In Street Name

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What is an 'In Street Name'

An in street name is a brokerage account where the customer's securities and assets are held under the name of the brokerage firm, rather than the name of the individual who purchased the security or asset. Although the name on the 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.

Explaining '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.

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Q&A About In Street Name

What is the phrase used to refer to securities held electronically in a stockbroker's or bank's account?

Nominee name securities.

Who has ownership rights in these securities?

The entity whose name is recorded as the legal owner of the security has ownership rights in that security.

What happens when a client wants to sell their stocks?

The broker can easily allocate a portion of their inventory as required.

Are there any other benefits for holding securities electronically?

Yes, it allows brokers to keep track of all transactions made by clients.

What is an in street name?

What would happen if brokers held paper certificates instead of electronic records?

Securities transactions would take longer because they would have to find exact stock certificates owned by clients and send those back to issuing company who would then change names on new owners.

Who owns securities and assets in an in street name?

The real and beneficial owner still owns them.

Why do brokers hold securities electronically instead of paper certificates?

It is more convenient for brokers to hold securities electronically due to complexity tracking each stock certificate to each individual.

Where are nominee name securities typically held?

In the US, Cede & Co., a nominee of Depository Trust Company, is typically the largest stockholder of a company.

How does this affect transactions?

Transactions take less time.

Who holds those ownership rights on behalf of another person?

The entity holding those ownership rights on behalf of another person is known as the beneficial owner.

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