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Security Power

Sept. 14, 2005

A "security power," often called a stock power or bond power, is a legal document – separate from a securities certificate – that investors can use to transfer or assign ownership to another person. Securities powers typically are used either: (1) as a matter of convenience when an owner cannot sign the actual certificates; or (2) for safety (such as sending unsigned certificates in one envelope and signed powers in another). Physically, a securities power looks like the back side of a securities certificate, and it can be completed in the same manner. Market professionals typically attach a customer's signed powers to the related unsigned certificates for processing purposes.

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.

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