Security has been an operative word since ancient times when people began realizing the value of life and property. Every person or community takes steps to prevent any robber or criminal to seize one’s material possessions, not to mention one’s life or reputation.
Security is of prime importance, especially in the investment industry; and when considering investor management, that security can become even more crucial.
Providing safeguards against unauthorized transfer of securities is of great concern during any investment venture. Significant losses can arise from illegal transfers, not to mention harm done to the good relationship between a firm and its shareholders.
The task of determining the appropriate share management strategy lies in the hands of the companies, which would include, among others, establishing an efficient in-house procedure or working with a reliable transfer agent. However, knowing how the business process begins will help you appreciate the problem and the appropriate solutions needed?
Consider these few vital steps you can take in order to prevent unauthorized transfer of securities:
Learn How the Process Works
Knowing how the fundamental security procedures needed for a business works is the first task of a novice entrepreneur or even a veteran business-owner. Even if you intend to hire the services of a transfer agent, you have to familiarize yourself with the basic business process. You can visit the website of the U.S. Securities and Exchange Commission to avail of a broad range of choices of educational materials for business owners and new entrepreneurs.
Another security procedure to undertake to protect authenticity and prevent fraud is a signature guarantee, also known as a “medallion signature guarantee”. Signature guarantees can safeguard shareholders and their assets by preventing unauthorized transfers and potential losses. Moreover, a guaranteed signature minimizes the responsibility of any transfer agent managing the transaction process.
This security method is used in many transfers since the signature guarantee stamp acts as a warranty given by the transferring financial institution with regards to the authenticity of the signature.
Always Choose a Trusted Agent
Whereas some firms opt to serve as their own transfer agent, most of them would prefer to work with a third-party institution – a bank, trust company, etc. Transfer agents serve a vital and stable function in investor procedures, providing a strong bridge between a company and these financial institutions. For a problem-free process, always work with a dependable, trustworthy agent-partner who considers an open two-way line of communication as a crucial requirement for investment growth.
Fully appreciating the business process, working closely with a reliable agent and establishing safety checks can lead to prevention of unauthorized transfer of securities. If you are uncertain about what to do next in investor management, please get in touch with us, a full-service transfer agent, to get the expert help you need. And to learn more about our personalized solutions for your firm or business, contact us now.