Holder of Record

Holder of Record: What It Means and How It Works

Key takeaways
* The holder of record is the registered owner of a security and holds the legal rights and responsibilities of ownership.
* For stocks, the holder of record typically has voting rights and receives dividend payments. For bonds, the holder of record receives principal and interest.
* Securities are generally issued in registered form today; bearer securities are mostly obsolete.
* A registered holder is different from a beneficial owner whose holdings are held in “street name” by a broker or bank, though both have equivalent economic rights.

What is a holder of record?
The holder of record is the name listed as the legal owner of a security on the issuer’s books or in its shareholder register. That designation conveys the rights associated with the security—such as voting, dividend receipt, and receipt of interest or principal—until ownership is transferred and the register is updated.

Registered vs. bearer securities
* Registered securities: The issuer (or its transfer agent) keeps a record of the owner and sends payments and communications to that registered owner. This is the common modern practice.
* Bearer securities: Ownership was determined by physical possession of the certificate, with no central record of the owner. Bearer securities have largely been phased out because they are vulnerable to misuse.

Registered holder vs. beneficial owner (street name)
* Registered holder: The person or entity whose name appears on the issuer’s register.
* Beneficial owner: An investor whose securities are held in a brokerage account or by a nominee in “street name.” The broker or nominee is the registered holder on the books; the investor retains the economic benefits.
* In practice, beneficial owners and registered holders have the same economic and voting rights, but the mechanics differ: proxies, dividend payments, and communications may flow through the broker or nominee rather than directly to the investor.
* Some investors still prefer direct registration or physical certificates, though holding certificates is less common and can be more costly to transfer.

Shareholder register vs. shareholder list
* Shareholder register: A continuously maintained ledger recording each current shareholder’s name, address, and number of shares; it may include additional details such as occupation or purchase price. It is the authoritative record for ownership and essential for determining rights and communications.
* Shareholder list: A snapshot updated less frequently (for example, annually) and not as current as the register.

Why it matters
Being the holder of record determines who legally receives corporate communications, dividends, and notices of meetings, and who exercises voting rights. It is also the basis for resolving ownership disputes and administering corporate actions. When a security is sold, the seller ceases to be the holder of record once the issuer’s records are updated to reflect the transfer.

Summary
The holder of record is the legal, registered owner of a security and is central to how issuers identify owners for payments, voting, and communications. Most securities today are issued in registered form, but beneficial ownership via brokers (street name) is common; both arrangements confer the same economic rights, though the procedural details differ.