Ever since physical paper certificates largely gave way to electronic stock holding, most US investors’ shares have technically not been held in their own name. Instead – as explained in the guide to brokerage account safety – shares today are usually registered ‘in nominee’ or ‘in street name’.
This means that the legal owner and the name that appears on the register of shareholders is a nominee company and not the individual buying the shares. The buyer remains the beneficial owner with rights over the shares.
However, in many cases it is possible to hold US shares electronically in your own name – a process known as direct registration. This carries two advantages that may make it useful for some investors