Requiring a financial institution to provide a designated third party access to its entire imaging system, as if the third party were the system administrator, would compromise the confidentiality of the transfer agent s records and system, and put the transfer agent and its system at risk. Such a condition is unacceptable to Chase and is more likely to create than solve problems. Response to General Request for Comments. It is true that any electronic storage media system used by a transfer agent must be capable of recording and reproducing a full and complete legible facsimile of each recorded image. However, Chase is unaware of any system that can ensure image quality automatically.
Manual review is required to ensure image quality is acceptable.
A review should be performed at the time the record is scanned and the image created. Additionally, quality assurance checks, such as at the time of indexing, should also be part of the procedure to verify image quality. Therefore, the Rule should only require that the transfer agent have in place quality assurance procedures that will provide reasonable assurance that the recorded image will produce a legible facsimile of the recorded document or instrument. Destruction of Canceled Securities Certificates. We believe that transfer agents should be permitted to destroy canceled securities certificates after they have been imaged, provided the transfer agent has written quality assurance procedures and practices in place as described above, and a periodic audit should be required of those procedures and practices.