Holding Your Securities

Holding Your Securities

Securities may be held in three different ways. One way is to hold them in certificate form, where the securities are registered in your name on the books of the company, and you receive a printed certificate. Alternative approaches eliminate the need to hold certificates by relying on a “book-entry” record of ownership. For example, you can hold your securities in “street name” where your securities positions are recorded on the books of your brokerage firm. Another book-entry option is direct registration where your securities positions are registered on the company's books. You may not always have a choice about how your securities are held. For example, direct registration is not available for all securities, and Treasury securities and some municipal bonds can be held only in book-entry form.

Investors who hold their securities in “book entry” form generally have the same rights and privileges as those who hold physical certificates, but there are some basic differences. For example, the process for selling or transferring your securities and the way in which you receive communications from the issuer may be different. Also if your securities are held in book-entry form in a margin account, your ability to vote those shares may be different.

Holding Your Securities—Get the Facts contains more information on the different ways securities may be held and the advantages and disadvantages of each.

We have provided this information as a service to investors.  It is neither a legal interpretation nor a statement of SEC policy.  If you have questions concerning the meaning or application of a particular law or rule, please consult with an attorney who specializes in securities law.