You currently only beneficially “own” your holdings when going through a broker as they are the custodian. This means your name is not associated with any ownership at all. If the broker goes tits up, good luck getting what’s owed to you and have fun with FDIC. This also means the brokers can do what they feel like with “your” shares since they’re the custodian. This is true for all your holdings when purchasing shares via a broker. Brokers make a lot of money lending your shares to the shorts for locates which in turn lowers the stock price and you get nothing in return for having your own investment used against you.
Direct Registration is putting you as the owner and companies can see who specifically owns their shares. Which means if tomorrow for some reason all brokers go tits up, it won’t matter as you have your shares registered under your name directly with the company’s transfer agent outside of a broker. This also means your shares cannot be lent out for shorting, or used as locates. It effectively removes the shares from the market while also giving publicly traded companies insight into who actually are their shareholders.
To boil this down to one simple question: Do you trust the Wall Street and the banks? If not, direct register.
When you direct register, the transfer agent will be sending the request to sell via their brokerage partners since you’ve removed the shares from the brokerage system. Computershare has a great interface that is very easy to navigate and understand. You’re essentially trading an IOU in a brokerage, for a real share of the company and being put on the company’s ownership ledger.
This is another part of the GameStop thesis. When all shares are direct registered and GameStop announces that, what happens to shares in brokerages? Since all DRS’d shares are legit and accounted for, that will expose how many synthetic shares have been sold into the market. It’s already pretty obvious something is going on considering 50% of GameStop’s the free float has already been registered.
What are the benefits of this?
You currently only beneficially “own” your holdings when going through a broker as they are the custodian. This means your name is not associated with any ownership at all. If the broker goes tits up, good luck getting what’s owed to you and have fun with FDIC. This also means the brokers can do what they feel like with “your” shares since they’re the custodian. This is true for all your holdings when purchasing shares via a broker. Brokers make a lot of money lending your shares to the shorts for locates which in turn lowers the stock price and you get nothing in return for having your own investment used against you.
Direct Registration is putting you as the owner and companies can see who specifically owns their shares. Which means if tomorrow for some reason all brokers go tits up, it won’t matter as you have your shares registered under your name directly with the company’s transfer agent outside of a broker. This also means your shares cannot be lent out for shorting, or used as locates. It effectively removes the shares from the market while also giving publicly traded companies insight into who actually are their shareholders.
To boil this down to one simple question: Do you trust the Wall Street and the banks? If not, direct register.
Thank you so much
You’re very welcome! Let me know if you have any more questions.
Will my portfolio still stay on fidelity to trade and sell them?
That’s the neat part, it won’t!
When you direct register, the transfer agent will be sending the request to sell via their brokerage partners since you’ve removed the shares from the brokerage system. Computershare has a great interface that is very easy to navigate and understand. You’re essentially trading an IOU in a brokerage, for a real share of the company and being put on the company’s ownership ledger.
This is another part of the GameStop thesis. When all shares are direct registered and GameStop announces that, what happens to shares in brokerages? Since all DRS’d shares are legit and accounted for, that will expose how many synthetic shares have been sold into the market. It’s already pretty obvious something is going on considering 50% of GameStop’s the free float has already been registered.
Does computer share charge anything? Can computer share go under and I lose all my stocks?