Q: Does the definition of "customer" include the relationship with an investor that is established when a bank acts as a registered transfer agent for an issuer, for example, when it effects transactions for the investor in the securities of an issuer as part of the issuer's dividend reinvestment plan or as part of the plan or program for the purchase or sale of that issuer's shares in a manner that does not cause the bank to be a broker under the Securities Exchange Act of 1934?
A: No. A bank that is a registered transfer agent is acting as agent of the issuer of securities. The relationship with the investor does not constitute a “formal banking relationship established to engage in services, dealings, or other financial transactions” with the investor in these situations. Thus, the bank’s relationship with the investor does not constitute a “customer” relationship. With respect to a bank acting as a transfer agent for its own securities, such bank is dealing with shareholders as shareholders and not as customers. (April 2005)