If you lose your certificate, you may be charged a fee for a replacement certificate. This may make it harder for you to sell quickly. When you want to sell your stock, you will have to send the certificate to your broker or the company's transfer agent to execute the sale. 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 company knows how to reach you and will send all company reports and other information to you directly. The advantages of holding a physical certificate include: For more information on safeguarding your securities, please read our "Fast Answer" on Lost or Stolen Stock Certificates. Your broker - or the company or its transfer agent - will generally charge a fee to replace a lost or stolen stock certificate. It can be difficult to prove that you once owned a certificate that has been lost, stolen, or destroyed. It's important that you safeguard your certificates until you sell or transfer your securities. You may have to pay a nominal fee for the added expense of issuing a paper certificate. When you buy a security, whether through your broker or from the company itself, you can ask to have the actual stock or bond certificates sent to you. You should ask your broker or the company what options you have. For example, not all companies offer direct registration, and some no longer issue physical certificates. Depending on the type of security and where you purchase it, you may or may not have all these choices about how your securities are held. This publication explains these choices in greater detail, by laying out the advantages and disadvantages of each and by answering frequently asked questions. For more information about DRS, please see our Frequently Asked Questions below. 
The "Direct Registration System" (also known as "DRS") allows investors to transfer securities held this way. "Direct" Registration - The security is registered in your name on the issuer's books, and either the company or its transfer agent holds the security for you in book-entry form. Instead, your broker keeps a record in its books that you own that particular security. "Book-entry" simply means that you do not receive a certificate. "Street Name" Registration - The security is registered in the name of your brokerage firm on the issuer's books, and your brokerage firm holds the security for you in "book-entry" form. Physical Certificate - The security is registered in your name on the issuer's books, and you receive an actual, hard copy stock or bond certificate representing your ownership of the security.
Five Questions to Ask Before You InvestĪs an individual investor, you have up to three choices when it comes to holding your securities:.
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