Physical vs. Book Entry
Chapters in this video
- 0:00 Three ways shares are held after settlement
- 1:01 Street name: beneficial owner vs. registered owner
- 2:30 Exam trap on ownership rights in street name
- 3:35 Direct Registration System and the transfer agent
- 4:40 Physical certificates and good deliverable form
- 5:37 Side-by-side comparison matrix
- 6:06 Rapid-fire exam recap
What this video covers
- What street name holding means, why the broker-dealer is the registered owner (nominee) on the issuer's books, and why the customer remains the beneficial owner with full economic rights
- How the Depository Trust and Clearing Corporation (DTCC), through its Depository Trust Company (DTC) subsidiary, holds shares electronically and enables T+1 settlement speed
- What the Direct Registration System (DRS) is: electronic, no certificate, but the investor's name appears on the issuer's books via the transfer agent
- Why DRS differs from street name despite both being electronic, and how shares can move between the two systems
- What "good deliverable form" requires for physical certificates: proper endorsement, correct denomination, and absolutely no defacing, damage, or alterations
- How the three methods compare on registered ownership, physical certificate presence, settlement speed, and whose name appears on the issuer's books
- Why street name customers keep all dividends, voting rights, and economic risk even though their name is not on the corporate books
Read the full lesson, free
This video's complete written lesson is free to read in the CertFuel app, no signup wall. The complete SIE course in the app is free too, including adaptive practice questions and spaced-repetition flashcards.