What are Direct Registered Shares?
Direct registered shares are a form of stock ownership that allows investors to own their shares directly through the issuer, rather than through a brokerage. This means that the investor is the registered owner of the shares, and will receive all dividends, notices, and other communications directly from the issuer. This is different from holding shares through a brokerage, where the brokerage holds the shares on the investor’s behalf.
What are the Benefits of Direct Registered Shares?
The primary benefit of direct registered shares is that it allows investors to keep better track of their investments. Since the investor is the registered owner, they are able to monitor their investments more easily and keep track of any changes or updates from the issuer. Additionally, direct registered shares provide the investor with a greater degree of control over their investments. Since the investor is the registered owner, they can choose when and how to sell or trade their shares.
Another benefit of direct registered shares is that they provide investors with greater flexibility when it comes to taxes. Since the investor is the registered owner, they are responsible for any capital gains or losses when they sell or trade their shares. This means that the investor can choose when and how to report their capital gains or losses, and can strategize accordingly.
What are the Downsides of Direct Registered Shares?
One of the primary downsides of direct registered shares is that they can be difficult to trade or sell. Since the investor is the registered owner, they usually have to go through the issuer in order to trade or sell their shares. This can be time consuming, and may require the investor to pay additional fees. Additionally, some issuers may not offer direct registered shares, which limits the investor’s ability to trade or sell them.
Another downside of direct registered shares is that they may offer fewer features than other forms of stock ownership. For example, some brokers may offer special features such as fractional share trading, which is not available when holding direct registered shares. Additionally, some brokers may offer special tools or services that are not available when holding direct registered shares.
How to Direct Register Shares
In order to direct register shares, the investor must first contact the issuer of the shares. The issuer will provide the investor with the necessary paperwork and instructions for registering the shares. Once the paperwork has been completed, the investor must send it to the issuer, along with payment for any applicable fees or commissions. Once the issuer has received the paperwork and payment, the investor will become the registered owner of the shares.
Once the investor is the registered owner of the shares, they will receive all dividends, notices, and other communications directly from the issuer. Additionally, the investor can contact the issuer directly in order to trade or sell their shares. However, the investor must be aware that they may have to pay additional fees or commissions in order to do so.
Conclusion
Direct registered shares are a great way for investors to gain greater control over their investments. They provide investors with the ability to monitor their investments more easily, as well as greater flexibility when it comes to taxes. However, they can be difficult to trade or sell, and may offer fewer features than other forms of stock ownership. If an investor is considering direct registered shares, they should carefully consider the benefits and downsides before making their decision.
Conclusion
Direct registered shares are a great way for investors to gain control over their investments, as well as greater flexibility when it comes to taxes. However, they also have their downsides, such as difficulty in trading or selling, and fewer features than other forms of stock ownership. Investors should carefully consider all of these factors before deciding if direct registered shares are the right choice for them.