Holder of Record

A holder of record is a person or entity whose name appears on the books of a company as the owner of a security. This is in contrast to a beneficial owner, who may not have their name on the books but still has legal ownership of the security.

There are a few reasons why a person or entity may not be the holder of record for a security. For example, a security may be held in a brokerage account, in which case the brokerage firm is the holder of record. Or, a security may be held in a trust, in which case the trustee is the holder of record.

The holder of record is important because they are the person or entity who is entitled to receive dividends, voting rights, and other benefits associated with the security. If a security is transferred, the holder of record is also the person or entity who is responsible for updating the company's records.

In some cases, the holder of record may not be the same person as the beneficial owner. This can happen when a security is held in a nominee account. A nominee account is an account that is held by a broker or other financial institution on behalf of another person. In this case, the broker or financial institution is the holder of record, but the beneficial owner is the person who actually owns the security.

The distinction between a holder of record and a beneficial owner is important because it can affect the rights and responsibilities associated with owning a security. For example, the holder of record is the person who is entitled to receive dividends, voting rights, and other benefits associated with the security. However, the beneficial owner may be responsible for paying taxes on the income generated by the security.

It is important to understand the difference between a holder of record and a beneficial owner in order to make informed decisions about your investments. If you are not sure who the holder of record is for your securities, you can contact your broker or financial institution.