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?
The answer in theory is yes.
The answer in reality is no. Let me explain:
- 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.
- The IRS would have records of sales that resulted in a taxable event
- 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.
- 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.
- The IRS records do not necessarily track purchases so its records are incomplete
- 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.
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.
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.
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.