DEFINITION of 'Registered Holder'

Shareholders who hold 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 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. Also known as registered owner.

BREAKING DOWN 'Registered Holder'

The direct registration route through which a shareholder can become a registered holder is one of three ways in which 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, preferred method of receiving dividends and communications, etc.

Becoming a registered holder is not as convenient or cheap as holding securities in street name, but it is preferable to holding physical certificates, which can be lost, damaged or stolen. While a registered holder can sell a security directly from the direct registration system (DRS) account, in order to obtain current pricing, the security generally has to be transferred electronically to a broker/dealer before it can be traded.

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, etc., the only difference being the manner in which voting rights are exercised and dividends or communications received.




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