Book-Entry Securities and Registration

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Chapters in this video

  1. 0:00 Street name versus customer name registration
  2. 1:54 DTC, Cede & Co., and certificate immobilization
  3. 2:51 NSCC netting and the DTCC family tree
  4. 4:39 DRS: direct registration without paper certificates
  5. 5:33 Transfer agent versus registrar roles
  6. 6:26 Rapid-fire exam recap

What this video covers

  • Why street name registration means the broker-dealer is the registered owner and the customer is only the beneficial owner, and what that means for dividends and proxy materials
  • How the Depository Trust Company (DTC) immobilizes physical certificates and why Cede & Co. is its nominee name, not a separate corporation
  • The difference between DTC (the vault that holds securities) and the National Securities Clearing Corporation (NSCC) (the matchmaker that nets and clears trades), and why both are subsidiaries of the Depository Trust & Clearing Corporation (DTCC)
  • How Continuous Net Settlement (CNS) works: why only the net 300 shares transfer when Firm A owes Firm B 1,000 shares and Firm B owes Firm A 700 shares
  • What the Direct Registration System (DRS) is: customer name on the issuer's books with pure electronic book entry, zero physical certificate
  • The distinct roles of the transfer agent (the busy clerk updating ownership records) and the registrar (the bouncer preventing over-issuance), and which one the exam targets for unauthorized share prevention
  • Why bearer form has been virtually eliminated for new issues, and the tax-reporting reason behind its extinction

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