From: McAldon International Inc. <mcaldon@igc.apc.org>
Newsgroups: misc.invest
Date: 23 Dec 92 00:05 PST
Subject: Re: street name vs delivery
Nf-ID: #R:22DEC199211174469@csa2.lbl.gov:1901074285:cdp:1426500311:000:3060
Nf-From: cdp.UUCP!mcaldon    Dec 23 00:05:00 1992


|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.

IMHO, this is one way a deep discount broker cuts costs.  On the other 
end of the price scale, full-service brokers send you all the reports
and proxies issued.  Not all companies issue the full complement of
reports, I've found.
                    
|So now I'm considering taking delivery of the certificates and weighing the 
|pros and cons.  I'm wondering about the incoonvenience of having to send the
|certificates in when I sell.  Are you supposed to send them certified mail?
|(If so, that would mean going to the post office every time I sold a stock.
|This is much more inconvenience than just dropping the certificates in a mail
|box.)  Has anyone ever had any problem if they didn't use certified mail?

I took delivery for years and it's a big nuisance unless the broker has a
nearby office where you can drop them off.  Otherwise the usual precaution
is to send the ctf. and an executed stock power in separate mailings.  I
don't know current law but at one time losing a ctf. was a huge bother. But
I don't believe brokers use certified mail for ctfs.
           
|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?

I never lost one but I think years ago you had to post a bond to get
a ctf. replaced.

I've identified the following pros and cons for deciding whether to take
delivery of stock certificates.

|pros:  * more timely dividends 
                
The dividends should arrive at the brokerage at least as quickly as in
your mail box. I presume you're referring to delay from the broker to you.

|       * quarterly and annual reports

         see above

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

         This is certainly true.  Another advantage is that having the ctfs.
on hand allows you to start a DRIP.
             
|cons:  * inconvenience of sending certificates back in
|       * risk of losing certificates
|       * securities cannot be margin collateral
|
|Does you know of any others?

        No.

|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?
|Aaron "hates these life or death decisions :)" Schindler

I wouldn't deal with a broker who treated me like this.  DMcKenzie

|    mcaldon@igc.org     | Opinions dispensed herein not guaranteed |
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