Uncertified shares are mutual fund shares without paper certificates. Proof of ownership is kept with the transfer agent. They carry the same legal rights as certified shares and can be traded and purchased easily. They cover many types of investments and are preferred by some investors for their simplicity.
Uncertified shares are mutual fund shares that are recorded as shareholder ownership. However, paper share certificates are not issued. In lieu of a share certificate, proof of ownership of the uncertified shares is kept on file with the transfer agent who handled the purchase transaction.
An uncertified action carries the same legal rights and privileges as any action that is documented with a formal certificate. The owner of non-certified shares can trade the shares at will, as well as purchase additional shares of the same stock. Proof of share ownership can always be obtained by requesting documentation from the transfer agent. In addition, the brokerage house that maintains the portfolio for the investor will also be able to document the current value of the shares, based on the last trading activity.
The issuance of non-certified shares covers many different types of investments. Also known in some circles as book shares, stock shares can represent nearly every classification of stock available on the market today, including shares that are issued as part of retirement plans or employee stock ownership plans. . The book stock has long been a common tool within the investment market and derives its name from the fact that the broker’s or agent’s records establish valid ownership of the shares.
Whether an investment is represented by a certificate or by an item in the financial records, the shared ledger will trade with the same level of ease. Investors wishing to purchase non-certified shares may do so without additional effort. In fact, many investors prefer to purchase non-certified shares for the simple reason that there is less paperwork to maintain. Brokers and other financial advisors can help new investors find potentially profitable investments that are represented by non-certified stocks, as well as explain the benefits of this approach.
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