Ch1: Equities

When securities are transferred or sold, the … records the change in ownership on the books of the securities issuer.

transfer agent

Global Depository Receipts (GDRs) are

blank certificates issued by a bank that represent shares of a stock that are traded on a foreign stock exchange

For a cash transaction, the ex-dividend date is

the business day after the record date.

An unsponsored ADR is

created by a U.S. bank without the foreign company’s involvement, and it typically trades in the OTC market

A sponsored ADR is

issued with the cooperation of the foreign company, which provides financial information and support, and they are usually listed on major U.S. exchanges because the foreign company participates in the program

ADRs permit

domestic (US) trading of foreign stocks, only trade in the US, on US stock exchanges and OTC, and facilitate the payment of dividends in USD

For standard stock trades, the ex-dividend date is almost always … the record date

exactly 1 business day before

During events such as stock splits and stock dividends, the … is responsible for allocating the appropriate number of shares to each investor.

transfer agent

The regular-way, standard, normal settlement for stocks is

T+2 days

For regular way trades in equities, the ex-dividend date is

the record date

No-par value stock is

a stock whose shares have not been assigned a par value by the corporation, which is permitted by some states.

Voting by proxy is when

a shareholder authorizes another person to cast their votes on their behalf.

Treasury stock is stock that has been … by a corporation and has/ has no voting rights

has been issued and repurchased by a corporation and has no voting rights

Because preferred stock …, it has a lower potential for appreciation and capital gains than common stock.

pays a fixed dividend

The registrar … and makes sure there is no …

maintains records of ownership by matching each share of stock against an ownership record and makes sure there is no unauthorized stock issuance.

The ex-dividend date for a cash settled trade will be

the business day after the record date.

What does it mean when securities are held in street name?

Street name means the broker‑dealer is the registered owner on the issuer’s books while the customer is only the beneficial owner.

What is DRS?

Direct Registration System is an electronic system where shares are registered directly in the investor’s own name on the issuer’s books without a paper certificate.

DWAC is

Direct/Withdrawl at Custodian is an electronic method that lets a transfer agent move shares directly into or out of a brokerage account without using physical certificates.

If the customer is the registered owner, the issuer sends proxy materials

directly

If the broker is the registered owner (street name), the issuer sends proxy materials

to the broker, who forwards them to the investor .

… give shareholders the right, but not the obligation, to maintain proportionate share ownership, rather than be diluted when new shares are issued.

stock rights

The … is the same day as the ex-dividend date.

record date

Issuers must notify FINRA … ahead of any stock split, stock dividend, or similar corporate action.

no later than 10 days before the record date

Dividend payments order for regular way transactions:

declaration, ex-dividend, record, payable. Remember the acronym DERP.