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Custody-Only Trading

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Dictionary Says

Definition of 'Custody-Only Trading'

A system in which shares must be registered to the holder by name and can only be traded in physical form.
Investopedia Says

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.

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