In finance, “street name” means your brokerage firm is listed as the registered owner of your stocks or bonds on the issuing company’s books, while you remain the beneficial owner entitled to every dividend, price gain, and vote those shares carry.1U.S. Securities & Exchange Commission. Street Name Almost every share bought through an online brokerage today is held this way. Your account statement, not a certificate with your name on it, is your proof of ownership.
How Street Name Registration Works
When you buy a security through a broker, the firm registers it in its own name or in the name of a nominee rather than yours. This lets trades settle electronically in seconds instead of waiting for a company’s transfer agent to update ownership records one investor at a time.
Behind the scenes, a central clearinghouse called the Depository Trust Company (DTC) keeps electronic book-entry records of who holds what. Securities deposited with DTC are registered to its nominee, Cede & Co., which acts as the legal holder for participating brokerages.2DTCC. Deposits Service Guide Your brokerage then keeps its own records showing which slice of those holdings is yours. Three layers, in effect: the company’s shareholder list shows Cede & Co., DTC’s records show your brokerage, and the brokerage’s records show you.
Your broker is required to send you an account statement at least quarterly listing everything held on your behalf.3Investor.gov. Investor Bulletin: Holding Your Securities That statement is your primary evidence of beneficial ownership. Keep them. They matter for taxes, estate planning, and any dispute over what you owned and when.
Legal Owner Versus Beneficial Owner
Street name splits ownership into two layers. The brokerage, through Cede & Co. at DTC, is the legal or registered owner whose name sits on the issuing company’s shareholder list. You are the beneficial owner, meaning you hold every economic right: price appreciation, dividends, interest, and the ability to sell whenever you want.1U.S. Securities & Exchange Commission. Street Name
The distinction matters because the issuing company usually doesn’t know your name. It sees the brokerage. Your broker is the link that collects your dividends, forwards corporate communications, and passes your votes to the company.
What Rights You Still Have
Holding shares in street name does not shrink your rights as an investor. Your broker handles the mechanics; the entitlement is yours.
Dividends and Interest
Your brokerage collects every dividend and interest payment from the issuing company and credits it to your account. A quarterly dividend of $0.50 per share on 200 shares puts $100 in your account. The broker moves the money; the money belongs to you.
Voting and Proxy Materials
SEC rules require your broker to forward proxy statements, annual reports, and other corporate communications so you can participate in shareholder votes. The materials must go out within five business days of the broker receiving them from the company.4eCFR. 17 CFR 240.14b-1 – Obligation of Registered Brokers and Dealers in Connection With the Prompt Forwarding of Certain Communications to Beneficial Owners You cast your vote through your broker’s platform or by returning a voting instruction form, and the broker submits it on your behalf.
One thing to know: if you don’t return instructions, your broker can sometimes vote on routine matters like ratifying an auditor, but generally cannot vote on contested items such as board elections or executive pay without direction from you.
Corporate Actions
When a company announces a stock split, merger, or tender offer, your broker processes it on your behalf. Mandatory events like splits happen automatically in your account. For voluntary events, the broker notifies you of the deadline and submits your instructions to the transfer agent.
Privacy: NOBO or OBO
Because the issuing company can’t see your name on its shareholder list, it can ask your broker to identify beneficial owners so it can communicate directly. By default, you are a non-objecting beneficial owner (NOBO), and the company can request your name, address, and share position from your broker.4eCFR. 17 CFR 240.14b-1 – Obligation of Registered Brokers and Dealers in Connection With the Prompt Forwarding of Certain Communications to Beneficial Owners
If you’d rather keep your details private, contact your brokerage and ask to be classified as an objecting beneficial owner (OBO). The company then cannot obtain your identifying information, and all communications route through your broker. Your economic rights are unaffected.
What Happens if Your Broker Fails
Since your broker is the registered owner, it’s fair to ask what happens if that broker goes under. The Securities Investor Protection Act created the Securities Investor Protection Corporation (SIPC) for exactly this situation. If a member broker becomes insolvent, SIPC steps in to return the securities and cash in your account.
SIPC coverage runs up to $500,000 per customer, with a $250,000 cap on the cash portion of that claim.5Office of the Law Revision Counsel. 15 USC 78fff-3 – SIPC Advances The point is to restore your portfolio, returning the actual securities you owned rather than a dollar figure representing them.
SIPC is narrower than many investors assume. It doesn’t cover:
- Market losses. If your stocks fell in value before the firm failed, SIPC does not top up the difference.
- Commodities and futures contracts, which are not securities.
- Accounts at firms that are not SIPC members.
SIPC is not FDIC insurance. FDIC guarantees a deposit balance at a bank. SIPC ensures you get your securities and cash back from a failed broker’s estate, whether those investments have risen or fallen.6SIPC. What SIPC Protects
Margin Accounts and Share Lending
If you open a margin account, one that lets you borrow from your broker to buy securities, you typically agree in the margin agreement that the broker may lend some of your shares to other market participants, including short sellers. Federal rules require brokers to keep full possession or control of your fully paid securities (shares you own outright with no borrowed funds), but shares supporting a margin loan can be pledged or lent up to 140 percent of your outstanding loan balance.7eCFR. 17 CFR 240.15c3-3 – Customer Protection – Reserves and Custody of Securities
Share lending has a tax wrinkle. When your shares are out on loan and the company pays a dividend, you receive a substitute payment (also called a payment in lieu of dividends) rather than an actual dividend. The IRS treats substitute payments as ordinary income reported on Form 1099-MISC, not as qualified dividends eligible for lower tax rates.8Internal Revenue Service. Publication 550 (2024), Investment Income and Expenses If you hold dividend-paying stocks and want to preserve the qualified-dividend rate, ask your broker to hold your shares in a cash account rather than a margin account. Shares in a cash account cannot be lent out.
If You Don’t Want Street Name
Direct Registration System
The Direct Registration System (DRS) lets you appear directly on the issuing company’s shareholder records without a paper certificate. Under DRS, the company’s transfer agent registers you as the direct owner in electronic book-entry form.9DTCC. Direct Registration System (DRS) The shares sit outside your brokerage, so the broker cannot lend them and they are not part of the street name system.
DRS shares can be transferred back to a broker when you’re ready to sell, though the process takes longer than selling shares already in street name. Some brokerages charge a fee to move shares into DRS, so check the fee schedule first. Dividends on DRS-held shares go to you directly from the company, by check or electronic deposit.
Physical Stock Certificates
You can still request a paper certificate with your name printed on it, though many companies have stopped issuing them and brokers that will still process the request typically charge a fee. Paper certificates create practical headaches: to sell, you have to deposit the certificate back into a brokerage account, adding processing time, and lost or damaged certificates trigger costly replacement procedures. For most investors, DRS delivers the same direct-registration benefit without the paper.