Share Transfer Agencies
What is a share transfer agent license?
“share transfer agent” means –
(a) a person who, on behalf of an issuer –
(i) creates and maintains the records of holders of securities issued by an issuer;
(ii) deals with all matters connected with the transfer, issue, cancellation and redemption of its securities;
(iii) safeguards securities and funds; and
(iv) distributes dividends; or
(b) a department or division, by whatever name called, of a listed company performing the activities referred to in paragraph (a), if at any time the total number of the holders of the company’s securities exceed a prescribed amount;
Share Transfer Agencies
A Share Transfer Agency (STA) is an entity that manages the record-keeping and administrative functions related to the transfer and registration of securities (typically shares) on behalf of listed or public companies. These entities play a crucial role in Zambia’s capital market by ensuring accurate and secure shareholder records.
Functions of a Share Transfer Agency
A licensed STA typically handles the following:
- Maintaining shareholder registers
- Handling share allotments and certificates
- Disbursing dividends
- Liaising with the securities exchange (LuSE) and central depository (CDSC)
1.0 Submission of application
1.1 All licenses issued by the Commission are granted perpetually and does not require renewal.
2.1 An applicant for a SEC license is required to complete and submit a duly executed application form, along with other supporting documentation as well as the prescribed application fee. The documents are submitted to the Commission.
2.2.1 Before accepting the application, a SEC officer will review the application against the prescribed checklist for each license. The foregoing aims to confirm that the application is complete.
2.2.2 The application is considered to be complete if all requirements as per the checklist have been submitted. Below is the checklist:
2.2.3 If an application is not complete, the applicant is advised to re-submit it once the missing information is included. Upon resubmission, another checklist verification will be performed.
2.2.4 Upon accepting the application form, the SEC finance office will immediately issue a receipt, a copy of which will be given to the customer whilst another copy will be sent to PA-DMSD for filling on the appropriate client file.
2.2.5 If no payment or proof of payment is provided, the application will not be accepted.
3.1 The following administrative tasks are undertaken once an application has been accepted by a SEC officer.
3.1.1 Application documents are forwarded to PA – CEO for mail register formalities.
3.1.2 PA-DMSD enters application in a Licence Log Book and forwards it to the Surveillance Officer, Inspector or Manager-Supervision for scrutiny and processing.
2.1 License processing involves the following activities:
- Review of documentation by Manager – Market Supervision to ensure suitability and qualifications of applicant including fit and proper requirements review. Specific matters reviewed are included in the document below:
- Background checks on applicants. This includes Security wings vetting and other regulators.
2.2 Reference/query letters or emails are sent out within 5 working days of SEC accepting application.
2.3 For bodies corporate, background checks will include obtaining confirmation from PACRA of the company’s registration, that of its shareholders and further background checks on individuals behind the ownership of applicant and associated entities.
2.4 Applicants are given 7 working days within which to respond to queries, and failure to which without providing any reasons may entail termination of processing. The applicant is informed in writing about the termination of processing.
2.5 Draft Licencing Committee (LC) Summaries are prepared and submitted together with applicants file to DMSD for review and authorisation to present at next Licensing Committee meeting.
2.6 The LC summary must contain the following information:
1) Background of applicant
- Name of applicant
- Address
- Principal Business
- Board of directors
- Shareholders and percentage shareholding
2) Compliance assessment of applicant. This includes but is not limited to the following aspects
- Compliance with Securities Rules and the Act
- Instances and nature of non compliance
- Disciplinary action against applicant by SEC or other regulators
- Significant inspection findings.
3) Conclusion/ Recommendation
Licenses will be presented to the LC with the following recommendations
a) Granted without special conditions
b)Granted subject to specific conditions as DMSD deems necessary.
2.7 All conditions attached to the license must be time bound to enable the Commission undertake regular status updates.
3.1 The Licence Committee (LC) meetings are held at least once every quarter. The summaries are presented to the Committee for their consideration and recommendation to the Board.
3.2 The Licence Committee decision may be:
(a) Grant without special conditions
(b) Grant with specific conditions.
(c) Refusal to grant
3.3 The LC may also issue additional directives in relation to specific applications prior to submission to the Board of Commissioners. The LC Chairperson includes in the LC report to the Board details of all licenses granted by the LC, as well as applications where the LC has refused to grant a license, along with its reasons for refusal, for the Board to decide whether to uphold the LC’s decision or grant the license
3.4 License applications are considered as a separate agenda item in the board meeting. The Commission will approve licenses as follows:
(a) Grant without special conditions
(b) Grant with specific conditions.
4.1 Once licenses are approved by the LC, DMSD prepares & submits Licence for signature within 5 working days following Board meeting.
4.2 Once signed, the licenses are distributed to the applicants/ licensees together with a covering letter.
4.3 If approved subject to, DMSD follows up outstanding issue(s) immediately in writing clearly stating the board’s decision and action required from the applicant.
4.4 If an application is not approved, DMSD writes to applicant within 5 working days following the Board meeting.
4.5 All correspondences relating to the application must be placed on the applicants file
4.6 Both (4.3) and (4.4) must be done following the procedures in Section 25 of the Act. DMSD will notify the applicant of the LC’s intention not to grant or attach conditions, specifying a time period in which to the applicant must respond. The applicant’s response will be assessed by the LC and its decision communicated to the applicant. Where there is no response from the applicant, the LC’s decision will be implemented by management and the client informed in writing.
4.7 Details of approved licenses will be entered in the License Database to ensure information is up to date.
1) Due to the sensitive and important nature of licensing it is important the the administration of the licensing process reflects the above procedures.
2) Copies of licences must be filed on each licensee’s file. When despatching the licenses, the licensee must acknowledge receipt of the license by stamping the Commission copy of the covering letter and signing in the License Delivery Register.
3) A license register of deliveries made will be maintained and completed for each round of license deliveries.
4) All email correspondence to and from the licensee in connection with their application, must be printed and kept on their file
Report Concerns
To report any instances of misconduct or to raise any questions or concerns you may have regarding credit rating, please follow the appropriate channels to ensure your voice is heard and addressed accordingly.