A registered holder is the owner of a share or debt instrument, and corporations must track owners for administrative purposes. Owners may have rights such as voting and dividend distributions. The record date determines who is entitled to a dividend, and a share must be purchased two days prior to qualify. A record holder can be an individual or business entity, and unregistered securities are called bearer certificates.
A registered holder is the registered owner of a share or a debt instrument, such as a bond. Corporations must keep track of the owners of their securities for various administrative purposes. Some securities are callable, which means that the issuing company can demand their return. Others may have restrictions associated with their portability. In such cases, the issuer must be able to communicate with the owner.
The owner of the securities may be entitled to certain rights related to your investment. These rights may include voting on corporate matters, dividend and interest distributions, as well as routine corporate communications. Depending on the specific type of security involved, the issuing corporation or an independent registry company may maintain the registry of owners. Again, the ability to find the record holder is critically important.
Common shares trade regularly from one owner to another, which can create a problem if a dividend is due during the transfer period. When stocks are traded, the final transfer of ownership can take several days. The question is whether the buyer or seller is entitled to receive a dividend or proceeds from a stock split during this liquidation period. The United States Securities and Exchange Commission rules settle the issue by mandating that corporate directors specify a record date when declaring a dividend. Holders of record on that date are entitled to the dividend.
To qualify as a record holder, the share must be purchased at least two business days prior to the record date. This last day to earn the dividend is called the ex-dividend date. The registration date is usually not the purchase date; it is simply the time when ownership is established for distribution purposes.
A record holder can be an individual or a business entity, and the name of the holder is usually listed on the stock or bond certificate. He or she could simply be a custodial owner, such as when the beneficial owner is a minor or when a broker holds a security on behalf of a client. Securities may also be completely unregistered, in which case there is no record holder to be noted by the registrar or listed on the certificate. Such unregistered securities are called bearer certificates, and whoever owns them can trade in them or receive any beneficial distribution due. Record holders may also be referred to as record owners or record shareholders/shareholders.
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