Designing a Sustainable Financial System by Thomas Walker Stéfanie D. Kibsey & Rohan Crichton

Author:Thomas Walker, Stéfanie D. Kibsey & Rohan Crichton
Language: eng
Format: epub
Publisher: Springer International Publishing, Cham

8.4.3.1 Registered or Street Form?

Each corporation sets a ‘record date’ for which shareholders will be entitled to receive proxies and vote in a corporate meeting. To focus on their own business activities, corporations usually contract shareholder record keeping duties to an independent transfer agent (U.S. Securities and Exchange Commission 2015a).

Shareholders who are registered directly—for example, if they have a physical certificate or if they have taken an extra step to have their shares registered directly with the transfer agent—will have their meeting materials and proxies sent directly to their registered address. While this system was very common before the SEC reforms in the 1970s, the ‘vast majority’ of investors hold their shares in ‘street form’, or electronically, at a centralised depository—Depository Trust & Clearing Corporation (DTCC) (U.S. Securities and Exchange Commission 2015a). A record of each shareholder’s investments is maintained by the brokerage, but the shares themselves are held and registered collectively (i.e. all clients together) at the depository. DTCC is the registered owner, the brokerage firm is the intermediary, and the investor is the beneficial owner.

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