On 24 January 2011 the ASX released amendments to Listing Rule 8.14, permitting companies to enhance their fraud detection practices specific to off-market transfers, and charge a fee for the additional work involved. Essentially the company is not charging but their share registry is on their behalf.

In past years companies and their registries have been forbidden by the ASX to charge for processing off market transfers. The registries, one in particular, argued that brokers were charging for the same thing and they should be entitled to a fee. They conveniently neglected to note that the Companies whose share registry they maintained were actually paying them a substantial fee for maintaining the registry to start with!

In any event, recent Government Legislation relating to Counter Terrorism and Anti-Money Laundering has meant that most institutions are required to verify the identity of anyone who conducts any sort of transaction with them. Effectively this involves additional paper and system resources at the registry every time they touch a share transfer. They are probably justified in levying some form of fee for this extra work. Some have graciously conceded to minor exemptions for transfers out of deceased estates or which relate to employee share plan administration. If an estate firsts transfers to the executor/s that would be exempt but the later transfer from the executor/s to the beneficiary/ies would attract the fee.

Most registries have now implemented the fee structure and generally it sits at about AU$50 per transfer, although bulk transfers with the same owners may induce a discount…. Coupled with the fee are new requirements for identity verification, in particular of the transferor or seller. For individuals this generally means providing a certified copy of the passport or drivers licence and for companies it includes a certified copy of the Company’s registration document from the relevant Government Agency and the personal licences for the authorised signatories who execute the papers. Some registries have slightly different requirements but using the above as a guide would be a good start.

Given the sometimes urgent requirement to get transfers processed and new statements to the transferees, it would be of benefit to firms to be pro-active and obtain several certified copies of all clients’ identification papers prior to dealing with off market transfers, and to confirm with the registry involved the fee and payment methods prior to lodgement. Otherwise a back and forth rejection issue will begin which will only create delays to the registration process.

Unclaimed Banking Funds – massive dollars again go to the Government!!

Recently the annual unclaimed banking funds were listed with ASIC. The Gazette was nearly 600 pages long and included more than 75 individual listings with total funds exceeding AU$450,000 from New Zealand alone!!! The funds are generally from bank accounts that have been untouched for over 7 years or dividend payments from Banks that have remained unpresented for that period.

Of course the publication of the list has meant a flurry of letters from various money finding companies. Essentially these work on a straight out commission basis and generally they do their job. However the fees can be up to 25%….

If you or your clients receive any such letters please contact me and I can help you with the collection or point you in the direction to enable direct collection.

Relocated Levels

Please note our office has moved three floors up to Level 5, 275 George Street. We may eventually make it to the top!!

All other details remain unchanged.

PUBLICATION: ENVOY – The newsletter of The New Zealand Institute of Legal Executives
DATE: June 2011
AUTHOR: Andrew Johnstone, APEARS, Sydney, Australia

Start typing and press Enter to search