3 ms·

There's a difference in many US brokerages between having your stocks held in your name versus having them held in "street name" (i.e., in the brokerage's name)

• sidewndr46 4y ago
  If you research how companies are actually incorporated, shares are created, and then listed them it's basically just two tiny companies that exist solely to hold shares. They actually own basically all the publicly traded shares in the US, plus a bunch of non publicly traded ones. You legally can hold shares of any company, but you'd have to spend insane amounts of money. Even when companies are acquired the shares aren't actually transferred to the acquirer. One of the custodial companies just merges the shares into the acquirer.
  • dgacmu 4y ago
    Almost all shares are held in street name, but as a shareholder you have the option of either having the shares registered directly in your name through the company or their transfer agent or to be issued physical stock certificates (usually for a fee). As an example, I used to own a couple of shares of both Apple and IBM. My shares were held directly in my name by computershare, which is the transfer agent for both companies. When I sold them, someone _probably_ bought them through a brokerage, which means that computer share updated the registration to name Cede & co as the registered owner of the stock, and cede updated an entry indicating that the buyers brokerage owned the shares, and the buyers brokerage updated an entry that said that the buyer owned the shares.
• justin66 4y ago
  > There's a difference in many US brokerages between having your stocks held in your name versus having them held in "street name" (i.e., in the brokerage's name). This is irrelevant - a US brokerage cannot arbitrarily trade your shares, whether or not your shares are held in street name. > GP could probably purchase the shares and be issued stock certificates that they could physically own, in which case there would be no chance of a brokerage being able to sell them. This is equivalent to suggesting someone put their cash in a mattress rather than using a bank. The real solution is to find a better bank.
  • cykros 4y ago
    > This is irrelevant - a US brokerage cannot arbitrarily trade your shares, whether or not your shares are held in street name. Indeed. It seems most people think the Hypothecation agreement on a Margin account is something brokerages can do without having such an agreement on file. They can't.
• cykros 4y ago
  There's much ado made over street name vs your name, but the reason margin and hypothecation agreements are so long and you need to sign them to open a margin account is so they can even take steps such as lending out your shares, because unless you have, they can't actually touch them, per your agreements with a cash account. Street name is primarily so that when you go to sell they don't have to go find YOUR shares (adding time and cost) to sell, but can simply find shares of the particular stock that you have in your account which they have a quantity on, to sell. Basically, it maintains fungibility to streamline the process. But you're right, if you care to not trust that, you do have the ability to either get certificates (if they're issued for the stock in question) or do a direct registration (DRS) so they're held directly in digital form at the Transfer Agent. Just of course bear in mind that if you're NOT intent on holding these shares forever, selling at this point can become a multi-day process, so you become a bit less able to react quickly to market activity.