Canadian Duet

With Australian-based Computershare’s recent announcement it will buy Valiant Trust Company from Canadian Western Bank, the almost exclusive handling of stock transfer service in Canada by Computershare and CST Trust Company is now secured.  That is because in 2013 Computershare bought the other super-regional Canadian transfer agent, Olympia Trust Company; and, since CST (formerly CIBC Mellon) is owned by Pacific Equity Partners (PEP), also out of Australia, that means 95%+ of Canadian registered shareholders will be served by companies based “down under.”

Which should not come as a complete surprise, since Computershare and AST (American Stock Transfer – also owned by PEP) handle 50% of the public companies and 60% of the registered shareholder in the U.S. as well!  Fortunately for U.S. consumers, however, the remainder of the marketplace is still served by several highly qualified and competitive players like Wells Fargo Shareowner Services, Continental Stock Transfer and Broadridge Corporate Issuer Solutions.  Moreover, unlike in Canada where the secondary market is made up of just a couple of players like Equity Transfer & Trust Co. and Capital Transfer Agency Inc., in the U.S. there are six to eight providers that could handle at least half of U.S. public companies, if necessary, these clients having less than 1,500 registered holders and typically not requiring dividend payment or reinvestment services.

So the U.S. still has a sufficiently competitive landscape to ensure reasonable pricing along with excellent shareholder and corporate service.  With the disappearance of Olympia and now Valiant, however, Canada does not have a ready way to keep prices down and customer service “flexible” – although, service should remain generally good (enough) because of a tradition of that in Canada, and provincial regulators will likely apply some pressure of their own within the discipline as required.