SIE: Transfer Of Common Stock

Transfer of Common Stock

Securities may be held in one of three ways:

1. 1. Physical certificate. The stock is registered in the owner’s name on the issuer’s books, and a stock certificate is delivered to the door of the owner or his broker.
2. 2. Street name registration. The security is registered on the issuer’s books in the name of the owner’s brokerage firm (the street in “street name” refers to Wall Street), and the brokerage holds the security in book-entry form. Book-entry form means there is no physical certificate and ownership is recorded electronically. The beneficial rights of ownership belong to the customer, not the brokerage firm.
3. 3. Direct registration. The security is registered on the issuer’s books in the owner’s name, and either the company or its transfer agent holds the security in book-entry form on the owner’s behalf.

Because the physical transfer of stocks is unwieldy in a market where millions of shares are traded every day, the ownership of physical stock certificates is being phased out. Today most common stock shares are held in street name.

For those who still hold physical certificates, the transfer of ownership is done by en