In Street Name

Securities held in street name are held electronically in the name of a broker or other nominee, instead of the name of the true beneficial owner.

Today, virtually all securities are held electronically in street name, on behalf of the customer. Not having to register securities in the customer’s name, and match up each stock certificate to each customer, has made electronic trading possible – and given small investors access to derivatives such as warrants and contracts for difference and enabled them to buy shares on margin.

Holding securities in street name does not diminish the beneficial owner's rights. It has facilitated speedy trading and trade settlement and reduced the risk of loss and theft that the physical transfer of stock certificates would entail. By lowering transaction costs, the street name convention has helped to lower commissions and boosted investment returns.

Although holding securities in street name is the norm, some investors still prefer to hold physical certificates in their name. Because it is more expensive to transfer ownership this way, brokers will charge a higher rate for the inconvenience.