FR4013_20160629_omb

Supporting Statement for the
Notice Claiming Status as an Exempt Transfer Agent
(FR 4013; OMB No. 7100-0137)
Summary
The Board of Governors of the Federal Reserve System (Board), under delegated
authority from the Office of Management and Budget (OMB), proposes to extend for three years,
without revision, the mandatory Notice Claiming Status as an Exempt Transfer Agent (FR 4013;
OMB No. 7100-0137). Banks, bank holding companies (BHCs), savings and loan holding
companies (SLHCs), and trust companies subject to the Board’s supervision that are low-volume
transfer agents submit a notice to the Board certifying that they qualify for this exemption.
Transfer agents are institutions that provide securities transfer, registration, monitoring, and other
specified services on behalf of securities issuers. The purpose of the notice, which is effective
until the agent withdraws it, is to claim exemption from certain rules and regulations of the
Securities and Exchange Commission (SEC). The Board uses the notices for supervisory
purposes because the SEC has assigned to the Board responsibility for collecting the notices and
verifying their accuracy through examinations of the respondents. There is no formal reporting
form (the FR 4013 designation is for internal purposes only) and each notice is filed as a letter.
The Board proposes to provide the option of electronic submission of the FR 4013 to a
secure Board e-mail address. The current annual burden for the FR 4013 is estimated to be 20
hours.
Background and Justification
Pursuant to section 17A(d) of the Securities Exchange Act of 1934, as amended in 1975
(the Act), the SEC has full authority to issue rules and regulations governing the conduct of all
institutions registered as transfer agents pursuant to the Act. The Act requires transfer agents
that are banks or BHCs to register with their primary banking regulator, that is, the Board, the
Federal Deposit Insurance Corporation (FDIC), or the Office of the Comptroller of the Currency
(OCC).1 SEC rule 240.17Ad-4 allows low-volume transfer agents, whether registered with the
SEC or with one of the bank regulatory agencies, to claim exemption from certain of the SEC’s
rules applicable to registered transfer agents. In the case of Board-registered transfer agents, a
notice is filed with the Board. The Board reviews the notices for conformity with SEC
requirements. Also, the Board conducts separate examinations of registered banks’ transfer
agent operations, and the notices help staff determine which entities may be eligible for extended
examination frequency. This information is not available elsewhere.
Description of Information Collection
The Act requires registered transfer agents to maintain a log that accumulates monthly
totals of items received “for processing” and “for transfer.” If a transfer agent can affirm that its
processing and transfer volumes during the most recent six-month period (including the current
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This includes nondeposit subsidiary trust companies, which are banks within the meaning of section 3(a)(6) of the
Act.

month) were each less than 500 items, then it can claim the exemption. For registered transfer
agents that file with the Board, the notice claiming the exemption is a letter that certifies that the
transfer agent has met the requirements for qualifying it as an exempt transfer agent under SEC
regulation (17 CFR 240.17Ad-4(b)). The letter of notice must contain the required affirmations
specified in the rule, but otherwise there is no standard format.
Although the exemption may continue indefinitely, the transfer agent must recalculate
data for the exemption with each succeeding month’s activity for the most recent six-month
period. A transfer agent whose processing or transfer volume fluctuates enough so that its status
alternates between exempt and nonexempt usually opts to withdraw the exemption claim and
operates as a nonexempt transfer agent. Currently, 10 transfer agents registered with the Board
have an exemption notice on file.
Time Schedule for Information Collection
Board-registered transfer agents wishing to claim an exemption from certain SEC
regulations file a notice with the Board if they are eligible. The notice is filed within 10 business
days following the six-month period mentioned above. If the notice conforms to regulatory
requirements, the Board sends a letter of acknowledgment to the agent stating that it is an exempt
transfer agent pursuant to this provision. As indicated above, the exemption remains in effect as
long as the processing and transfer volumes for the most recent six-month period remain under
the exemption threshold. Board-registered transfer agents withdraw from exempt status by
sending a letter to the Board. The Board does not publish the information it collects in the
notices.
Legal Status
The Board’s Legal Division has determined that the FR 4013 is authorized pursuant to
section 17A of the Act (15 U.S.C. § 78q-1, 17 CFR § 240.17Ad-4, and 12 CFR §§ 208.31 and
225.4(d)). Section 17A(a)(2)(A)(i) of the Act (15 U.S.C. § 78q-1(a)(2)(A)(i)), directs the SEC to
use its authority under the Act “to facilitate the establishment of a national system for the prompt
and accurate clearance and settlement of transactions in securities.” Pursuant to this
Congressional directive, the SEC promulgated regulations governing the performance of transfer
agent functions by registered transfer agents. See 17 CFR §§ 240.17Ad-2, 240.17Ad-3, and
240.17Ad-6(a) (1) through (7) and (11). SEC Rule 17Ad-4 exempts certain low-volume transfer
agents from certain of these regulations provided that the transfer agent files a notice with its
appropriate regulatory agency certifying that it qualifies for the exemption (17 C.F.R. §
240.17Ad-4). Pursuant to the Act, the SEC’s transfer agent rules as well as the low-volume
transfer agent exemption are applicable to all registered transfer agents, including those regulated
by the Board. See Section 17A(d)(1) of the Act (15 U.S.C. § 78q-1(d)(1)). The Board’s
regulations further provide that Board-regulated transfer agents are subject to the SEC’s transfer
agent rules, including the low-volume transfer agent exemption. See 12 CFR § 208.31(b)
(applicable to state member bank transfer agents), 12 CFR § 225.4(d) (providing that the Board’s
regulations governing state member bank transfer agents are equally applicable to BHCs and
certain nonbank subsidiaries that act as transfer agents), and 12 CFR § 238.4(b) (requiring
reports from SLHCs). The FR 4013 is mandatory for registered transfer agents seeking the low-

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volume exemption. Because the information regarding a transfer agent’s volume of transactions
is public information through the filing and publication of the agents’ Form TA-2 with the SEC,
the individual respondent data collected by the FR 4013 is not confidential.
Consultation Outside the Agency
On April 7, 2016, the Board published a notice in the Federal Register (81 FR 20384)
requesting public comment for 60 days on the extension, without revision, of the FR 4013. The
comment period for this notice expired on June 6, 2016. The Board did not receive any
comments. On June 29, 2016, the Board published a final notice in the Federal Register
(81 FR 42357).
Estimate of Respondent Burden
The annual reporting burden for the FR 4013 is estimated to be 20 hours, based on an
estimated average response time of two hours for 10 respondents. However, because this
information collection is event-generated, it is not possible to predict exactly how many notices
would be filed in a particular year. Although in recent years the Federal Reserve has been
receiving an average of five notices per year, there are currently 10 transfer agents registered
with the Board that have an exemption notice on file. These reporting requirements represent
less than 1 percent of total Federal Reserve System paperwork burden.

FR 4013
Notice claiming status as an
exempt transfer agent

Number of
respondents2

Annual
frequency

Estimated
average hours
per response

Estimated
annual burden
hours

10

1

2

20

The total annual cost to the public for this information collection is estimated to be $1,063.3
Sensitive Questions
This collection of information contains no questions of a sensitive nature, as defined by
OMB guidelines.
Estimate of Cost to the Federal Reserve System
The cost to the Federal Reserve System associated with the FR 4013 is negligible.
2

Of these respondents, none are small entities as defined by the Small Business Administration (i.e., entities with
less than $550 million in total assets) www.sba.gov/contracting/getting-started-contractor/make-sure-you-meet-sbasize-standards/table-small-business-size-standards.
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Total cost to the public was estimated using the following formula: percent of staff time, multiplied by annual
burden hours, multiplied by hourly rates (30% Office & Administrative Support at $17, 45% Financial Managers at
$65, 15% Lawyers at $66, and 10% Chief Executives at $89). Hourly rates for each occupational group are the
(rounded) mean hourly wages from the Bureau of Labor and Statistics (BLS), Occupational Employment and Wages
May 2015, published March 30, 2016 www.bls.gov/news.release/ocwage.t01.htm. Occupations are defined using
the BLS Occupational Classification System, www.bls.gov/soc/.

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