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I'm new to stocks. Say that I buy a piece of stock through my broker. If I understand correctly, it's listed in the stock exchange as being owned by my broker, with my name listed under "street name", like an unofficial owner.

Is it possible for me to verify with the stock exchange, independently of my stock broker, that the stock was indeed listed with my name in "street name"?

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The answer to your question is "no".

Unless you specifically ask to receive paper share certificates, then brokers will hold your shares with a custodian company in the broker's own nominee account. If you are able to receive paper certificates, then the registrar of the company whose shares you own will have a record of your name, however this is exceptionally rare these days. Using a stockbroker means that your shares will be held in the broker's nominee account.

A nominee company is a custodian charged with the safekeeping of investors’ securities. It should be a separate entity from the broker itself.

In essence, the nominee is the legal owner of the securities, while you retain actual ownership as the beneficiary.

Your broker can move and sell the securities on your behalf – and gets to handle all the lovely paperwork – but the assets still belong to you. They can’t be claimed by the broker’s creditors if things get messy.

The main reason for this kind of set-up is cost, and this is why brokers are able to offer relatively low dealing costs to their clients.

You can, if you wish, ask your broker for an account that deals with paper share certificates. However, few brokers will offer such an account and it will mean that you incur much higher dealing costs and may mean that you cannot sell you shares without first submitting the paper certificates back to your stock broker.

Note that the stock exchange plays no role in recording ownership. Nor does your broker's account with the clearing house.

  • And I don't think actual paper shares exist or are issued for most public companies at this point... – quid Oct 22 '16 at 17:31
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    @quid I think you are probably right. I suggested this possibility because friends of mine seem to hold paper certificates that they have inherited from late relatives. They receive dividends directly from the company. Also, here in Canada, many ETF providers (an probably Mutual Fund providers) allow you to purchase directly from them, so they would obviously have a record of your name and address. But yes, the whole paper certificate world seems decidedly arcane in this day and age and I suspect that most brokers would not offer such a service any more. – user41790 Oct 22 '16 at 17:38
  • I haven't not a new paper stock certificate, and I've been meaning to convert it into electronic form for convenience -- much as I love the engraving on certificates. – keshlam Oct 22 '16 at 17:56
  • Sigh. Touchscreens and failure to proofread... That should have said "I have one ." I have no idea how it got messed up that badly. – keshlam Oct 22 '16 at 18:10
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"Street name" is not what you think it is in the question. The broker is the owner in street name. There is no external secondary owner information.

I don't know if there is available independent verification, but if the broker is in the US and they go out of business suddenly, you can make a claim to the SIPC.

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