Securities Lawyer's Deskbook                          published by The University of Cincinnati College of Law

Rule 17Ad-1 -- Definitions

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1. 1. The term item means:
      
      
      1. A certificate or certificates of the same issue of securities covered by one ticket (or, if there is no ticket, presented by one presentor) presented for transfer, or an instruction to a transfer agent which holds securities registered in the name of the presentor to transfer or to make available all or a portion of those securities;
         
         
      2. Each line on a "deposit shipment control list" or a "withdrawal shipment control list" submitted by a registered clearing agency; or
         
         
      3. In the case of an outside registrar, each certificate to be countersigned.
         
         
   2. If a "deposit shipment control list" or "withdrawal shipment control list" contains both routine and non-routine transfer instructions, a registered transfer agent shall at its option:
      
      
      1. Retain all transfer instructions listed on the shipment control list and treat each line on the shipment control list as a routine item; or
         
         
      2. Return promptly to the registered clearing agency a shipment control list line containing non-routine transfer instructions (together with a copy of the shipment control list, an explanation for the return instructions and all routine transfer instructions reflected on the same line) and treat each line on the shipment control list that reflects retained transfer instructions as a routine item.
         
         
   3. A "deposit shipment control list" means a list of transfer instructions that accompanies certificates to be cancelled and reissued in the nominee name of a registered clearing agency.
      
      
   4. A "withdrawal shipment control list" means a list of instructions (either in paper or electronic medium) that:
      
      
      1. Directs issuance of certificates in the names of persons or entities other than the registered clearing agency; and
         
         
      2. Accompanies certificates to be cancelled which are registered in the nominee name of a registered clearing agency, or directs the transfer agent to reduce certificate or position balances maintained by the transfer agent on behalf of a registered clearing agency under that clearing agency's transfer agent custody program
         
         
2. The term "outside registrar" with respect to a transfer item means a transfer agent which performs only the registrar function for the certificate or certificates presented for transfer and includes the persons performing similar functions with respect to debt issues.
   
   
3. An item is "made available" when
   
   
   1. In the case of an item for which the services of an outside registrar are not required, or which has been received from an outside registrar after processing, the transfer agent dispatches or mails the item to, or the item is awaiting pick-up by, the presentor or a person designated by the presentor, or
      
      
   2. In the case of an item for which the services of an outside registrar are required, the transfer agent dispatches or mails the item to, or the item is awaiting pick-up by, the outside registrar, or
      
      
   3. In the case of an item for which an outside registrar has completed processing, the outside registrar dispatches or mails the item to, or the item is awaiting pick-up by, the presenting transfer agent.
      
      
4. The "transfer" of an item is accomplished when, in accordance with the presentor's instructions, all acts necessary to cancel the certificate or certificates presented for transfer and to issue a new certificate or certificates, including the performance of the registrar function, are completed and the item is made available to the presentor by the transfer agent, or when, in accordance with the presentor's instructions, a transfer agent which holds securities registered in the name of the presentor completes all acts necessary to issue a new certificate or certificates representing all or a portion of those securities and makes available the new certificate or certificates to the presentor or a person designated by the presentor or, with respect to those transfers of record ownership to be accomplished without the physical issuance of certificates, completes registration of change in ownership of all or a portion of those securities.
   
   
5. The "turnaround" of an item is completed when transfer is accomplished or, when an outside registrar is involved, the transfer agent in accordance with the presentor's instructions completes all acts necessary to cancel the certificate or certificates presented for transfer and to issue a new certificate or certificates, and the item is made available to an outside registrar.
   
   
6. The term "process" means the accomplishing by an outside registrar of all acts necessary to perform the registrar function and to make available to the presenting transfer agent the completed certificate or certificates or to advise the presenting transfer agent, orally or in writing, why performance of the registrar function is delayed or may not be completed.
   
   
7. The "receipt" of an item or a written inquiry or request occurs when the item or written inquiry or request arrives at the premises at which the transfer agent performs transfer agent functions, as defined in section 3(a) of the Act.
   
   
8. A "business day" is any day during which the transfer agent is normally open for business and excludes Saturdays, Sundays, and legal holidays, or other holidays normally observed by the transfer agent.
   
   
9. An item is "routine" if it does not
   
   
   1. require requisitioning certificates of an issue for which the transfer agent, under the terms of its agency, does not maintain a supply of certificates;
      
      
   2. include a certificate as to which the transfer agent has received notice of a stop order, adverse claim, or any other restriction on transfer;
      
      
   3. require any additional certificates, documentation, instructions, assignments, guarantees, endorsements, explanations, or opinions of counsel before transfer may be effected;
      
      
   4. require review of supporting documentation other than assignments, endorsements or stock powers, certified corporate resolutions, signature, or other common and ordinary guarantees, or appropriate tax, or tax waivers;
      
      
   5. involve a transfer in connection with a reorganization, tender offer, exchange, redemption, or liquidation;
      
      
   6. include a warrant, right, or convertible security presented for transfer of record ownership within five business days before any day upon which exercise or conversion privileges lapse or change;
      
      
   7. include a warrant, right, or convertible security presented for exercise or conversion; or
      
      
   8. include a security of an issue which within the previous 15 business days was offered to the public, pursuant to a registration statement effective under the Securities Act of 1933, in an offering not of a continuing nature.
      
      
10. The term "depository-eligible securities issue" means an issue of securities that is eligible for deposit at any securities depository that is registered with the Commission under the Securities Exchange Act of 1934 as a clearing agency.

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