Paying agents are usually banks , who are appointed to pay dividends , marketable securities, and principal to security holders on behalf of the issuer. In the case of bonds , for example, a bond agreement will issue the name of the paying agent, who is responsible for making interest and principal payments.
Payment agent agreements usually state, in advance, the date of the agreement and the parties involved, along with the physical address (if applicable), and where the principal amount will be deposited.
The payment agent agreement explains the exact time and method by which the payment agent will pay interest on the notes or other issued securities (for example the Issuer must provide the paying agent with no later than five working days before the interest on the notes receivable is due and payable – name, address, and exact number of each registered user, along with their bank account information.)
Scope of Paying Agent Services
Besides banks, there are also specialized companies that act as paying agents, services provided include:
- Automates the payment process for the payment of dividends and / or interest to maximize the comfort of holders of shares .
- Compile and process all required documentation.
- Provides additional investment management services.
- Offers access to a complete team of professionals and applicable technology.
