When I buy a smartphone in a store, I buy it and it is mine. From that point on, apart from the guarantee they may offer, the store has nothing to do with it, the buy is finished and it is over. Is it the same with the shares?

  1. If I buy shares of an iShares product for example, is it really between me and Blackrock or the broker is necessary and continues to play his role as an intermediate entity?
  2. Can I sell my shares through another broker if I want to?
  3. Do I have an email proof or letter sent by Blackrock?

I am asking this question since we are living in this electronic age where there are no papers and I do not know if there is a proof of the shares I have bought other than the information held by the broker.

2 Answers 2


I have been careful here to cover both shares in companies and in ETFs (Exchange Traded Funds). Some information such as around corporate actions and AGMs is only applicable for company shares and not ETFs.

The shares that you own are registered to you through the broker that you bought them via but are verified by independent fund administrators and brokerage reconciliation processes. This means that there is independent verification that the broker has those shares and that they are ring fenced as being yours. The important point in this is that the broker cannot sell them for their own profit or otherwise use them for their own benefit, such as for collateral against margin etc..

1) Since the broker is keeping the shares for you they are still acting as an intermediary.

In order to prove that you own the shares and have the right to sell them you need to transfer the registration to another broker in order to sell them through that broker. This typically, but not always, involves some kind of fee and the broker that you transfer to will need to be able to hold and deal in those shares. Not all brokers have access to all markets.

2) You can sell your shares through a different broker to the one you bought them through but you will need to transfer your ownership to the other broker and that broker will need to have access to that market.

3) You will normally, depending on your broker, get an email or other message on settlement which can be around two days after your purchase. You should also be able to see them in your online account UI before settlement. You usually don't get any messages from the issuing entity for the instrument until AGM time when you may get invited to the AGM if you hold enough stock. All other corporate actions should be handled for you by your broker.

It is rare that settlement does not go through on well regulated markets, such as European, Hong Kong, Japanese, and US markets but this is more common on other markets. In particular I have seen quite a lot of trades reversed on the Istanbul market (XIST) recently. That is not to say that XIST is unsafe its just that I happen to have seen a few trades reversed recently.

  • 1
    Once upon a time, shares were actual pieces of paper that either the broker held for the client, or delivered to the skeptical client who demanded to hold them himself or herself in a safe-deposit box or a file cabinet or under the mattress. In the latter situation, selling shares required delivering the shares to a broker with instructions to sell, and the owner got to select which pieces of paper were delivered to the broker. If the broker was holding the shares, the owner would send instructions to sell, and tell the broker which shares to sell. If the owner did not say which shares,.... Nov 6, 2017 at 15:32
  • continued... the default was First-In First Out; the earliest-bought shares were the first to be sold. Nov 6, 2017 at 15:33

Ditto to MD-Tech, but from a more "philosophical" point of view:

When you buy stock, you own it, just like you own a cell phone or a toaster or a pair of socks that you bought.

The difference is that a share of stock means that you own a piece of a corporation. You can't physically take possession of it and put it in your garage, because if all the stock-holders did that, then all the company's assets would be scattered around all the stock-holder's garages and the company couldn't function. Like if you bought a 1/11 share in a football team, you couldn't take one of the football players home and keep him in your closet, because then the team wouldn't be able to function. (I might want to take one of the cheerleaders home, but that's another subject ...)

In pre-electronic times, you could get a piece of paper that said, "XYZ Corporation - 1 share". You could take physical possession of this piece of paper and put it in your filing cabinet. I'm not sure if you can even get such certificates any more; I haven't seen one in decades. These days it's just recorded electronically. That doesn't mean that you don't own it. It just means that someone else is keeping the records for you. It's like leaving your car in a parking lot. It's still your car. The people who run the parking lot doesn't own it. They are keeping it for you, but just because they have physical possession doesn't make it theirs.

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