From: ask@cbnews.cb.att.com (Arthur S. Kamlet)
Subject: Re: street name vs delivery
Organization: AT&T Bell Laboratories,  Columbus, Ohio
Date: Sat, 26 Dec 1992 22:37:43 GMT
Keywords: stocks, steet name

In article <22DEC199211174469@csa2.lbl.gov> schindler@csa2.lbl.gov writes:
>I've noticed that I very infrequently receive quarterly and annual reports 
>from Pacific Brokerage Service (PBS).  I called this morning to find out 
>whether it mattered if the securities are held in a margin account, cash 
>account or if I take delivery.  The answer is that quarterly report forwarding
>is very sporadic and it is best to take delivery of the certificates.

Other companies will forward more reports to you.

Many companies however, have stopped forwarding quarterly reports to
stockholders whose shares are in street name.  Some of them are
major Dow Jones/Fortune 500 companies, including IBM and AT&T.

However, annual reports should still be send to everyone.

Proxies should still be sent to everyone.

>certificates in when I sell.  Are you supposed to send them certified mail?

That's up to you.  Certified is safer than plain first class mail.
Registered is safer than certified.  And you could even insure
registered mail.

>(If so, that would mean going to the post office every time I sold a stock.


But first you might need to have your signature guaranteed depending
on the policy of your broker.

>What happens if a certificate is lost or stolen while in my possession.  I
>know you should have the certificate numbers recorded somewhere in case this
>happens, but how much pain is involved in replacing the certificates?

You have to purchase a bond just in case the certificate turns up.
If it really was stolen you have to agree to prosecute (and probably
post a bond too! - even though it turned up stolen!)

>I've identified the following pros and cons for deciding whether to take
>delivery of stock certificates.
>
>pros:  * more timely dividends 

I think dividends are more timely posted when held in street name.
And if you have your account linked to a brokers money market
account the dividends could get sweeped into your money market
account.

>       * quarterly and annual reports

Annual reports should come anyway.  If you think quarterly reports
are really valuable write to the company and tell them you are not
getting them and ask to be added to their list for quarterly
reports.

>       * no hassle or illiquid positions if the brokerage firm goes under

If your broker is not part of SIPC get a new broker at once.
Otherwise I think this is a negligible risk.


Another pro:  If in street name, stock splits (including messy
              reverse splits) are handled automatically.

Another pro: You get one 1099 from your broker covering all
             dividend transactions, instead of a different 1099
             from every company.  Simplifies tax information.



>For example, if I like to write calls against long stock positions, will the
>borkerage firm think I am trying to write a naked call if I don't have the
>securities on deposit with them?  Will they refuse to sell my call?

You need to have the shares covering your call in a margin account
with your broker, else this will be a naked call.

If you have sufficent collateral in your account they should accept
a naked call, if you have authorized them to do so.

(When you opened your account you authorized certain types of
transactions, usually grouped by risk.)
-- 
Art Kamlet  a_s_kamlet@att.com  AT&T Bell Laboratories, Columbus
Newsgroups: misc.invest