1

If I'm holding with one brokerage and I want to open an account with another and buy more of the same stock I'm already holding, is that lawful or illegal?

  • 2
    What country are you in? – quid Jul 17 '19 at 23:09
  • 1
    Questions pertaining to law require a country tag. – Chris W. Rea Jul 18 '19 at 0:30
  • After the transaction is cleared, the stocks are still registered under your name. – mootmoot Jul 18 '19 at 7:33
3

In the US, you can have as many brokerage accounts as you like and you can buy as much stock as you want, subject to 5% limit of the outstanding shares. If you own more than that, you have to file a Schedule 13D or 13G form with the SEC.

| improve this answer | |
  • 1
    OP did not disclose country. – JTP - Apologise to Monica Jul 18 '19 at 0:25
  • 5
    That's why I specified "In the US". – Bob Baerker Jul 18 '19 at 0:57
  • But... holding the same stock across multiple brokerages will likely lead to wash sale problems -- and the brokerages won't help with the paperwork if there's more than one involved. – Ben Voigt Jul 18 '19 at 3:05
  • 5
    Owning the same stock across multiple brokerages does not lead to wash sale problems. Selling a stock at a loss, regardless of where it is located and buying it back within 30 days before or after realizing that loss is what leads to a wash sale problem, whether the stock is in one account or multiple accounts. – Bob Baerker Jul 18 '19 at 3:10
  • OP hasn’t returned. I wonder if there are countries where this would even make a difference? – JTP - Apologise to Monica Jul 18 '19 at 20:05
1

There are 4 relevant entities you deal with when you buy shares through a broker:

  • the company that issued the shares - you deal with them at AGMs etc after buying their shares;
  • the share registry - keeps track of who owns which shares;
  • the stock exchange - the place where the trades happen, eg ASX; and
  • the broker - facilitates the stock exchange trades.

Each company usually has just one share registry, though some might list on more than one stock exchange. Different brokers might cover different sets of stock exchanges, though the more popular stock exchanges are likely to be covered by most brokers servicing that region.

Since you aren’t buying from the broker (they are just assisting with the purchase), it doesn’t make sense that buyers be restricted to just one broker per stock. In Australia, you can use multiple brokers for the same stock if you wish.

—-

(This is not legal or financial advice; please speak with an appropriate professional prior to making any trades.)

| improve this answer | |
  • It doesn't affect your ability to use more than one broker, but in most cases, brokers do more than "just assist with the purchase". Certainly in the UK and US, and I suspect many other places, almost all shares are not registered in the buyer's name, but in the name of a nominee (aka "street name") administered by the broker. The nominee is the "legal owner" of the shares, but records that you are the "beneficial owner". See Nominee on Investopedia. – TripeHound Jul 18 '19 at 6:53
  • I’m not sure that is common in Australia. Moneysmart.gov.au notes direct share ownership and managed fund (indirect) ownership, but while beneficial and legal ownership is recognised, the more familiar method is to use a broker-sponsored [CHESS subregister]. Brokers control movements to/from the subregister, but ownership remains with the buyer. – Lawrence Jul 18 '19 at 12:07

Not the answer you're looking for? Browse other questions tagged or ask your own question.