Recently, The Optimizer had an opportunity to sit down with Jay McHale, President of Computershare’s US Equity Services, to talk about his perspective on the securities industry.
Let’s jump right in, Jay. What do you think are the biggest challenges facing issuers today?
That’s a great question. Computershare is fortunate to work with a diverse group of issuer clients, operating in virtually every industry and market, and ranging from new IPOs and emerging micro-caps to the largest public companies in the US. Despite this diversity, our clients share many of the same corporate objectives and concerns.
The top business challenges our clients cite are amazingly consistent: growing their company in the current economic environment and controlling costs across the board.
As far as some key concerns we come across regularly: issuers are focused on data security, regulatory compliance, especially in the area of unclaimed property, and getting things done despite an ever-tightening budget. Of course, issuers are always focused on quality products and services, and like to know that we are taking good care of their shareholders.
It’s not surprising that data security is a priority.
No, not surprising at all. Data security and privacy breaches are in the news every day. Issuers want to know that their records are secure. We take it very seriously, and we’re not alone.
The SEC hosted a roundtable on cybersecurity earlier this year and it’s a major concern across the financial markets. Consider the recent approval of Reg SCI. While the current SEC transfer agent rules do not include data security, disaster recovery and business continuity standards, issuers want to know these measures are in place at their transfer agent.
To ensure our clients’ shareholder data is safe, Computershare maintains a secure, proprietary data center along with a secondary site and fully redundant critical systems. If something should happen to one of the sites, the others can handle the full capacity without interruption. We also have strong physical security controls – including security guards, restricted access, secured emergency exits, video surveillance and restricted access computer rooms. The effort we put into security is a reflection of its importance to our issuers.
As our programs and controls are designed to meet or exceed the standards of our most demanding clients, each of our issuers can rest easier, knowing they have world-class data security protecting their shareholder data.
You mentioned unclaimed property. That area is changing so fast, laws may have changed in the time it takes someone to read this interview!
You could be right! Unclaimed property is one of the really challenging areas, as none of us want a shareholder to lose their property inadvertently.
Computershare puts a lot of resources into tracking state laws, interpretations and changes. We regularly implement new practices for our clients that maximize the ability for them to maintain contact with their shareholders to avoid shareholder assets being escheated.
We are also one of the only transfer agents to offer a complete suite of full-service, inhouse solutions for asset reunification. Programs like our post-merger cleanup and shareholder cleanup services through Georgeson, as well as the pre-escheat services we perform to augment standard due diligence, help our clients minimize potential abandoned property issues for their shareholders.
For issuers with only a small number of shareholders from just a few states, escheatment may not be much of a concern. However, for larger companies with thousands of shareholders spread across the US, it can be a nightmare. Each state has its own laws and even simple things, such as what constitutes “contact,” varies state-to-state and is subject to changing interpretation.
That’s why Computershare is participating in the Uniform Law Commission initiative to update the Uniform Unclaimed Property Act. We hope this effort leads to a more streamlined process across the states, as well as better protection for shareholders. But that’s a long-term proposition, and in the meantime, I honestly don’t know how companies can stay on top of it without a good agent.
You’ve mentioned your clients’ need to get things done, even as budgets are tightening. What have you observed?
It’s obvious that our clients have more on their plates than ever, with wide spans of responsibility and limited resources. The
size of their company doesn’t matter; it’s across the board. I think we’ve all experienced this in our professional lives, having more and more to do, over time, especially following reorganizations, expense control initiatives and mergers or acquisitions.
Bottom line is that our clients need to operate as efficiently and effectively as possible. This is why we have dedicated and experienced relationship managers who are actively engaged with their clients and can suggest solutions, alternatives, and best practices. If an issuer wants to drive up the registered voting percentage, cut costs associated with annual meeting, or find a more efficient way to manage restricted stock, they know we’re ready to partner with them.
Issuers appreciate the opportunity to network with their peers and our senior management team at our client conferences and regional events in order to share best practices and exchange ideas. It’s our goal that people return to their office with some new tips and tricks they can use to get ahead.
We regularly publish important industry news and helpful information for issuers on our Insights web page at www.computershare.com/Insights. And earlier this year, we sent a small collection of tips to all our issuers based upon information we’d pulled together from various sources. It was fun and light-hearted, but had some great ideas in it. Your readers can check it out at www.computershare-na.com/ tipsheet. We’re truly looking for every way we can help our corporate clients and the great people we work with succeed.
You’ve just brought on board the clients from your recent acquisition of Registrar and Transfer Company. What’s the feedback been from the R&T clients?
We’ve been delighted with the response of the clients who recently joined us through the R&T acquisition. They have expressed a lot of excitement about the additional value we are able to provide, and the additional products and services easily available to them. For instance, our web capabilities for issuers and shareholders exceed anything they’ve used before. Shareholders are now able to take advantage of our advanced automated telephone system, providing access to their accounts on nights and weekends or whenever they need it. And our paperless processing environment and advanced customer service tools have impressed the clients who have toured our Operations.
Closing thoughts
For issuers, success comes down to having the right partner; a partner you can trust. Computershare has been in this business for a long time; it’s core to what we do. Every year we invest a significant amount of revenue back into the business to ensure our products and services are serving the needs of our clients and their shareholders. For example, we’ll be launching some new, exciting tax functionality for shareholders in the first quarter of 2015. Stay tuned.
Across the board, we’re committed to being the best: offering the right products for our clients, delivering valuable services, being a responsive partner. We’re looking forward to building strong relationships with our new clients while continuing to earn our clients’ loyalty by working hard every day to service them.
And for your readers: I invite you to reach out to any one of Computershare’s current clients to learn more about us. Feel free to
contact me directly as well at jay.mchale@computershare.com if I can answer any questions. I hope you have a safe and happy new year.
Jay McHale
President, Computershare
www.computershare.com
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