CFR 17cfr240[2].17f-1

[Code of Federal Regulations]

[Title 17, Volume 3]

[Revised as of April 1, 2004]

From the U.S. Government Printing Office via GPO Access

[CITE: 17CFR240.17f-1]

[Page 452-455]

TITLE 17--COMMODITY AND SECURITIES EXCHANGES

CHAPTER II--SECURITIES AND EXCHANGE COMMISSION (CONTINUED)

PART 240_GENERAL RULES AND REGULATIONS, SECURITIES EXCHANGE ACT OF 1934--Table of Contents

Subpart A_Rules and Regulations Under the Securities Exchange Act of

1934

Sec. 240.17f-1 Requirements for reporting and inquiry with respect to

missing, lost, counterfeit or stolen securities.

(a) Definitions. For purposes of this section:

(1) The term reporting institution shall include every national

securities exchange, member thereof, registered securities association,

broker, dealer, municipal securities dealer, government securities

broker, government securities dealer, registered transfer agent,

registered clearing agency, participant therein, member of the Federal

Reserve System and bank whose deposits are insured by the Federal

Deposit Insurance Corporation;

(2) The term uncertificated security shall mean a security not

represented by an instrument and the transfer of which is registered

upon books maintained for that purpose by or on behalf of the issuer;

(3) The term global certificate securities issue shall mean a

securities issue for which a single master certificate representing the

entire issue is registered in the nominee name of a registered clearing

agency and for which beneficial owners cannot receive negotiable

securities certificates;

(4) The term customer shall mean any person with whom the reporting

institution has entered into at least one prior securities-related

transaction; and

(5) The term securities-related transaction shall mean a purpose,

sale or pledge of investment securities, or a custodial arrangement for

investment securities.

(6) The term securities certificate means any physical instrument

that represents or purports to represent ownership in a security that

was printed by or on behalf of the issuer thereof and shall include any

such instrument that is or was:

(i) Printed but not issued;

(ii) Issued and outstanding, including treasury securities;

(iii) Cancelled, which for this purpose means either or both of the

procedures set forth in Sec. 240.17Ad-19(a)(1); or

(iv) Counterfeit or reasonably believed to be counterfeit.

(7) The term issuer shall include an issuer's:

(i) Transfer agent(s), paying agent(s), tender agent(s), and

person(s) providing similar services; and

(ii) Corporate predecessor(s) and successor(s).

(8) The term missing shall include any securities certificate that:

(i) Cannot be located or accounted for, but is not believed to be

lost or stolen; or

(ii) A transfer agent claims or believes was destroyed in any manner

other than by the transfer agent's own certificate destruction

procedures as provided in Sec. 240.17Ad-19.

(b) Every reporting institution shall register with the Commission

or its designee in accordance with instructions issued by the Commission

except:

(1) A member of a national securities exchange who effects

securities transactions through the trading facilities of the exchange

and has not received or held customer securities within the last six

months;

(2) A reporting institution that, within the last six months,

limited its securities activities exclusively to uncertificated

securities, global securities issues or any securities issue for which

neither record nor beneficial owners can obtain a negotiable securities

certificate; or

(3) A reporting institution whose business activities, within the

last six months, did not involve the handling of securities

certificates.

(c) Reporting requirements--(1) Stolen securities.

(i) Every reporting institution shall report to the Commission or

its designee, and to a registered transfer agent for the issue, the

discovery of the theft or loss of any securities certificates where

there is substantial basis

[[Page 453]]

for believing that criminal activity was involved. Such report shall be

made within one business day of the discovery and, if the certificate

numbers of the securities cannot be ascertained at that time, they shall

be reported as soon thereafter as possible.

(ii) Every reporting institution shall promptly report to the

Federal Bureau of Investigation upon the discovery of the theft or loss

of any securities certificate where there is substantial basis for

believing that criminal activity was involved.

(2) Missing or lost securities. Every reporting institution shall

report to the Commission or its designee, and to a registered transfer

agent for the issue, the discovery of the loss of any securities

certificate where criminal actions are not suspected when the securities

certificate has been missing or lost for a period of two business days.

Such report shall be made within one business day of the end of such

period except that:

(i) Securities certificates lost, missing, or stolen while in

transit to customers, transfer agents, banks, brokers or dealers shall

be reported by the delivering institution by the later of two business

days after notice of non-receipt or as soon after such notice as the

certificate numbers of the securities can be ascertained.

(ii) Where a shipment of retired securities certificates is in

transit between any transfer agents, banks, brokers, dealers, or other

reporting institutions, with no affiliation existing between such

entities, and the delivering institution fails to receive notice of

receipt or non-receipt of the certificates, the delivering institution

shall act to determine the facts. In the event of non-delivery where the

certificates are not recovered by the delivering institution, the

delivering institution shall report the certificates as lost, stolen, or

missing to the Commission or its designee within a reasonable time under

the circumstances but in any event within twenty business days from the

date of shipment.

(iii) Securities certificates considered lost or missing as a result

of securities counts or verifications required by rule, regulation or

otherwise (e.g., dividend record date verification made as a result of

firm policy or internal audit function report) shall be reported by the

later of ten business days after completion of such securities count or

verification or as soon after such count or verification as the

certificate numbers of the securities can be ascertained.

(iv) Securities certificates not received during the completion of

delivery, deposit or withdrawal shall be reported in the following

manner:

(A) Where delivery of the securities certificates is through a

clearing agency, the delivering institution shall supply to the

receiving institution the certificate number of the security within two

business days from the date of request from the receiving institution.

The receiving institution shall report within one business day of

notification of the certificate number;

(B) Where the delivery of securities certificates is in person and

where the delivering institution has a receipt, the delivering

institution shall supply the receiving institution the certificate

numbers of the securities within two business days from the date of

request from the receiving institution. The receiving institution shall

report within one business day of notification of the certificate

number;

(C) Where the delivery of securities certificates is in person and

where the delivering institution has no receipt, the delivering

institution shall report within two business days of notification of

non-receipt by the receiving institution; or

(D) Where delivery of securities certificates is made by mail or via

draft, if payment is not received within ten business days, the

delivering institution shall confirm with the receiving institution the

failure to receive such delivery; if confirmation shows non-receipt, the

delivering institution shall report within two business days of such

confirmation.

(3) Counterfeit securities. Every reporting institution shall report

the discovery of any counterfeit securities certificate to the

Commission or its designee, to a registered transfer agent for the

issue, and to the Federal Bureau of Investigation within one business

day of such discovery.

[[Page 454]]

(4) Transfer agent reporting obligations. Every transfer agent shall

make the reports required above only if it receives notification of the

loss, theft or counterfeiting from a non-reporting institution or if it

receives notification other than on a Form X-17F-1A or if the

certificate was in its possession at the time of the loss.

(5) Recovery. Every reporting institution that originally reported a

lost, missing or stolen securities certificate pursuant to this Section

shall report recovery of that securities certificate to the Commission

or its designee and to a registered transfer agent for the issue within

one business day of such recovery or finding. Every reporting

institution that originally made a report in which criminality was

indicated also shall notify the Federal Bureau of Investigation that the

securities certificate has been recovered.

(6) Information to be reported. All reports made pursuant to this

Section shall include, if applicable or available, the following

information with respect to each securities certificate:

(i) Issuer;

(ii) Type of security and series;

(iii) Date of issue;

(iv) Maturity date;

(v) Denomination;

(vi) Interest rate;

(vii) Certificate number, including alphabetical prefix or suffix;

(viii) Name in which registered;

(ix) Distinguishing characteristics, if counterfeit;

(x) Date of discovery of loss or recovery;

(xi) CUSIP number;

(xii) Financial Industry Numbering System (``FINS'') Number; and

(xiii) Type of loss.

(7) Forms. Reporting institutions shall make all reports to the

Commission or its designee and to a registered transfer agent for the

issue pursuant to this section on Form X-17F-1A. Reporting institutions

shall make reports to the Federal Bureau of Investigation pursuant to

this Section on Form X-17F-1A, unless the reporting institution is a

member of the Federal Reserve System or a bank whose deposits are

insured by the Federal Deposit Insurance Corporation, in which case

reports may be made on the form required by the institution's

appropriate regulatory agency for reports to the Federal Bureau of

Investigation.

(d) Required inquiries. (1) Every reporting institution (except a

reporting institution that, acting in its capacity as transfer agent,

paying agent, exchange agent or tender agent for an equity issue, or

registrar for a bond or other debt issue, compares all transactions

against a shareholder or bondholder list and a current list of stop

transfers) shall inquire of the Commission or its designee with respect

to every securities certificate which comes into its possession or

keeping, whether by pledge, transfer or otherwise, to ascertain whether

such securities certificate has been reported as missing, lost,

counterfeit or stolen, unless:

(i) The securities certificate is received directly from the issuer

or issuing agent at issuance;

(ii) The securities certificate is received from another reporting

institution or from a Federal Reserve Bank or Branch;

(iii) The securities certificate is received from a customer of the

reporting institution; and

(A) Is registered in the name of such customer or its nominee; or

(B) Was previously sold to such customer, as verified by the

internal records of the reporting institution;

(iv) The securities certificate is received as part of a transaction

which has an aggregate face value of $10,000 or less in the case of

bonds, or market value of $10,000 or less in the case of stocks; or

(v) The securities certificate is received directly from a drop

which is affiliated with a reporting institution for the purposes of

receiving or delivering certificates on behalf of the reporting

institution.

(2) Form of inquiry. Inquiries shall be made in such manner as

prescribed by the Commission or its designee.

(3) A reporting institution shall make required inquiries by the end

of the fifth business day after a securities certificate comes into its

possession or keeping, provided that such inquiries shall be made before

the certificate is sold, used as collateral, or sent to another

reporting institution.

[[Page 455]]

(e) Permissive reports and inquiries. Every reporting insitution may

report to or inquire of the Commission or its designee with respect to

any securities certificate not otherwise required by this section to be

the subject of a report or inquiry. The Commission on written request or

upon its own motion may permit reports to and inquiries of the system by

any other person or entity upon such terms and conditions as it deems

appropriate and necessary in the public interest and for the protection

of investors.

(f) Exemptions. The following types of securities are not subject to

paragraphs (c) and (d) of this section:

(1) Security issues not assigned CUSIP numbers;

(2) Bond coupons;

(3) Uncertificated securities;

(4) Global securities issues; and

(5) Any securities issue for which neither record nor beneficial

owners can obtain a negotiable securities certificates.

(g) Recordkeeping. Every reporting institution shall maintain and

preserve in an easily accessible place for three years copies of all

Forms X-17F-1A filed pursuant to this section, all agreements between

reporting institutions regarding registration or other aspects of this

section, and all confirmations or other information received from the

Commission or its designee as a result of inquiry.

(Secs. 2, 17, and 23, 15 U.S.C. 78b, 78q, 78w)

[44 FR 31503, May 31, 1979; 45 FR 14022, Mar. 3, 1980, as amended at 53

FR 37289, Sept. 26, 1988; 53 FR 40721, Oct. 18, 1988; 68 FR 74400, Dec.

23, 2003]