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.