Brokerage firms, banks, transfer agents and corporations have procedures in place to help investors replace lost
or stolen stock certificates.
If your securities certificate is lost, accidentally destroyed, or stolen, you should immediately contact the
transfer agent and request a "stop transfer" to prevent ownership of the securities from being
transferred from your name to another’s. Your broker may be able to assist you with this process and the broker or
transfer agent will report the certificates as missing to the SEC's lost and stolen securities program. If
you later find the missing certificate, you should notify whomever you called to place the "stop transfer" so that
the lost or stolen securities report may be removed. Otherwise, you may have difficulty selling the securities.
If you are expecting a certificate through the mail and it doesn't arrive, you should immediately contact the
organization that arranged the transaction - typically your brokerage firm. While many companies choose to
use registered or certified mail to deliver securities certificates to individuals, some prefer to use regular mail
so as not to call attention to the potential value of the item.
Replacing Securities Certificates
You can get a new certificate to replace the missing one. However, before issuing a new certificate,
corporations usually require the following:
The owner must state all the facts surrounding the loss in an affidavit;
The owner must buy an indemnity bond to protect the corporation and the transfer agent against the
possibility that the lost certificate may be presented later by an innocent purchaser. The bond usually costs
between two or three percent of the current market value of the missing certificates; and
The owner must request a new certificate before an innocent purchaser acquires it.
We recommend that you keep a copy of both sides of your certificates separate from the certificates
themselves. If a certificate is lost or stolen and then transferred on the books of the transfer agent to
another owner, it may be impossible for you to establish that you owned it because the transfer agent will no
longer have a record of your name. But if you have a record of the certificate numbers, the transfer agent
should be able to reconstruct when it was transferred and to whom.
Securities certificates are valuable and should be safeguarded. To avoid the cost and burden of
safeguarding certificates, some investors let their brokerage firm hold their securities for them in
“street name”. And increasingly, certificates for many securities are not even available, as
companies may use direct registration “book entry” securities where your ownership is
reflected on the books of a company. For more information on how investors can hold securities, please see
our publicationHolding Your Securities - Get the Facts.
Note: In this article I have integrated the
exact content of the original source, to be certain that this information is retained. If you would like to read
this article on the website of the original publisher I recommend you to click the source link below.
Jeroen Snoeks is the founder of UndervaluedEquity.com, a website for
investors passionate about investing in undervalued stocks. ThroughUndervaluedEquity.com, he shares his
experience and knowledge and will soon reveal his personal stock portfolio.