What is a Street Name? A Comprehensive Legal Overview
Definition & Meaning
The term "street name" refers to a method of holding securities in the name of a brokerage firm rather than the individual investor. This arrangement allows investors to benefit from the services of their broker while maintaining a record of ownership. The brokerage firm acts as the custodian of the securities, ensuring they are safeguarded and managed effectively. Investors receive account statements detailing their holdings, but they do not receive physical certificates for their securities.
Legal Use & context
Street name registration is commonly used in the context of securities trading and investment. It is particularly relevant in areas of finance and investment law. This arrangement is often utilized by investors who buy securities on margin or prefer the convenience of having their securities managed by a brokerage. Users can manage their investments using legal forms and templates provided by services like US Legal Forms.
Real-world examples
Here are a couple of examples of abatement:
Example 1: An investor purchases shares of a company through a brokerage firm. The shares are held in street name, meaning the brokerage's name appears on the official records, but the investor retains beneficial ownership. The investor receives quarterly statements detailing their holdings.
Example 2: An investor who wants to trade options may find it easier to do so if their securities are held in street name, allowing for quicker transactions through their brokerage. (hypothetical example)