Series 62

By Jeff Van Blarcom AAA

Customer Accounts - Holding Securities

When an investor opens an account they must decide where they want their securities to be held. The following methods are available:

  • Transfer and ship
  • Transfer and hold in safekeeping
  • Hold in street name
  • Receipt versus payment / Delivery versus payment RVP / DVP

Transfer and Ship

Securities that are to be transferred and shipped will be registered in the customer’s name and will be sent to the customer’s address of record.

Transfer and Hold in Safekeeping

Securities that are to be transferred and held in safekeeping will be registered in the customer’s name and will be held by the brokerage firm. The broker dealer may charge a fee for the safekeeping of the securities. Customers may now elect to hold securities registered in their name electronically in book enter form through the Direct Registration System. The DRS system offered through the depository trust corporation will allow investors to hold their securities on the books of the issuer or the transfer agent. Investors who hold securities with the DRS will receive a statement from the issuer or transfer agent.

Hold in Street Name

Securities that are held in street name are registered in the name of the brokerage firm as the nominal owner of the securities and the customer is the beneficial owner. Most securities are held in this manner to make transfer of ownership easier.

Receipt Vs. Payment / Delivery Vs. Payment RVP / DVP

These accounts are normally reserved for trusts and other institutional accounts that require that securities be delivered prior to releasing payment for the securities. These accounts are set up as cash on delivery or COD accounts.

Also, at the time the customer opens the account, they will decide what they want to do with the distributions from the account. Investors may have the distributions sent directly to them or they may have them reinvested or swept into a money market account.

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