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 publication Holding 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.
You may also want to read...
- Mining Companies Analysis - Learn How to Invest in Mining Stocks. To execute your own mining companies analysis, I have created a lot of (sub)pages about the relevant terminology and working methods from the mining sector.
- Oil and Gas Companies Analysis - How to Invest in Energy Stocks. I created different pages about the relevant terminology and working methods from the energy sector to conduct your own analysis for oil and gas companies.
- Understanding the Stock Market - How Do Stocks Work. To help you with understanding the stock market, I have created some articles to explain how stocks work and I also reveal my own stock market analysis in this chapter.
- How to Invest in Shares - Learn How to Start Investing in Stocks. In this chapter I inform you how to invest in shares - the UndervaluedEquity.com way. I also reveal which (free) resources I use to execute my due diligence.
- How I Invest in Stocks - My Preconditions for Selecting Undervalued Stocks. In this chapter I answer the question: how do I invest in stocks? Thus, I explain which investment rules I follow whilst selecting companies for my stock portfolio.
- Stock Investment Analysis - A More Detailed Elaboration on How to Buy Stocks. When a company complies with my preconditions for selecting undervalued stocks, I will elaborate my stock investment analysis to assess the quality of it's assets, management, etc.
If my articles are helpful to you, please consider supporting my work by making a small donation...