South Florida Arbitration & Litigation Lawyer Blog
Securities Registration. What are the alternatives available to investors to register securities ownership.
This post is designed to provide the reader with a general description of the ways that an investor can register their securities ownership. Please keep in mind that this information is being provided for educational purposes only and is not designed to be complete in all material respects. Thus, this post should not be relied upon as providing legal or investment advice. If you have any questions concerning this post, you should consult a qualified professional.
As an individual investor, you have up to three choices when it comes to holding your securities:
Physical Certificate – The security is registered in your name on the issuer’s books, and you receive an actual, hard copy stock or bond certificate representing your ownership of the security.
“Street Name” Registration – The security is registered in the name of your brokerage firm on the issuer’s books, and your brokerage firm holds the security for you in “book-entry” form. “Book-entry” simply means that you do not receive a certificate. Instead, your broker keeps a record in its books that you own that particular security.
“Direct” Registration – The security is registered in your name on the issuer’s books, and either the company or its transfer agent holds the security for you in book-entry form. The “Direct Registration System” (also known as “DRS”) allows investors to transfer securities held this way.