SSA and STA Seek Relief from International Mail Disruption
Monday, May 11, 2020
As a result of the COVID-19 pandemic, the U.S. Postal Service has placed restrictions and prohibitions on mail to 116 countries. In a May 8, 2020, letter to the National Association of Unclaimed Property Administrators, the Shareholder Services Association and Securities Transfer Association explained the challenges this disruption has caused for the securities industry and requested relief.
SSA and STA discussed three significant challenges:
- All states liquidate securities, some immediately upon receipt. Due diligence efforts require notice of pending escheatment and likely liquidation. Failure to conduct due diligence puts shareholders, states, issuers and transfer agents at risk.
- Two of the most common forms of owner activity keeping accounts active are annual meeting votes and evidence of dividend checks. Both of these rely on mail, and without them many accounts are at risk of being improperly marked as inactive through no fault of the shareholders.
- Returned mail can result in accounts being coded as lost, which triggers escheatment in many states. Under current conditions, international mail may be returned as a result of delivery restrictions, rather than attempted delivery to a bad address. This will likely result in accounts being improperly escheated.
To protect shareholders’ property interests, SSA and STA requested the states’ agreement that no accounts be escheated for shareholders whose addresses in countries affected by the mail restrictions until such restrictions are lifted and one mailing to the owner has been successful. The associations also requested that returned mail resulting from a service suspension not be considered lost. Finally, they asked states to waive interest and penalties for any property that is considered late due to the international mail issues.
Read the joint letter from SSA and STA.