Registered Holder

What Is a Registered Holder?

A registered holder is a shareholder who holds their shares directly with a company. Registered holders have their names and addresses recorded in the company's share registry, which is usually maintained by its transfer agent. Investors who use this direct registration system (DRS), a service offered by the Depository Trust Company, to become registered holders receive a statement of ownership attesting to the number of shares they hold, rather than a physical stock certificate.

Registered holders receive all investor information, corporate communications, and dividends directly from the company or its transfer agent. A shareholder can elect to become a registered holder even if the shares are purchased through a broker. A registered holder is also known as a registered owner.

Key Takeaways

  • A registered holder is a shareholder but one who holds their shares via the company.
  • Registered holders are privy to all corporate communications, investor information, and they receive their dividend payments from the company.
  • Becoming a registered holder is more expensive and not as convenient as holding securities in street name.
  • When you purchase securities via an investment broker, you often hold those securities in street name versus owning an actual certificate.
  • Registered holders may also be referred to as legal owners, and they may have rights that allow them to access a company's financial records.

Understanding Registered Holders

The direct registration route through which a shareholder can become a registered holder is one of three ways a security can be held. The other two ways of holding a security are in street name or through physical certificates.

An investor's preference for using one of these three ways of holding securities would be based on factors such as convenience when trading, cost, risk, their preferred method of receiving dividends, and communications.

Becoming a registered holder is not as convenient or cheap as holding securities in street name. Still, it is preferable to holding physical certificates, which can be lost, damaged, or stolen.

While a registered holder can sell a security directly from their direct registration system account, to obtain current pricing, the security generally has to be transferred electronically to a broker/dealer before it can be traded.

Registered holders usually have more access to a company's records and the ability to dissent during a merger than beneficial owners, even though both types of holders share the right to vote, collect dividends, and receive quarterly reports.

Registered Holders vs. Beneficial Owners

A registered holder is distinct from a beneficial owner or holder, whose holdings are held in a brokerage account or by a bank or nominee in street name. But as shareholders of a company, registered holders and beneficial owners have the same rights with regard to voting, receiving dividends, and communications. The main difference is how voting rights are exercised, and how dividends or communications are received.

That said, there are many jurisdictions where only registered holders, also known as legal owners, can exercise the rights. So a registered holder can inspect a company's records and books, vote, and dissent in a merger.

Beneficial owners must work through the proxy system to exercise these same rights as they are not the legal owners of the shares. In fact, requests by beneficial owners to review the books are often rejected by companies on the grounds that they do not come from a registered holder.

Article Sources

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  1. U.S. Securities and Exchange Commission. "Holding Your Securities." Accessed Nov. 15, 2021.

  2. U.S. Securities and Exchange Commission. "What Is a 'Registered' Owner? What Is a 'Beneficial' Owner?" Accessed Nov. 16, 2021.

  3. U.S. Securities and Exchange Commission. "Spotlight on Proxy Matters—Receiving Proxy Materials." Accessed Nov. 16, 2021.