During the past few years there have been increasing efforts on the part of a number of organized groups to establish statutory definitions of the responsibilities of corporations and their transfer agents in the transfer of stock. Among these groups are the Commission on Uniform State Laws, which sponsored the Uniform Fiduciaries Act, the American Law Institute and the National Conference of Commissioners on Uniform State Laws, which have jointly produced the new Uniform Commercial Code, the Committee on Simplification of Security Transfers of the Real Property, Probate and Trust Law Section of the American Bar Association, of which Committee I am a member, the Trust Division of the American Bankers Association, the New York Stock Transfer Association, some stock exchanges, and special committees representing a number of local bar associations. The efforts in this direction stem largely from the annoyance that is often caused by the rules laid down by transfer agents to govern transfers of stock other than normal transfers by individuals in their own right. These transfers are generally called "fiduciary transfers."

Most transfer agents (and when I speak of "transfer agents" I include both professional transfer agents and corporations which transfer their own stock) have taken little part and have displayed little interest in this movement. There are a number of reasons for this. One is that the practice of transferring stock has been well developed over the years and the transfer clerks have been thoroughly trained to follow such practice. Another reason is that the Rules of the New York Stock Transfer Association, the membership of which includes the large banks and corporations all over the country and Canada, have become so well established and recognized that they have almost the force of law. A third reason is that most of the so-called "exoneration statutes" adopted or proposed to date are so badly conceived, and present so many problems, that they offer danger rather than safety to the transfer agents. A further reason is that many transfer agents now carry insurance protecting them against claims arising from improper transfers of stock, so that they are not vitally interested in securing statutory protection. They are, of course, interested from a public relations standpoint in simplifying the transfer of stock, but no one has yet devised a method whereby they can do this with propriety and safety. They cannot just ignore the usual requirements in the case of fiduciary transfers and rely on their insurance, as the insurance companies expect them to use the degree of care established by law in making transfers.