There are three principal ways of holding securities: As with direct electronic registration, nominee accounts make paperless telephone and internet trading possible with faster settlement periods and lower commissions than certificate deals.
They often enable domestic small investors to gain access to derivatives such as warrants and contracts for difference, to exercise various types of order, and to buy shares on margin.
This means that dividends, shareholder perks, company reports, details of corporate actions and other communications are sent to the stockbroker rather than the beneficial owner.
[6] Unable to identify the actual beneficial owners, protestors intimidated the employees of the stockbroker firms instead, to discourage them from handling such shares.
Article 8 provides for a system of heavily intermediated securities holding where transfers are by book-entries and stock certificates are registered in the name of a designated nominee entity.