U.S. Securities and Exchange Commission (SEC)

immediately, and before an innocent purchaser acquires the certificate¹

by the deadlines in the notice; failure to file on time may result in loss of all or part of the claim²

Securities registered transfer on death (TOD) pass directly to the named person or entity at the owner's death without probate, and the executor or administrator does not have to act. The beneficiary still re-registers them with the transfer agent.³

State law, not federal law, governs how securities may be registered, and each brokerage firm decides whether it offers TOD registration at all.³

Securities held in a brokerage account are handled by the firm under its own estate procedures. Securities in direct registration or physical certificate form are re-registered through the issuer's transfer agent.⁴

A stop transfer keeps a missing certificate's ownership from being moved out of the deceased owner's name. Before issuing a replacement, issuers usually require an affidavit of the facts of the loss and an indemnity bond costing about two or three percent of its current market value.^{1, 5}

The broker, bank or transfer agent that places a stop transfer reports the certificate to the SEC's Lost and Stolen Securities Program. If the certificate turns up later, tell whoever placed the stop transfer so the report can be removed.^{1, 5}

Congress directed the SEC to set up the Lost and Stolen Securities Program to curtail trafficking in lost, stolen, missing and counterfeit certificates. Exchange Act Rule 17f-1 governs it, and the SEC's designee runs its database under a contract and answers inquiries.^{6, 7}

Exchanges, banks, brokers, clearing agencies and transfer agents must report certificates they find lost, stolen, missing or counterfeit, and inquire about any certificate valued at more than $10,000 in their keeping. A matching inquiry returns a "hit" warning that it is not eligible for transfer.^{6, 7}

A brokerage firm can be asked whether it has a record of ownership, though firms must keep records for only six years and confirmations for three. If the company cannot be found, its state of incorporation keeps corporate records through the secretary of state or corporate division.⁸

States require brokerage firms and transfer agents to turn over accounts abandoned for a period set by state law, often around five years. A claim is filed with the state that escheated the account, with information verifying ownership.⁹

States generally return only the account's cash value on the date of escheatment, without later dividends or interest; the securities are usually sold. Some states set a time limit for claims, which are usually straightforward, so think carefully before paying anyone to handle one.⁹

Nothing is filed with the SEC when a securities owner dies: it keeps no ownership records and does not re-register securities. The executor, administrator or TOD beneficiary notifies the brokerage firm or the issuer's transfer agent.³

A transfer agent works for the issuer to record ownership changes, keep security holder records, cancel and issue certificates and distribute dividends. It is usually a bank or trust company, sometimes the company itself, and is registered with the SEC or, for a bank, a bank regulatory agency.⁴

Re-registration paperwork, and whether a signature must be guaranteed, is set by the brokerage firm or transfer agent and by state law, not by the SEC. The firm or transfer agent handling the re-registration also sets its timing.³

SIPC is not the SEC: it was "created under the Securities Investor Protection Act as a non-profit membership corporation" and "is not an agency or establishment of the United States Government." It has no authority to investigate or regulate its members.^{11, 12}

The SEC "cannot act as an investor's attorney or personal representative," cannot tell you what investments to make, and "cannot act on behalf of a party (such as individual investors) in any arbitration proceeding."^{16, 17}

Whether an executor may sell securities from the estate is for the brokerage firm or transfer agent and state probate law; the SEC sets no rule on it and holds no authority over the account. The firm says what proof of authority it needs before it accepts instructions.³

A transfer agent will not accept transfer instructions on certificated securities without a Medallion signature guarantee. The programs are STAMP, with more than 7,000 U.S. and Canadian institutions; SEMP, for regional stock exchange member firms and clearing and trust companies; and MSP, for NYSE member firms.¹⁰

A SIPC claim arises only in a liquidation. Claim forms are posted on the court-appointed trustee's website and mailed to each customer who had an account with the firm within the previous 12 months.²

SIPC steps in only when a member brokerage firm fails, protecting the securities and cash in an account up to $500,000, including up to $250,000 for cash. It protects stocks, bonds, Treasury securities, certificates of deposit, mutual funds and money market mutual funds.^{13, 14}

SIPC does not protect market losses, worthless securities sold to a customer, or losses from bad investment advice, and it is not the securities equivalent of FDIC deposit insurance.¹³

A customer with accounts in separate capacities is a different customer in each, and SIPC lists "an account held by an executor for an estate" as one. An estate account carries its own limit of $500,000, including $250,000 for cash.^{15, 14}

The SEC's Office of Investor Education and Assistance takes complaints against brokers, brokerage firms, investment advisers, transfer agents and mutual funds, including about opening, transferring or closing an account. Documents can be emailed, faxed or mailed; send copies, not originals.¹⁶

With consent, the SEC typically forwards a complaint to the firm for a written response, or refers it to its Division of Enforcement, whose investigations are confidential. Other routes are the courts, arbitration or mediation, including a law school clinic for someone who cannot afford a lawyer.¹⁶

Suspected securities fraud is reported through the SEC's Tips, Complaints and Referrals (TCR) portal.¹⁶

Protects the customers of its over 3,200 member brokerage firms when a member firm fails¹¹

Publishes free guidance at Investor.gov on transferring assets, finding a transfer agent, Medallion signature guarantees, lost or stolen certificates and escheatment, and takes investor complaints. Complaints go in by the online form, email, fax or letter.¹⁶

Who qualifies: Any investor, heir, or executor