the Securities and Exchange Commission (SEC) providing an opportunity to comment on the necessity, utility, and efficiency of SEC's current interpretation of Rule 17Ad-16 (the Rule) and related examination practices. Since the Rule's adoption, the securities industry's issuance, transfer, and recordkeeping practices have evolved alongside technological developments and their broad adoption, such that market participants now have access to far more information much more quickly than when the Rule was adopted. Yet, ABA is concerned that, quite inexplicably, SEC examiners' expectations of registered transfer agents' (transfer agent) compliance with the Rule appear to have evolved on the assumption that market participants increasingly have less information and less timely access to information.

Though no change to the regulatory text of the Rule is necessary, ABA strongly believes SEC examiner expectations have diverged from the Rule's original purpose in ways that unduly burden industry and undermine SEC's broader mission. Requiring transfer agents to provide qualified registered securities depositories (depositories) detailed Rule 17Ad-16 notices comprised of information depositories already independently collect and publish is not only unnecessarily duplicative but also risks introducing reporting errors that may materially undermine the quality, clarity, and subsequent utility of information available to SEC and market participants and hampers further industry innovation.

As detailed below, ABA strongly encourages SEC to issue Staff Guidance making clear that depositories, like the Depository Trust Company (DTC), are the primary and comprehensive source of information on securities issuances and clarifying that the Rule’s requirement that a transfer agent provide written notice to the appropriate depository when the transfer agent assumes transfer agent services on behalf of an issuer does not apply at a security's issuance.

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