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Banking Interpretations

NYSBL 100 & 131(3)

July 25, 2008 


Dear [---]:

This responds to your letter of May 14, 2008 to Deputy Superintendent and Counsel Marjorie Gross on behalf of your client, [---] a New York business corporation. That letter enquired whether [---] could conduct certain activities without obtaining the powers of a trust company under the New York Banking Law (the "NYBL"). You indicated that in furtherance of such activities, [---] had already registered as a "transfer agent" with the Securities and Exchange Commission ("SEC").

You have advised that [---] proposes to act in New York as a depository for unsponsored ADR programs. In this regard:

Section 100.1 of the NYBL grants a New York-chartered trust company or bank with fiduciary powers the power:

To act as the fiscal or transfer agent of... any corporation; and in such capacity to receive and disburse money, to transfer, register and countersign certificates of stock, bonds or other evidences of indebtedness or other securities ....

Section 131.3 of the NYBL provides in relevant part that:

no corporation other than a trust company shall have or exercise in this state any of the powers specified in [Section 100.1 of the NYBL] ....

Although [---] acknowledges that its proposed activity would cause it to be a transfer agent as defined in the Securities Exchange Act, [---] represents that it will not be a transfer agent within the meaning of Section 100.1 of the NYBL because it will not be acting in a fiduciary capacity:

This Department has long taken the view that the prohibition of Section 131.3 of the NYBL applies only to a corporation that is acting in a fiduciary capacity and not one that is exercising only ministerial functions. Accordingly, this Department concurs that [---] would not be acting as a fiduciary and would not be subject to the prohibition of Section 131.3, provided that the activities of [---] were limited as described above.

The foregoing conclusions are based on the representations made in your letter of May 14, 2008 and on the terms of the Depository Receipt that you provided to supplement such letter. Moreover, the views expressed in this letter relate solely to the application of the NYBL. This Department takes no view on the application of other laws or regulations including, without limitation, the securities laws.

We hope that this letter is helpful.

Very truly yours,

John B. Sullivan
Assistant Counsel

Department of Financial Services


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