Auditors, transfer agent, and registrar

Three roles give investors and counterparties confidence that a reporting issuer's financial statements, and its record of who owns what, are accurate: the auditor, the transfer agent, and the registrar. An annual information form, where one is filed — filing an AIF is mandatory only for a non-venture issuer — discloses who holds each role. This article describes what each role does and why it exists, independent of any specific firm currently holding the role.

The auditor

The auditor is the independent, external accounting firm engaged to examine the issuer's annual financial statements and issue an opinion on whether they present the issuer's financial position fairly, in accordance with IFRS. The auditor also performs a review, short of a full audit, of interim financial statements filed each quarter. The auditor's role exists because investors relying on financial statements prepared by management benefit from an independent professional's examination of those statements before relying on them. Auditor independence, appointment, and oversight are the responsibility of the audit committee of the board, not of management.

The registrar

The registrar maintains the definitive record of who currently holds each outstanding security — the register of unit holders or shareholders. For the Direct-Hold Solutions, this function is performed through the property ledger: each vehicle's own governing entity — the general partner in Canada and the United States, the Administrator in Spain and Mexico — updates the ledger when a completed transfer is received. The ledger entry — not a separate paper register — is the authoritative record of ownership for that asset, as described in Accredited Investor Eligibility. The registrar function exists so that there is one authoritative answer, at any point in time, to the question of who owns a given unit.

The transfer agent

A transfer agent is a party — often a trust company or a specialized transfer agency — engaged to process the mechanics of a security transfer: cancelling the transferring holder's position and issuing the new holder's position on the register, in accordance with instructions and supporting documentation. The firm engaged as transfer agent for a given vehicle in a given reporting period is disclosed in the applicable filing, not here, for the reason set out in Experts: the engagement can change between periods.

Where a Direct-Hold Solution's securities are deposited with a central securities depositary — CDS in Canada, DTC in the United States, Iberclear in Spain, or Indeval in Mexico, as described in Four-Jurisdiction Framework — settlement and transfer mechanics for depositary-eligible positions are performed in coordination with that depositary's participant network. The vehicle's governing entity does not perform them alone. For positions held and transferred directly on the property ledger rather than through a depositary, each vehicle's own governing entity — the general partner in Canada and the United States, the Administrator in Spain and Mexico — performs the transfer function directly upon receipt of a completed transfer instruction, as described in Accredited Investor Eligibility.

Why the three roles are kept separate

Separating financial statement verification (the auditor), ownership record maintenance (the registrar), and transfer processing (the transfer agent) from the function of managing the underlying asset is a standard governance practice: it means that no single party both originates a transaction and independently verifies or records it.

See also

• Audit Committee Mandate — board oversight of auditor appointment and independence
• Experts — disclosure of the auditor and other named experts in offering documents