SIE (Securities Industry Essentials) Practice Exam

What is the primary distinction between a transfer agent and a registrar for a publicly-traded corporation?

1. Transfer agent ensures dividend payments to owners

2. Registrar manages shareholder records

3. Transfer agent manages stock splits

4. Registrar ensures company compliance with regulations

The correct answer is: Transfer agent ensures dividend payments to owners

A transfer agent is responsible for maintaining records of stock transfers and ensuring that dividend payments are made accurately and on time to the owners of a publicly-traded corporation. While a registrar also manages shareholder records, their primary responsibility is to ensure that the company is compliant with regulations and requirements set by governing bodies, such as the Securities and Exchange Commission (SEC). Additionally, a transfer agent is responsible for managing stock splits, which involve dividing a company's existing shares into multiple shares. Therefore, B, C, and D are incorrect as they do not accurately describe the primary role of a transfer agent.