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SSA and STA Request Mail Disruption Relief

Tuesday, September 8, 2020  
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Recent disruptions to mail delivery services raise great concerns for the securities industry. In a Sept. 2, 2020, letter to the National Association of Unclaimed Property Administrators, the Shareholder Services Association and Securities Transfer Association outlined the challenges presented not only by the recent COVID-19 pandemic disruption but by other events, such as natural disasters, that have periodically affected due diligence and reporting mailings. The organizations requested that the NAUPA board take action to help the states and property holders when these unplanned scenarios arise.

SSA and SST explained that, mail disruptions increase the risk of states liquidating escheated property without the owners receiving due diligence letters previously mailed by holders. This not only harms the property owner, but also opens the states, issuers and transfer agents to claims and litigation for large market losses.  

“If due diligence is not possible, there should be a means to delay potential escheatment and shares should not be reported and remitted/delivered until after a successful mailing can occur,” the organizations wrote.

SSA and STA requested that the NAUPA board consider a resolution specifying that when state-required due diligence cannot be performed due to mail disruptions, it is permissible for the owner’s property to be held until the next reporting cycle. Assuming any restrictions are no longer in place at the next annual reporting period, the state-required due diligence would be performed in the normal course of the next reporting cycle. If the property is then not claimed by the owner, it would be reported and remitted/delivered to the appropriate jurisdiction.

View the letter.