1. Abby Cowart, Executive Director, SSA
Shareholder Services Association Webinar: Leading Practices for Unclaimed Property Audits
Welcome:
Abby Cowart, Executive Director, SSA
Moderator:
Melissa Tinker
Community National Bank
Presenters:
Freda Pepper William King
Reed Smith LLP KPMG LLP

2. DISCLAIMER
The information provided in this webinar represents the current understanding of the presenters and the Shareholder Services Association. It is subject to change. In no way should this information be construed or relied upon as legal or operational advice. You should consult with your own legal counsel, compliance officer and/or other subject matter experts.

3. KPMG Presentation Disclaimer
The following information is not intended to be “written advice concerning one or more Federal tax matters” subject to the requirements of section 10.37(a)(2) of Treasury Department Circular 230.
The information contained herein is of a general nature and based on authorities that are subject to change. Applicability of the information to specific situations should be determined through consultation with your tax adviser.
KPMG does not provide legal services.

4. UP Audit Overview
Most states utilize third-party auditors to conduct examinations
Compensation schemes vary, but auditors may be compensated based upon findings
Frequently, challenging and time consuming to complete
Extensive look-back periods with risk of substantial penalty and interest

5. History
1.) Securities Review added to general ledger (GL) exam (c. 2011)
2.) Examinations via transfer agent records (c – present)
3.) Broker/Dealer exams, use of the DMF, and new issuer-direct audits (2015-present)
4.) Securities audits accompanying GL exams (present)

6. Benefits to the States “New” source of review/revenue
Ability to test new theories of determining liability
Foreign
Perhaps less contentious (no estimation)
Approach was to audit a few record keepers at one time (efficient)

7. Risks for Issuers Reputational risks Time and resources
Shareholder retention
Wrongful escheat lawsuits
Time and resources
Broad and burdensome record requests
Financial downsides
Audit expansion

8. Leading Practices to be Prepared
Notify internal parties
Secure NDA
Ensure data security controls
Review statutory and regulatory guidelines in participating states
Confirm audit scope
Stay on top of deadlines and commitments

9. Leading Practices to be Prepared (contd.)
Stay ahead of auditor techniques and methodologies
Review materials provided by third parties before sending
Seek second opinions
Seemingly innocuous requests may not be

10. Sample Requests
Shareowner registration information including first name, last name, middle initial, secondary owner information, full mailing address, TIN, account number for all current registered shareholders for restricted and unrestricted classes
Date account was opened, most recent contact dates, undeliverable dates, electronic correspondence indicator, outstanding payment information

11. Sample Requests (contd.)
Detailed mailing information (type, frequency, method, “responsible party”
Transfer agent agreement
Detailed information on acquisitions and un-exchanged shareholders
Owner location programs
ESPP and restricted stock

12. Audit Resolution Preliminary reports and assessments Remediation
Final audit assessments
Birfurcate property types
Settlements and appeals
Closing

13. Questions William King Freda Pepper KPMG LLP Reed Smith LLP
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14. Save The Dates
April 12 2:00 pm. Webinar: Overview of Section 16 Reporting May 9 2:00 pm. Webinar: Annual Conference Preview Details can be found at

15. 2018 Annual Conference July 17-19, 2018 Newport Beach, California