How To Direct Register Shares Fidelity

As an individual investor, you accept up to three choices when it comes to holding your securities:

This publication explains these choices in greater detail, by laying out the advantages and disadvantages of each and by answering frequently asked questions. Depending on the type of security and where you buy information technology, you lot may or may not take all these choices almost how your securities are held. For example, not all companies offer direct registration, and some no longer issue concrete certificates. You should ask your broker or the company what options y'all have.

Physical Certificate

When you purchase a security, whether through your broker or from the company itself, you tin enquire to have the bodily stock or bond certificates sent to you lot. Yous may have to pay a nominal fee for the added expense of issuing a newspaper document. Information technology's of import that you safeguard your certificates until you sell or transfer your securities. It can be difficult to prove that you once owned a certificate that has been lost, stolen, or destroyed. Your banker — or the company or its transfer amanuensis — will by and large charge a fee to replace a lost or stolen stock document. For more than information on safeguarding your securities, please read our "Fast Answer" on Lost or Stolen Stock Certificates.

The advantages of property a physical certificate include:

The visitor knows how to achieve you and will transport all visitor reports and other information to yous directly.
You may find it easier to pledge your securities as collateral for a loan if you hold the certificates yourself in physical certificate form.

The disadvantages include:

When y'all want to sell your stock, you will have to send the document to your broker or the visitor's transfer agent to execute the sale. This may brand it harder for you lot to sell quickly.
If you lose your certificate, you lot may be charged a fee for a replacement certificate.
If you lot movement, y'all will have to contact the company with your change of address so that yous do not miss whatever of import mailings.

Street Name Registration

You lot may have your security registered in street name and held in your account at your broker-dealer. Many brokerage firms will automatically put your securities into street name unless yous requite them specific instructions to the contrary. Nether street name registration, your firm volition continue records showing you lot as the real or "beneficial" possessor, but you will non be listed straight on the issuer's books. Instead, your brokerage business firm (or some other nominee) volition announced every bit the owner on the issuer'due south books.

While you will non receive a certificate, your firm will send to you lot, at to the lowest degree four times a twelvemonth, an account statement that lists all your securities at the broker-dealer. Your broker-dealer will besides credit your account with your dividend and interest payments and volition provide you with consolidated tax data. Your broker-dealer volition send you issuer mailings such as annual reports and proxies.

The advantages of letting your brokerage firm hold your securities in "street proper name" include:

Because your securities are already with your broker, you can place limit orders that direct your broker to sell a security at a specific price.
Your brokerage business firm is responsible for safeguarding your securities certificates then you don't have to worry near your securities certificates being lost or stolen.
Your brokerage firm may go along you lot informed of important developments, such equally tender offers or when bonds are chosen.
It is easier to prepare a margin account.

The disadvantages include:

You may experience a slight delay in receiving your dividend and interest payments from your brokerage business firm. For instance, some firms only pass along these payments to investors on a weekly, bi-weekly, or monthly footing.
Since your proper noun is not on the books of the company, the company will not postal service of import corporate communications directly to you.

Direct Registration

If a visitor offers direct registration for its securities, you can cull to be registered directly on the books of the company regardless of whether you lot bought your securities through your broker or directly from the company or its transfer agent through a direct investment plan. Direct registration allows you to accept your security registered in your name on the books of the issuer without the demand for a concrete certificate to serve equally evidence of your ownership. While y'all will not receive a document, you will receive a argument of buying and periodic business relationship statements, dividends, annual reports, proxies, and other mailings directly from the issuer.

The advantages of straight registration include:

Since y'all are "registered" on the books of the company as the shareholder, you will receive annual and other reports, dividends, proxies, and other communications straight from the company.
If you want to sell your securities through your broker, you can instruct your broker to electronically motion your securities via DRS from the books of the company and then to sell your securities. Your broker should be able to exercise this quickly without the demand for you filling out complicated and fourth dimension-consuming forms.
You do non take to worry most safekeeping or losing certificates, or having them stolen.

The disadvantages include:

If you choose to buy or sell registered securities through a company'southward straight investment programme, yous usually will not be able to buy or sell at a specific market price or at a specific time. Instead, the company will purchase or sell shares for the programme at established times — for example, on a daily, weekly, or monthly basis — and at an boilerplate market toll.

While it is solely your decision how to hold your securities, you should carefully review each of the alternative forms of security registration and should consult with your financial advisor or broker-dealer to determine which form is best for you.

Oftentimes Asked Questions

Q: What is the Direct Registration Organisation?

A: The Straight Registration System, or DRS, is a system that enables an investor to electronically motility his or her security position held in straight registration book-entry grade back and forth between the issuer and the investor'southward banker-dealer.

Q: Afterwards I brand my decision on how I want to hold my security, what do I do?

A: You should check with the issuer or your broker-dealer to find out if the issuer offers directly registration. If you are purchasing a security, tell your broker-dealer you want to hold your securities in direct registration. If you currently hold a certificate, you can post or take your certificate either to the issuer or to your broker-dealer with instructions to modify to direct registration. If y'all currently hold your security in street name registration, you can instruct your broker-dealer or the issuer to motility your security position to the issuer for direct registration. In whatever situation, you will receive a argument of ownership from the issuer acknowledging your DRS volume-entry position one time the modify has been fabricated.

If you lot want a certificate or if you lot desire to use street name registration, tell your broker-dealer your choice at the fourth dimension of purchase. If yous elect a document, ane will be sent to you. If yous cull street name registration, your banker-dealer volition send you a confirmation and periodic account statements acknowledging your buying. If you currently hold a certificate, you can deliver the document to your banker-dealer with instructions to change your registration to street name registration. If you currently hold in street name registration, y'all can tell your broker-dealer to obtain a certificate for yous.

Q: What practice I have to do to sell my security?

A: To sell a security held in directly registration, you lot can:

instruct the issuer to sell your security (many issuers accept programs in place to accommodate auction requests); or
instruct your banker-dealer or the issuer to electronically move your security to your broker-dealer for your banker-dealer to sell; or
asking a physical certificate and evangelize it to your banker-dealer to sell.

To sell a security held in street name registration, you can:

instruct your banker-dealer to sell your security; or
request a concrete certificate and deliver information technology to another broker-dealer to sell; or
instruct your banker-dealer or the issuer to electronically motility your security to the issuer for the issuer to sell (many issuers have programs in place to conform sale requests) or to electronically movement to another broker-dealer to sell.

To sell a security for which you hold a physical certificate, you can:

deliver the certificate to your banker-dealer with your instructions to sell or
deliver the certificate to the issuer with your instructions (a) to alter the registration to DRS and motility the position to your broker-dealer to sell if your security is eligible for direct registration or (b) for the issuer to sell if the issuer has a program in place to accommodate auction requests.

When selling a security through the issuer, the issuer will sell your security under the terms and conditions in place for that issue. For example, some sell orders volition be executed on the day the issuer receives them, and some orders are aggregated for frequent, simply non daily, execution. (Notation: you should enquire the issuer if it offers a selling service and what the terms and conditions are.) Gain from the sale will be mailed to you three business days after the appointment of sale.

When selling through your broker-dealer, your instructions will be acted on immediately and in accordance with the guidelines information technology provides to yous. Proceeds from the sale will be made available to you or credited to your account iii business days after the date of auction.

Q: Tin can I place a limit social club? Market lodge? Stop order?

A: Only a banker-dealer can execute a limit, market place, or terminate order. As a issue, you tin place any of these types of orders only if you use a banker-dealer to execute a transaction for securities held in direct registration, street-name, or in document form.

Q: What almost my relationship with my broker-dealer if I utilise direct registration?

A: Y'all can maintain your relationship with your broker-dealer regardless of your selection of registration.

When you purchase a security to hold in direct registration, you can tell either your broker-dealer or the issuer to include pertinent broker-dealer information in the issuer'southward records.
If y'all do not take your broker-dealer information included in the issuer'southward records at the time of purchase and later want to or if yous desire to modify the broker-dealer information in the issuer'southward records, you may do and so. You should contact either your broker-dealer or the issuer to obtain information on the procedures and the documents required for such actions.

Q: If I concord certificates and there is a stock distribution, will I become a certificate for my boosted shares?

A: If the event is eligible for direct registration, you volition probably receive a statement of ownership instead of an boosted certificate.

Q: What are the fees associated with direct registration? With street proper name registration? With a certificate?

A: There are no fees charged by an issuer for direct registration. However, because broker-dealers offer differing services and plans, you should contact your broker-dealer to larn what, if whatsoever, fees it charges.

Q: If I opt for direct registration, what happens if I lose my statement of ownership?

A: If you ever need a duplicate argument of ownership, yous should contact the issuer. The issuer will mail you a new statement of buying.

Q: What happens if my physical certificate is lost or stolen?

A: Brokerage firms, banks, transfer agents, and corporations have procedures in place to assist investors replace lost or stolen certificates. If your securities certificate is lost, accidentally destroyed, or stolen, you should immediately contact the transfer agent and request that a "terminate transfer" be placed against the missing securities. Your broker may be able to assist yous with this process.

The "cease transfer" helps to forestall someone from transferring ownership from your proper noun to another's. The transfer agent or broker-dealer will written report the certificates missing to the SEC'due south lost and stolen securities program. For more information please read our "Fast Answer" on Lost or Stolen Stock Certificates.

Q: How are my securities protected if I choose street name ownership?

A: Nearly all broker-dealers are members of Securities Investor Protection Corporation ("SIPC"). As a result your securities and coin held at your broker-dealer are protected upwards to $500,000 with a $100,000 limit for cash. Many broker-dealers also carry insurance in backlog of SIPC's coverage. However, SIPC does non protect you against losses caused past a reject in the market value of your securities. For more data virtually SIPC coverage, delight read our "Fast Respond" on the Securities Investors Protection Corporation.

We have provided this information as a service to investors. It is neither a legal interpretation nor a statement of SEC policy. If you have questions concerning the meaning or application of a particular law or rule, please consult with an attorney who specializes in securities law.