STA Newsletter Dec03 06

STA Annual Meeting Summary:

What can be done if a shareholder can’t get a medallion guarantee?

This is a question that was asked during the operations open forum session at the recent STA Annual Meeting. It is not an unusual problem. A shareholder lives overseas and doesn’t have access to a U.S. broker or is a small rural domestic investor with the same plight. Some companies encounter this problem more frequently than others, because many of their employees or former employees are stockholders and they have large operations based abroad. In the past, other than getting a signature guarantee from the issuer, there was no alternative open to these shareholders when it came time to sell or transfer their stock. Well now there is. Through the efforts of the STA and E-Surety, the STA sponsoring insurance broker, transfer agents can offer the Waiver of Signature Guarantee Insurance Program.

The Waiver of Signature Guarantee Insurance Program can be used when the registered shareholder is unable to obtain a Medallion Signature Guarantee acceptable to the STA member transfer agent. The program is available through E-Surety Brokerage, Inc. in conjunction with First City Resources, Ltd., the Lloyd’s broker.

What are the Benefits of the program?

The program gives transfer agents and shareholders numerous benefits, including:

• The ability to transfer certificated securities, up to a market value of $100,000 (market value at time of transfer), without a Medallion Guarantee.
• If a loss occurs, there is no maximum limit on the coverage. The loss claim could be greater or less than the market value at the time of wrongful transfer. (Similar to an open penalty LIB claim.)
• The insurance runs to the transfer agent and the issuer.
• Customer checks are payable to the transfer agent.
• The program provides a convenient end-of-the-month activity reporting by the transfer agent. The transfer agent reports aggregated activity and forwards a single premium payment for all of the transfers under the program during the prior month.
• Transfer agents can charge a processing fee that can be added to the premium.
• And, most important, the claims process is simple.

And now for the good news: The premiums for the Waiver of Signature Guarantee Program are quite reasonable:

Market Value: Premium:

$1 – 10,000. $35.

$10,000 - 25,000. $75.

$25,000 - 50,000. $125.

$50,000 - 100,000. $200.

We think you will agree that this program allows the disenfranchised shareowner a quick and easy means of transferring certificated securities when a Medallion Guarantee is unavailable. Information about the program can be obtained by calling E-Surety at (239) 403-7244 (tel.), (239) 403-9274 (fax), or by E-mail at waiverins@e-surety.com.