Frequently Asked Questions
Here are some of the most common questions from our clients.
Transferring stock can be a difficult and complicated process, here at TA Escrow we get asked on a constant basis many questions relating to transferring securities.
What is my stock worth?
TA Escrow team of advisers will be able to inform you of the most up to date stock valuation both public and private. However, bear in mind that sometimes the third party information we receive from companies and investors can vary.
How can I change my name on the stock?
In order to change your name on your stock certificate a letter of instruction is needed and the actual document. Your signature can be signed (Helen Smith formerly Helen Brown).
How do I change me address?
You should always update you address with any companies, trading houses, agents, brokers that you have securities with or dealing. When you change then the Transfer Agent needs to be notified.
To update your address with TA Escrow, send an email (with details of the securities, your name and your new address) to – email@example.com
How do I transfer stock to my spouse or somebody else?
To do this and transfer your securities please send TA Escrow the following:
A letter of instruction with the details of name, address, social security number and number of shares for each new account.
The actual Stock Certificate.
If you retain records of my stock do I have to hold the Certificates?
Although we hold all the information and records of your securities in many cases for sale or transfer an actual certificate must be presented.
It is our advice that you hold your documentation somewhere secure such as a safe, security box, with your bank or somewhere similar. Losing a certificate can be costly as normally you will have to pay a percentage of their value to have them replaced.
Having said that, the SEC has recently approved a new Direct Registration System (DRS). It is a new way that permits shareholders to hold and transfer their shares. You will still have all the previous rights and privileges afforded to shareholders, without the necessity of having the actual certificate.
I have lost my certificate, what do I need to do?
To start the Lost Certificate Process you need to complete the PDF form (down loadable from our website) and send to us as per the instructions on the Lost Securities Form Letter.
If you have found your securities certificates after filing the documentation to us, please use the Recovery Form Letter to remove the stop that was placed on your Lost Certificates.
What are Restricted Securities?
Restricted Securities are issued in private sales that are acquired unregistered from the issuer or from an agent.
Typically in this sort of transaction, investors receive their securities through private placement offerings, Regulation D, employee stock bonus schemes, as compensation, or in exchange for supplying set-up or seed money to the company.
Rule 144 (a)(3) identifies what sales produce restricted securities.
Affiliate Control Securities are those held by an agent or affiliate of the issuing company. An affiliate is usually somebody like a director or a large shareholder that has a direct relationship with the issuer.
Affiliate Control means the shareholder has power to direct the management and policies of the company in question, whether through the ownership of voting securities, by contract, or otherwise. If you buy securities from a controlling person or “affiliate,” you take affiliate control securities, even if they were not restricted in the affiliate’s hands. If the shares were otherwise registered and not restricted by Rule 144.
If you buy Restricted Securities, your certificate will always have a “restricted” legend stamped across it. This designates that the stocks may not be sold unless they go through a de-restricted process first, normally carried out via a transfer agent, or are exempt from registration regulations. The face of Affiliate Control certificates will show this designation and may not have a legend on the reverse of the document, depending on whether they are registered or not.
What is Rule 144?
When you acquire restricted securities or hold control securities, you must firstly have them de-restricted before you are able to sell them in the marketplace. Rule 144 allows public resale of restricted and control securities if a number of conditions are met.
What are the conditions of Rule 144 for Affiliate Control Shares?
When you purchase restricted securities or hold affiliate control securities, you have to find an extension from the requirements to sell. Rule 144 allows resale of restricted share if the following is me:
The restricted securities must be at least six months old if the issuing firm is filing with SEC otherwise twelve months. This holding term for a non-reporting company is a year, with the provision a legal opinion letter should be given addressing the “shell” status of the issuer.
There must be adequate current fiscal and contact details about the issuer of the stocks before the sale can be made.
If the shareholder is an affiliate, the number of equity securities that can be sold during any three month period cannot exceed the greater of 1% of the outstanding shares of similar class that are being sold, or if the class is listed on a stock exchange, the greater of 1% or the average reported weekly trading volume during the four weeks preceding the filing of a notice on Form 144.
Over-the-counter stocks, including those quoted on the OTC Bulletin Board and the Pink Sheets, can only be sold using the 1% measurement.
In the case of affiliate controlled shares, the transaction must be carried out as a routine trading transaction (brokers may not receive more than normal commission).
If you are an affiliate, you must file a notice with the SEC on form 144. If the transaction is more than 5,000 shares or the value is greater than $50,000 in any three month period. Once you have filed the sale must go through within three months, if it does not you have to file for an amended notice.
If I am not an affiliate of the issuer, what conditions of rule 144 must I comply with?
If you are not (and have not been for at least 3 months) an affiliate of the company issuing the securities and have held restricted shares for a minimum of twelve months you can sell the shares regardless to the conditions of Rule 144.
If the issuer of the stock is subject to the Securities Act reporting requirements and you have held the securities for at least six months but less than twelve, you can sell the stock as long as you can satisfy the current public information condition.
If the shares are under six months old, TA Escrow Limited will not remove any legend without permission of the issuer. This can be done with an opinion letter from the Issuer’s legal representative allowing that the restricted legend can be removed, and the reasons why.
If you have bought restricted securities from another non-affiliate, you can tack on that non-affiliate’s holding period to your stock. For gifts made by an affiliate, the holding period starts when the shares were purchased and not when they were given. In the case of stock options, including employee stock options, the holding period starts on the date that option is exercised and not the date it was granted.
To commence the process, contact the company that issued the securities, or you can contact TA Escrow Limited, to inquire about the details for removing a legend. Transferring restricted securities and removing a legend can be a complicated and tricky business so we recommend that you also seek legal advice from somebody specializing in securities law.
How do I lift restrictions?
Normally restricted securities are only restricted for twelve months if they were part of a company employee plan or as an exchange for set-up capital. Once the securities have been held for twelve months, a request for the restriction removal can be made as long as it has the necessary documentation.
You can arrange this through the company responsible for the administrating firm, liquidating company or privately by providing the following:
144D Seller’s Representation Letter
Available to download from the Transfer Securities website under Resources and Download Forms. (we recommend that the shareholder contacts us to ensure they provide the correct documentation and we will give an indication of the appropriate fees that may be liable).
Upon receipt and waiting approval from the corporation, the restriction will be removed and a new securities certificate issued.
Restriction Removals cannot be done under any circumstance for share issued by a “Shell” status company as laid down by the SEC, and only be removed if the twelve month reporting requirements are met and are up to date.