Custody-Only Trading

What Does Custody-Only Trading Mean?
A system in which shares must be registered to the holder by name and can only be traded in physical form.

Investopedia explains Custody-Only Trading
The adoption of custody-only trading requires any purchases or transfers of stock to be placed through the issuing company's transfer agent.

Some companies implement custody-only trading because it protects shareholders from naked short sellers as the shares must be physically held by the seller.