What if you didn’t have to wait days for trades to clear, pay exorbitant hidden fees to your broker, or worry about holding counterfeit stock? Capital markets work, but they’re incredibly inefficient. A few powerful institutions:

• control stock lending and margin, generating fake shares en mass;
• systematically disenfranchise global investors from buying stocks; and
• through manipulative systems, ultimately cost investors over $3.75T / year.

Transfer agents can uproot industry behemoths by undermining their grasp on capital markets. In particular, all brokers are commingled as but a single investor on the books of public companies. Public firms hire a “transfer agent” to maintain these investor records.

The stock transfer agent industry has consolidated to four major providers over the past few decades. Service amongst them has dwindled while prices skyrocket. Issuers are not satisfied.

Old transfer agents force book-entry stockholders to print complex paperwork, travel to an approved bank, present identification documents, wait for a tedious banker review, snail mail everything, and hope for an unhurried account statement or check back.

We think significantly more investors would use transfer agents if their trading experience was digital, streamlined, and came with easy bank connections. This is possible since private stock sales on your own behalf aren’t regulated as stringently as traditional capital markets.

Transfer agents haven’t offered a trading interface because old market technology required centralized coordination. Securities laws disallow transfer agents from this. But decentralized ledgers and particularly the Stellar Decentralized Exchange (“SDEX”) let book-entry investors match trades from anywhere with zero middlemen. This is the future of investing.

For more information, please see the paper “Block Transfer.”