What is an 'In Street Name'

In street name is slang for when a brokerage account holds a customer's securities and assets under the name of the brokerage firm, rather than the name of the individual who is the legal owner of a security.

Although the name on a stock certificate is not that of the individual, they are still listed as the real and beneficial owner and have the rights associated with the security.

For instance, if a customer purchases 100 shares of IBM's stock from a broker at Morgan Stanley. Instead of transferring the customer's legal name to the stock certificates, these stocks will be held in 'street name' with Morgan Stanley.

BREAKING DOWN 'In Street Name'

It is more convenient for brokers to hold securities in street name due to the complexity of tracking each stock certificate to each individual. Almost all brokers hold securities electronically, and all securities in a brokers name comprise their inventory. Any time a client needs to buy or sell stocks, the broker is readily able to allocate a portion of their inventory as required.

If brokers were to hold an inventory of paper securities, securities transactions would take more time. For example, if a client would like to sell their certificates, the broker would have to find the exact stock certificates owned by the client and send those securities back to the issuing company who would then change the names on the securities to that of the new owners.

Because thousands of securities change hands daily, the cost savings from the street name convention significantly cuts down on transaction costs. These cost savings can be a material boost to investment returns.

Although holding securities in street name is the norm, some investors still prefer physical transfer and certificates held in their name. Because it has become more expensive to transfer ownership this way, brokers will charge a higher rate or otherwise expect to be compensated for the inconvenience.

RELATED TERMS
  1. In Street Name

    Securities held in street name are held electronically in the ...
  2. Cage

    The cage is the department of a brokerage firm that receives ...
  3. Stock Power

    A stock power is a legal power of attorney form that transfers ...
  4. Active Box

    Active box is a physical location in a brokerage where securities ...
  5. Carrying Broker

    Carrying broker refers to a commodities or securities broking ...
  6. Give Up

    A procedure in securities or commodities trading where the executing ...
Related Articles
  1. Investing

    Picking your first broker

    If you're a rookie investor, choosing a broker may be your first big investment decision. Learn more on whether you should you go with a full-service broker or a discount broker.
  2. Investing

    Brokerage Accounts, Explained

    Brokerages bring together customers or institutions and world financial markets. Here's everything to know about how they operate and what they do.
  3. Trading

    Is your forex broker a scam?

    While the forex market is slowly becoming more regulated, there are many unscrupulous brokers who should not be in business.
  4. Personal Finance

    Research Report Red Flags For Brokers

    Discover how to look past analysts' ratings to find winning stocks for your clients.
  5. Investing

    Watch Out For The Mutual Fund Metamorphosis

    A new name may make a fund look fresh and exciting, but has anything really changed?
  6. Insights

    What Is a Silver Certificate Dollar Bill Worth Today?

    Although a silver-certificate dollar bill no longer can be exchanged for silver, the date, grade and unique features make certain certificates very valuable.
  7. Insurance

    Brokers: Do You Want To Sell Stocks Or Insurance?

    Know the difference between working as a broker or an insurance rep.
  8. Investing

    How to Choose a Forex Broker: Everything You Need to Know

    Take your time when looking for a forex broker because a bad decision can be costly.
  9. Trading

    Understanding order execution

    Find out the various ways in which a broker can fill an order, which can affect costs.
RELATED FAQS
  1. Why Are Securities Held 'In Street Name'?

    Buying or selling securities through a broker means they're held in your broker's name. Read Answer >>
  2. 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 >>
Hot Definitions
  1. Discount Rate

    Discount rate is the interest rate charged to commercial banks and other depository institutions for loans received from ...
  2. Economies of Scale

    Economies of scale refer to reduced costs per unit that arise from increased total output of a product. For example, a larger ...
  3. Quick Ratio

    The quick ratio measures a company’s ability to meet its short-term obligations with its most liquid assets.
  4. Leverage

    Leverage results from using borrowed capital as a source of funding when investing to expand the firm's asset base and generate ...
  5. Financial Risk

    Financial risk is the possibility that shareholders will lose money when investing in a company if its cash flow fails to ...
  6. Enterprise Value (EV)

    Enterprise Value (EV) is a measure of a company's total value, often used as a more comprehensive alternative to equity market ...
Trading Center