6 ms·

Good question. I am actually not super familiar with it, but in general your shares are owned under the name of the broker (called "street name"). That broker w

Good question. I am actually not super familiar with it, but in general your shares are owned under the name of the broker (called "street name"). That broker will then deal with portioning out dividends etc. I believe you can request to have personal ownership assigned, but this is expensive from what I have read. Unless you don't trust your broker (why are you using them?) it is unlikely to matter to an individual investor. You still have the legal right to the shares.

anovikov 5y ago
Well, it would be stupid to trust the broker. What technically prevents them to run away with all stocks? I currently manage it by simply having accounts with several to avoid putting all eggs in one basket. But this is hardly a solution.
- is0tope 5y ago
  That is where your personal judgement comes in of course, but it would be hard for them to "run away with the stocks". These are not physical certificates, but just registrations in a central organisation. Brokers (in traditional finance) are regulated, audited, and also are often subject to insurance policies in case they went bankrupt, or similar. If you are dealing with a large and reputable institution, you are unlikely to gain any benefit by assigning the shares to yourself I would suspect. Someone please correct me if I am missing something though.
- rmah 5y ago
  What prevents them is custody. Funds, brokers, etc. are all required to use custody providers to keep track of assets and handle the actual transfer of assets.
- gruez 5y ago
  >What technically prevents them to run away with all stocks? What protects a bank from running away with your cash?
- IfOnlyYouKnew 5y ago
  > What technically prevents them to run away with all stocks? It's called the law. > Well, it would be stupid to trust the broker. [..] I currently manage it by simply having accounts with several[...] If you believe it's "stupid" to trust brokers, spreading your exposure across several of them may protect against a complete loss. But it also increases the risk of some loss and, on balance, has exactly the same expected value. The law diminishing marginal utility may put your strategy slightly ahead, but the difference is similarly marginal.
- fred256 5y ago
  > What technically prevents them to run away with all stocks? SIPC insurance is supposed to protect you in case they run away anyway.
lixtra 5y ago
There exist also registered shares[1] for wich each owner of a share is registered in a shareholder register. [1] https://en.m.wikipedia.org/wiki/Registered_share https://en.m.wikipedia.org/wiki/Registered_share

anovikov 5y ago

Well, it would be stupid to trust the broker. What technically prevents them to run away with all stocks? I currently manage it by simply having accounts with several to avoid putting all eggs in one basket. But this is hardly a solution.

is0tope 5y ago
That is where your personal judgement comes in of course, but it would be hard for them to "run away with the stocks". These are not physical certificates, but just registrations in a central organisation. Brokers (in traditional finance) are regulated, audited, and also are often subject to insurance policies in case they went bankrupt, or similar. If you are dealing with a large and reputable institution, you are unlikely to gain any benefit by assigning the shares to yourself I would suspect. Someone please correct me if I am missing something though.
rmah 5y ago
What prevents them is custody. Funds, brokers, etc. are all required to use custody providers to keep track of assets and handle the actual transfer of assets.
gruez 5y ago
>What technically prevents them to run away with all stocks? What protects a bank from running away with your cash?
IfOnlyYouKnew 5y ago
> What technically prevents them to run away with all stocks? It's called the law. > Well, it would be stupid to trust the broker. [..] I currently manage it by simply having accounts with several[...] If you believe it's "stupid" to trust brokers, spreading your exposure across several of them may protect against a complete loss. But it also increases the risk of some loss and, on balance, has exactly the same expected value. The law diminishing marginal utility may put your strategy slightly ahead, but the difference is similarly marginal.
fred256 5y ago
> What technically prevents them to run away with all stocks? SIPC insurance is supposed to protect you in case they run away anyway.

lixtra 5y ago

There exist also registered shares[1] for wich each owner of a share is registered in a shareholder register. [1] https://en.m.wikipedia.org/wiki/Registered_share https://en.m.wikipedia.org/wiki/Registered_share