Q: Will the TAD system be expensive? A: The TAD system would cost far less than the proposed depository or the machine-readable alternative, although machinereadable documents could be used within the TAD system. Most major transfer agents and brokers now own or lease the essential data-processing hardware. The only new costs associated with the Transfer Agent Depository are programming costs. These costs would be far outweighed by the potential benefits. Q: How long will it take to implement TAD? A: We feel that a realistic time frame for development and implementation of the system would not exceed 24 months. Q: What about reliability? A: The equipment for a TAD system is in use and has been found to be extremely reliable. The controls would be much the same as they are under the current system from the transfer agents' point of view. The broker would have "to know his customers" or verify the customer's holdings with the transfer agent prior to accepting a sell order. The Transfer Agent Depository is the system least likely to be affected by equipment failure, i.e., computer down-time because transfer agents are not all physically located in one area. The equipment failure affecting any one agent would not affect another in any significant way. Q: Can TAD be implemented without unduly disrupting the normal flow of business? A: The TAD system will not be implemented by the immediate, total abolition of the certificate, but rather by issuing statements instead of certificates. This would be done gradually, i.e., much in the same manner as the Federal Reserve's bookkeeping entry system. It is assumed that certificates would be deposited with transfer agents on a gradual basis. As a result, there should be little or no flow disruption in the offices of broker-dealers or exchanges. Q: Doesn't the implementation of TAD call for a high degree of coordination? A: Yes, indeed it does. It will demand the coordinated efforts of all segments of the financial world to insure uniform procedures. Q: To what extent would the development of a TAD system further the implementation of uniform procedures of accounting? A: A TAD system would require uniform accounting methods, especially by the various clearing houses and the brokerage industry. It would eliminate a number of bookkeeping methods now employed and require uniform procedures of accounting. Q: How may the public be informed as to the benefits of a certificateless system in order to obtain the necessary public acceptance? A: The public could be informed as to the benefits of a certificateless society through direct mailings by transfer agents to shareholders, much in the same way as Dividend Reinvestment Programs have been introduced. Answers to questions most commonly posed about TAD |