Custody and Control of Securities: Rapid Fire

What this video covers

• The difference between custody (physical possession) and control (recognized location with no-payment delivery and identified customer records), and why missing either condition breaks control status
• Why segregation keeps customer securities away from the firm's general creditors in a bankruptcy scenario
• How street name registration works: the broker-dealer or nominee is the registered holder while the customer remains the beneficial owner, with the exception of directly held mutual fund shares
• The paperwork distinction: lending eligible margin securities requires written authorization first, while borrowing requires written disclosure before the first borrow warning that Securities Investor Protection Act (SIPA) coverage may not apply
• What constitutes good delivery for registered certificates (proper assignment, matching signature, acceptable guarantee, power of substitution when required) versus bearer certificates (transfer by physical possession alone)
• Why criminal and noncriminal certificate losses both report to the same two entities: the SEC or its designee and the registered transfer agent
• How restricted securities (acquired outside a public offering from an issuer or affiliate) differ from control securities (held by an affiliate regardless of acquisition method), why they can overlap on one certificate, and the holding period rules: six months for issuers reporting 90-plus days, one year otherwise, with the clock starting at full payment and not removing the stock legend