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I understand that this would not be public info but is is possible for a company/the market to know the full history of individual share ownership? i.e. if I just bought some shares of a company, someone must have sold them (or they were created and I am the first owner). But if I do buy 100 shares and 20 came from one person and 80 from another do each of those shares have an identity that is traceable?

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4 Answers 4

The answer in theory is yes.

The answer in reality is no. Let me explain:

IN THEORY

  1. A brokerage/trader like, take your pick: Charles Schwab, E*Trade, Scottrade, et cetera would certainly have a record of who bought and sold what through their system.
  2. The IRS would have records of sales that resulted in a taxable event
  3. Companies maintain what is called a Capitalization Table (Cap Table for short) which is a list of all shareholders of record.

Combine all of these lists and perhaps you could get a complete record.

IN REALITY

  1. Because each brokerage is its own operating entity and maintain separate records it is unlikely one could combine all their records to create such a traceable list as you imagine.
  2. The IRS records do not necessarily track purchases so its records are incomplete
  3. Cap Tables are insufficient because when individuals purchase stocks through Brokerages the securities are "held in street name." Think of "being held in street name" as akin to being in escrow. The shareholder of record in the brokerage, not the individual. So the company only knows Scottrade "owns" XXX shares, while only Scottrade knows person A owns X and person B owns XX.
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I'd add: brokerages are buying large quantities and selling large quantities. I seriously doubt that anyone is mapping the individual shares. That is, suppose Al and Bob each buy 1 share through Schwab. Then they tell Schwab they want to sell. Meanwhile Carl and Doug each order 1 share through E-Trade. E-Trade buys the 2 shares from Schwab to give to Carl and Doug. Would anybody track that the share from Al went to Carl and the share from Bob went to Doug or vice versa? I don't know how the records are kept, but I wouldn't be surprised if the answer is no. –  Jay Jul 31 at 21:42
    
@jay If the answer is no then how do they ensure that Doug didn't get 10 shares? i.e. if there is no real link between buyer and seller other than E-Trade's word, how do they ensure the shares made it to the right place? –  Brad Jul 31 at 21:56
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@Brad possibly better example - if Alice and Bob sold Charlie 50 shares each and then Dan and Erin bought 50 shares each from Charlie - is it possible to say even how many shares Dan bought used to belong to Alice and how many to Bob? –  Maciej Piechotka Jul 31 at 22:09
    
@MaciejPiechotka My gut says Yes, you would be able to trace back. But maybe it is more like if I pay someone with 50 dollars with dollar bills and they then spend those dollar bills that is traceable because paper currency has serial numbers built into it. But, if I pay with a credit card all is lost as all those dollars are equal. –  Brad Aug 1 at 0:20
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Given that you can short sell shares in some markets, who currently owns a share is an amusing concept.But that point aside, the way ownership is registered is also a factor of time. If you buy and sell shares intra day (day trade) versus buy and retain for weeks/months/years then the reporting downstream changes. Given that a share can change hand 1 million times in one day, the history may not be easy to come by. Indeed some brokers may only offer net day outcomes. This is why end of day settlement is "so exciting". –  phil soady Aug 1 at 12:18

Not sure about US. In India all Demat shares have a unique identity. Incase of splits or merging of shares, new ID's are created maintaining the linking of older ID's. The Demat holding entity would have all the history of a particular stock. It is mandatory to disclose the name of the person / entity who has purchased the shares.

Of Course if shares are purchased by Fund houses or other aggregators then its the aggregators name that would be available.

All this data is confidential and not meant for common consumption.

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Shares do not themselves carry any identity.

Official shareholders are kept at the registrar. In the UK, this may be kept up to date and publicly accessible. In the US, it is not, but this doesn't matter because most shares are held "in street name".

For a fully detailed history, one would need access to all exchange records, brokerage records, and any trades transacted off exchange.

These records are almost totally unavailable.

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A lot will depend on wether you have in your possession the physical share documents or just numbers in your brokerage portfolio.

Electronic shares are not traceable as they do not exist as individual entities. ETrade certainly knows who bought how much, but no concept of which ones. Lets say ET buys 1000 shares of Acme, their database looks like this:

+-------------------------+
| Owner | Ticker | Shares |
+-------+--------+--------+
| ET    | AAPL   |   8000 |
| ET    | Acme   |   1000 |
| ET    | ATT    |   2550 |
+-------+--------+--------+

Now they sell 400 shares to Bob:

+-------------------------+
| Owner | Ticker | Shares |
+-------+--------+--------+
| ET    | AAPL   |   8000 |
| ET    | Acme   |    600 |
| ET    | ATT    |   2550 |
| Bob   | Acme   |    400 |
+-------+--------+--------+

Bob sells 200, Alice buys 100:

+-------------------------+
| Owner | Ticker | Shares |
+-------+--------+--------+
| ET    | AAPL   |   8000 |
| ET    | Acme   |    700 |
| ET    | ATT    |   2550 |
| Bob   | Acme   |    200 |
| Alice | Acme   |    100 |
+-------+--------+--------+

( skipped one transaction for brevity )

Did Alice get 100 shares out of ET's original 1000, or did she get 100 shares that were previously owned by Bob? Or 27 from ET and 73 from ET?

Another, less exact way to picture the process is one share is 1ml of liquid. If you return 50ml to the pot it becomes indistinguishable from the rest.

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Do you have a source for Electronic shares are not traceable as they do not exist as individual entities.? That is what I am most interested in. The rest of your example, while good, is kind of saying "this is hard so they don't do it". It is feasible to think that each share has a GUID and that the movement of 50 shares is not the number 50 moving around but 50 known GUIDs which are separable. –  Brad Aug 1 at 1:14
    
shares are generally traded in parcels. Minimum lots. The total number is important. What happens in a share split? 1000 shares become 5000 shares. Is this now 5000 never traded shares? given the nature x shares Y knowing history of share is nondeterministic. A registered share document is normally for a "quantity" of shares. Not share 123,124,125 etc,. Then consider a company with 1Billion shares issued. where daily trades are in the 10millions and sometimes 100 millions. not body is tracking individual share xyz. –  phil soady Aug 1 at 12:42
    
@Brad no specific reference I can link to, but consider this: I occasionally trade gold. I once had a (traceable) chunk in my drawer, but it is much more convenient to use the broker's service. I can buy/sell as much as I want without having to haul it in, and I can withdraw the metal at any time in 50 gram multiples. But there is zero concept of which part of which bar in their vault is mine. They're also completely ok with me cutting a 200g bar in half. (but they will swap it for 2 x 100g for free, and I don't leave $50 worth on the saw.) –  paul Aug 1 at 13:32

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