Efficient Holder of an Instrument E Efficient Holder of an Instrument E Efficient Holder of an Instrument Tax and regulatory considerations often make certain financial instruments unattractive to some potential users. Dividend withholding taxes often make foreign investors inefficient holders of a country's common stocks .
Some countries forbid certain investors to own some financial instruments.
Many derivative transactions are designed to place an underlying instrument in the hands of an efficient holder and the beneficial interest in other hands.