Paper securities have a certain charm, and those
that are elaborately designed or have historical significance can be
valuable as collectors' items. But from a practical perspective, book-entry
ownership offers many benefits.
You won't have to worry about securing
your paper certificates in a safe or safe deposit box.
Your securities can be traded more easily
and with fewer delays, since you don't have to sign and deliver the
certificates before a sale can be completed. Not only will you
receive sale proceeds more rapidly, but there's less risk that you'll
miss a market opportunity because of delays associated with handling
physical certificates.
You'll receive a periodic statement of holdings
that provides a clear accounting and audit trail of assets. This also means
that assets are less likely to get lost or abandoned.
Because book entry is the standard for most types of securities, including mutual funds and Treasurys, it will facilitate recordkeeping across your portfolio.
Book entry registration reduces the potential for securities fraud, and the associated costs.
Benefits of street name ownership
In addition to the benefits of book-entry ownership, there are some extra benefits of holding securities in street name, or nominee name:
An important distinction
If you hold securities in street name, you'll receive
regular consolidated account statements from your
broker showing all activity related to your investments
through that broker. This isn't the case if you register
your securities on the issuer's books. In DRS, you'll
receive separate statements and other materials
from each issuer at different times.
