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Since 1977, Securities Information Center (SIC®) has been operating the Securities and Exchange Commission's Lost and Stolen Securities Program. This unique relationship, which combines government regulation with private enterprise, ensures efficiency of operation and total focus on the needs of all firms that deal with physical securities.
Under SEC Rule 17f-1, you must report any missing, stolen, lost, or counterfeit securities to SIC®. You generally need to check with us on the status of securities handled in transactions with an aggregate value greater than $10,000 in denomination or market value.
To file reports or make inquiries on securities with SIC®, inquirers must first obtain a FINS number from DTCC, and then register with SIC®. For more detailed information on the SIC® registration procedure, inquiry methods, and information on costs, or to receive a complete copy of SEC Rule 17f-1, please contact the center.
Summary of Rule 240.17f-1: Requirements for reporting and inquiring with respect to missing, lost, counterfeit or stolen securities.
When investors holding their own securities discover they have been lost, stolen or destroyed, their broker should immediately be notified in writing. The broker will complete a Securities and Exchange Commission (SEC) form, known as X-17f-1A, for "Missing/Lost/Stolen/Counterfeit", notifying the Securities Information Center (SIC®) and the transfer agent the securities are missing. The investor should receive a copy of the form from the broker; the copy should be kept in a safe place until the certificate is found or reissued.
SIC® maintains a central database which receives and processes reports and inquiries about missing and stolen securities. It was established by the SEC in 1977 to reduce trafficking in lost, stolen and counterfeit securities. A transfer agent, usually a bank, is the organization appointed by a corporation or other issuer to maintain the names of registered stockholders and the number of shares owned. They are ultimately responsible for reissuing certificates. If an investor doesn’t have a broker, a lost or stolen securities report can be filed directly with the transfer agent responsible for the certificate. The name of the transfer agent is usually included in annual and interim reports from a corporation.
All brokerages, firms and banks are encouraged by regulators to contact the SIC® database before completing a transaction. However, a firm or bank isn’t required to check with the SIC® unless the market value of the transaction is more than $10,000. Nevertheless, most institutions do check to avoid incurring possible losses for themselves and their customers.
When an inquiry into SIC® matches a lost, stolen or counterfeit security, commonly referred to as a "hit", the data bank provides the inquiring financial institution with the name, address and telephone number of the institution which originally reported the loss. The institution reporting the loss is also notified, as is the Federal Bureau of Investigation if the report suggests criminality were involved.
Before a security is reissued, the investor usually is required to purchase a surety or indemnity bond. That "bond" essentially is an insurance policy to protect the issuer and potential buyers in case the "lost" security is redeemed or sold. Once reported and the necessary "bond" acquired, the investor will receive from the broker or insurance agent an affidavit of loss which must be filled out, notarized and returned.
The cost of a surety bond is usually 2 percent to 4 percent of the market value of the stock or the bond, minus any bond coupon payments already made. Thus a certificate with a market value of $10,000 could cost about $300 to replace.
Replacements of a certificate usually take two weeks to four months, depending on verification and other requirements. During this time the security can not be sold.
SIC® is a registered service mark used herein under license.