What is Street Name?

Brokerage or clearing firms usually hold street name titles due to the complexity of tracking each stock certificate for each individual. Almost all brokers hold securities electronically, without physical certificates.

The holding of individual titles in street name is done for several reasons, we highlight the two main reasons:

Convenience: it is much more convenient for brokers to carry securities on their behalf, as securities can be easily transferred between parties. Imagine the additional amount of work that would take place if the actions were individually on behalf of each customer. Every time the customer needed to sell shares, the broker would have to find the exact shares he owns and deliver them to the buyer, who would then have to send the shares back to the company so that the name on the certificates would be changed to the new one. owners name. By keeping bonds in street name, the broker can avoid most delays associated with the transfer of ownership and quickly settle trades.

Security: If brokers had physical security certificates, there would be an increased risk of physical damage, loss and theft. By keeping them in street name, brokers are able to retain securities electronically, effectively reducing the likelihood of any problems occurring. This security is also extended to payment security. By keeping the bonds in street name, the broker is ensuring that a bond will be delivered immediately when a transaction occurs. This eliminates any uncertainty that would exist if the customer was responsible for delivering security each time a transaction occurred.

You can read more at: FINRA – ITS YOUR STOCK, JUST NOT YOUR NAME: EXPLANING STREET NAMES