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.

series 62 study guides

Mailing Instructions


Related Articles
  1. Professionals

    HOLDING SECURITIES

    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 ...
  2. Professionals

    C. Holding Securities

    When an investor opens an account, they must decide where they want their securities to be held.
  3. Professionals

    A. Introduction: Customer Accounts

    Prior to opening an account for any new customer, a registered representative must complete and sign a new account form.
  4. Professionals

    Service Instructions

    FINRA Series 6: Section 12 Service Instructions. Service Instructions such as Transfer and Ship, Transfer and Hold, Hold in Street Name, Hold or Mail Payments, Forward and Delivery versus Payment ...
  5. Professionals

    ACCOUNT TRANSFERS

    Account Transfer Clients from time to time will wish to have their accounts transferred from one brokerage firm to another. This is usually accomplished through an Automated Client Account Transfer, ...
  6. Professionals

    Liability And Transferability

    Limited Liability A stockholder’s liability is limited to the amount of money they invested in the stock. They cannot be held liable for any amount past their invested capital. Freely Transferable ...
  7. Professionals

    Corporate And Municipal Securities Settlement Options

    Regular way transactions in corporate stocks and bonds and municipal bonds settle on the third business day or T+3. There are, however, times when either party to the transaction may request ...
  8. Professionals

    Maintaining Customer Accounts

    FINRA Series 6: Section 12 Maintaining Customer Accounts. In this section Address Changes, Transferring Accounts, Cleints's financial information, account statements and investors objectives.
  9. Professionals

    Closing Accounts

    Closing Accounts
  10. Professionals

    C. Order Tickets

    Prior to executing a customer’s order the representative must fill out the appropriate order ticket and present it to the trading department or wire room for execution.
RELATED TERMS
  1. Street Name

    When securities are held in the name of a broker or other nominee, ...
  2. Stock Record

    An electronic system that helps brokerage firms keep track of ...
  3. Delivery Versus Payment - DVP

    A securities industry settlement procedure in which the buyer's ...
  4. Safekeeping

    The storage of assets or other items of value in a protected ...
  5. Registered Holder

    Shareholders who hold their shares directly with a company.
  6. In Street Name

    A brokerage account where the customer's securities and assets ...
RELATED FAQS
  1. What protects an investor’s interest in the case of terrorist sabotage, or act of ...

    Currently, most stock ownership is done electronically thru the combined effort of the brokerage firms and the transfer agents ... Read Answer >>
  2. How do you transfer common stock from one broker to another?

    Understand how common stock assets are transferred from broker to broker using the Automated Customer Account Transfer Service ... Read Answer >>
  3. What does "in street name" mean, and why are securities held this way?

    In almost every instance when you buy or sell securities with a broker, your name is not actually on the stock or bond certificate. ... Read Answer >>
  4. Are there any regulations on transfer pricing?

    Learn about transfer pricing, its role in intra-business calculations, and how the U.S. government regulates transfer pricing ... Read Answer >>
  5. What's the difference between cash-on-delivery differ and delivery against payment?

    Find out more about cash on delivery and delivery versus payment transactions and the difference between these two types ... Read Answer >>
  6. Can I give stock as a gift?

    Stocks, bonds or any other securities can be transferred as gifts. Giving the gift of stock also has benefits for the giver. ... Read Answer >>
Hot Definitions
  1. Return On Invested Capital - ROIC

    A calculation used to assess a company's efficiency at allocating the capital under its control to profitable investments. ...
  2. Law Of Demand

    A microeconomic law that states that, all other factors being equal, as the price of a good or service increases, consumer ...
  3. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  4. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  5. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  6. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
Trading Center