Series 7 Exam Question 324: Answer and Explanation

Question: 324

All the following activities are a registrar's functions EXCEPT

• A. accounting for the number of shares outstanding
• B. auditing the transfer agent
• C. ensuring that the outstanding shares do not exceed the number of shares on the corporation's books
• D. transferring shares into the name of the new owner

Correct Answer: D

Explanation:

D. In order to answer "ownership transfer" questions correctly on the Series 7 exam, you must be able to distinguish a registrar's functions from a transfer agent's functions. If that isn't stressful enough, you have an "except" question, which means you're looking for a false answer. As for functions, a registrar accounts for the number of shares on the corporation's books to ensure that the outstanding shares don't exceed the total number of shares on the books. The registrar also audits the transfer agent. The correct answer is Choice (D) because the transfer agent — not the registrar — records the names of stockholders, cancels old shares, and transfers shares to new owners' names.