Listen to a Business English Dialogue About Street name
Arthur: Hi Nova, have you heard about street name in finance?
Nova: Yes, I think it refers to holding securities in the name of a brokerage firm rather than in the investor’s name.
Arthur: That’s correct. When securities are held in street name, the brokerage firm manages them on behalf of the investor.
Nova: Why would someone choose to hold securities in street name?
Arthur: Holding securities in street name offers convenience, as the brokerage firm can handle tasks like buying, selling, and transferring securities without the investor needing to handle physical certificates.
Nova: Are there any risks associated with holding securities in street name?
Arthur: One risk is that the investor might lose certain rights associated with physical ownership, such as voting rights at shareholder meetings, depending on the agreement with the brokerage firm.
Nova: Can investors still receive dividends and interest if securities are held in street name?
Arthur: Yes, dividends and interest payments are typically credited to the investor’s brokerage account when securities are held in street name.
Nova: What happens if the brokerage firm goes bankrupt?
Arthur: Securities held in street name should be protected from the brokerage firm’s creditors, but there may be delays or complications in transferring them to another firm.
Nova: Is it possible to switch from holding securities in street name to having them registered in the investor’s name?
Arthur: Yes, investors can usually request to have their securities transferred into their own name if they prefer physical ownership.
Nova: Thanks for explaining, Arthur. Holding securities in street name seems like a convenient option for many investors.
Arthur: Absolutely, Nova. It offers flexibility and ease of management, but it’s essential for investors to understand the implications and risks involved.
