Beneficial Owner


DEFINITION of 'Beneficial Owner'

1. A person who enjoys the benefits of ownership even though title is in another name.

2. Any individual or group of individuals that, either directly or indirectly, has the power to vote or influence the transaction decisions regarding a specific security.

BREAKING DOWN 'Beneficial Owner'

1. For example, when shares of a mutual fund are held by a custodian bank or when securities are held by a broker in street name, the true owner is the beneficial owner, even though, for safety and convenience, the bank or broker holds title.

2. Beneficial ownership may be shared among a group of individuals. If a beneficial owner controls a position of more than 5% it must file Schedule 13D under Section 12 of the Securities Exchange Act of 1934.

  1. Voting Right

    The right of a stockholder to vote on matters of corporate policy ...
  2. Securities And Exchange Commission ...

    A government commission created by Congress to regulate the securities ...
  3. Custodian

    A financial institution that holds customers' securities for ...
  4. In Street Name

    A brokerage account where the customer's securities and assets ...
  5. Voting Shares

    Shares that give the stockholder the right to vote on matters ...
  6. Class Of Shares

    1. Types of listed company stock that are differentiated by the ...
Related Articles
  1. Mutual Funds & ETFs

    Proxy Voting Gives Fund Shareholders A Say

    You have the right to take part in important company decisions - even if you cannot attend the meetings.
  2. Mutual Funds & ETFs

    Activist Hedge Funds: Follow The Trail To Profit

    Learn to profit by following the lead of some of Wall Street's most ruthless investors.
  3. Investing Basics

    Knowing Your Rights As A Shareholder

    We delve into common stock owners' privileges and how to be vigilant in monitoring a company.
  4. Options & Futures

    Delving Into Insider Investments

    Keeping tabs on company executives can provide clues about where a stock is headed.
  5. Mutual Funds & ETFs

    Top 3 Latin America Stock Mutual Funds

    Discover information about some of the most popular mutual funds that offer investors exposure to equities of companies in Latin America.
  6. Mutual Funds & ETFs

    Top 3 Inflation Protected Bond Mutual Funds

    Learn about the characteristics and suitability of the top inflation-protected bond mutual funds, and how investors can use these funds to their advantage.
  7. Mutual Funds & ETFs

    Top 3 High Yield Bond Mutual Funds

    Read about three high-yield bond mutual funds and why they are currently popular, and learn the advantages and disadvantages of investing in high-yield bonds.
  8. Professionals

    5 Reasons Financial Advisors Still Choose Mutual Funds

    Take a look at five primary reasons why financial advisors still choose to recommend mutual funds over other types of investment vehicles.
  9. Investing Basics

    Is the Gerber Grow-Up Plan Worth it?

    Identify the provisions of the Gerber Grow-Up Plan, a life insurance policy for children, and understand the drawbacks of purchasing such an investment.
  10. Professionals

    Are ETFs a Good Fit for 401(k) Plans?

    The popularity of ETFs among investors and advisors continues to grow. But are they a good fit for 401(k) plans?
  1. 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 Full Answer >>
  2. Why are mutual funds subject to market risk?

    Like all securities, mutual funds are subject to market, or systematic, risk. This is because there is no way to predict ... Read Full Answer >>
  3. Does Fidelity have mutual funds?

    Fidelity offers clients all asset classes of mutual funds, ranging from domestic equity to specialized sectors. The offering ... Read Full Answer >>
  4. How often are mutual fund prices updated?

    A mutual fund's price, or its net asset value (NAV), is determined once a day after the markets close at 4 p.m. Eastern time ... Read Full Answer >>
  5. Can minors invest in mutual funds?

    A mutual fund can be opened under the name of a minor through a custodial account overseen by a guardian. The custodian holds ... Read Full Answer >>
  6. Can mutual funds only hold stocks?

    There are some types of mutual funds, called stock funds or equity funds, which hold only stocks. However, there are a number ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Ex Works (EXW)

    An international trade term requiring the seller to make goods ready for pickup at his or her own place of business. All ...
  2. Letter of Intent - LOI

    A document outlining the terms of an agreement before it is finalized. LOIs are usually not legally binding in their entirety. ...
  3. Purchasing Power

    The value of a currency expressed in terms of the amount of goods or services that one unit of money can buy. Purchasing ...
  4. Real Estate Investment Trust - REIT

    A REIT is a type of security that invests in real estate through property or mortgages and often trades on major exchanges ...
  5. Section 1231 Property

    A tax term relating to depreciable business property that has been held for over a year. Section 1231 property includes buildings, ...
  6. Term Deposit

    A deposit held at a financial institution that has a fixed term, and guarantees return of principal.
Trading Center
You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!