SEC Orders Firms to Track Down Missing Investors for Free
Published Date: 6/30/2025
Notice
Summary
The SEC wants to keep a rule that makes certain financial companies search for lost investors’ addresses and notify missing payees, all free of charge. About 3,500 companies spend lots of time and money—over 228,000 hours and $6.6 million yearly—doing these searches and keeping records for at least three years. The SEC is asking for public feedback before extending this rule to keep investors connected and protected.
Analyzed Economic Effects
3 provisions identified: 2 benefits, 1 costs, 0 mixed.
Recordkeeping and Compliance Costs
Covered entities must keep records relating to the searches and notifications for not less than three years and comply with mandatory recordkeeping. The SEC estimates an aggregate annual burden of about 228,694 hours and aggregate annual costs of approximately $6,617,298, primarily payments to third-party database providers.
Free Searches for Lost Investors
The rule requires certain transfer agents and broker-dealers to run two address searches for lost securityholders using an information database at no charge to the lost securityholders. The Commission estimates the rule applies to about 489 broker-dealers and transfer agents and results in 183,813 hours per year for searches.
Paying Agents Must Notify Lost Payees
Paying agents are required to attempt to notify lost payees at least once, which the SEC estimates imposes about 38,913 hours annually for paying-agent notifications. This requires paying agents (including carrying firms, indenture trustees, and custodians) to make at least one notification attempt to missing payees.
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