Safekeeping Certificate

DEFINITION of 'Safekeeping Certificate'

A document that represents ownership of a security or certificate of deposit. Safekeeping certificates are the investor's claim against the institution that is holding his or her financial instruments. These documents are most commonly used to facilitate international securities trading and foreign investment; they benefit both the companies and investors who use them.

BREAKING DOWN 'Safekeeping Certificate'

Depositary receipts are a common example of safekeeping certificates. These documents often represent ownership of securities issued and traded outside the United States. Depositary receipts can be bought and sold like stocks and can help investors diversify their holdings.

Other methods for investing internationally include purchasing U.S.-traded international stocks, purchasing stock in U.S.-based multinational corporations, and investing in international index funds and foreign country mutual funds through U.S. brokerages. When assets are placed with a broker, a safekeeping certificate is issued.

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RELATED FAQS
  1. How do you get a hard copy of a stock certificate?

    Before online brokers and personally-directed accounts, holding a physical stock certificate was a necessity, as this was ... Read Answer >>
  2. What parties are involved in the creation of an American depositary receipt?

    An American depositary receipt (ADR) is a legal certificate issued by a recognized U.S. bank that represents a specific number ... Read Answer >>
  3. Can I pass on the stock certificates to my son in my will?

    I was told I could get stock certificates from the company that I retired from. Will my son get the st... Read Answer >>
  4. What does "in street name" mean, and why are securities held this way?

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  5. Why would a company choose to use global depositary receipts (GDRs) for financing?

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