A registrar keeps track of the owners of securities, such as stocks and bonds, for administrative purposes. The owner may have certain rights, including voting and receiving dividends. The record holder is entitled to dividends on the record date, which is two business days after the purchase date. Record holders can be individuals, corporations, or custodians, and unregistered securities are called bearer certificates.
A registrar is the registered owner of a stock or debt instrument, such as a bond. Corporations need to keep track of the owners of their securities for various administrative purposes. Some securities are callable, which means that the issuing company can request their return. Others may have limitations on their portability. In such cases, the issuer must be able to communicate with the holder.
The owner of the securities may have certain rights relating to his investment. These rights may include voting on corporate matters, distribution of dividends and interests, as well as routine business communications. Depending on the specific type of security in question, the owners’ registration could be maintained by the issuing company itself or by an independent registrar. Again, the ability to find the record holder is of paramount importance.
The common stock is swapped regularly from one owner to another, which can create a problem if a dividend is due during the transfer period. When shares trade, the final transfer of ownership can take several days. The question then is whether the buyer or seller is entitled to receive a dividend or the proceeds of a stock split during this liquidation period. U.S. Securities and Exchange Commission rules address this by requiring company administrators to specify a record date when declaring a dividend. Holders registered on that date are entitled to the dividend.
To qualify as a record holder, the title must be purchased at least two business days prior to the record date. This last day for earning the dividend is called the ex-dividend date. The posting date is not normally the purchase date; it is simply the time when ownership is established for distribution purposes.
A record holder could be an individual or a corporate entity, and the holder’s name is normally listed on the stock or bond certificate. It could simply be a custodian, such as when the beneficial owner is a minor or when a security is held by a broker on behalf of a client. Titles can also be completely unregistered, in which case there is no record holder who must be noted by the registrar or named on the certificate. Such unregistered securities are called bearer certificates and anyone who holds them can exchange them or receive any lucrative distributions due. Record holders could also be referred to as record owners or record shareholders/shareholders.
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