As securities worth hundreds of millions of dollars change hands daily, every precaution must be taken to protect the holders. The New York Stock Exchange has, therefore, ruled that every certificate of a listed security issued by a transfer agent shall be further recorded by a registrar. His particular function is to certify that the amount of stock certificates outstanding at all times will not exceed the number of shares actually authorized and issued by the corporation. Since the registrar should act as a check upon the transfer agent, the Stock Exchange will not permit the same trust company to serve in both these capacities for any one corporation. For the transferring of shares, it is not always essential to retain the services of an outside agent, and if there is no active trading in its stock a small corporation usually handles these transfers in its own office. A number of the large industrial concerns whose stocks are listed on the Exchange maintain their own transfer agencies in New York City. Although a corporation is thus permitted to act as its own transfer agent, under no condition may it serve as registrar of the stocks which it has issued.

Such safeguards are not as imperative in handling bonds. Coupon bonds are negotiable merely by delivery from one person to the other, and this transaction is not recorded on the books of the corporation which has originally issued the securities. However, a registered bond is similar to a stock in that its ownership can be changed only by proper entry on the books of the corporation. It is unnecessary to issue a new instrument whenever a bond changes ownership, for the name of the holder, the date of the registration, and the signature of the individual acting for the registrar appear on the reverse side, and so a separate transfer agent is not needed in the assignment of the bond.