Pennaluna & Company is one of the few small FINRA broker dealers left that deal mostly in microcaps. Broker dealers like Pennaluna are slowly going extinct (1 in 7 left the business in the past five years) due to increased regulation and escalating costs. Pennaluna has always been on the forefront talking about issues affecting microcaps. Earlier this year I posted an informative article by them entitled, Penny Stocks Refused For Deposit, Why It’s Happening Now, How to Cope. Today I thought I’d post another article talking about Direct Registration of Shares.
Direct Registration of Shares – 10 Facts To Know
Rattled by the failures of MF Global and Peregrine Financial and jittery about the financial system, some market observers are suggesting that investors transfer stock from their brokers to company transfer agents for direct registration. The stated goal is to foil theft or misuse of shares and to protect stock ownership in case a clearing corporation goes bust or the entire economic structure collapses. The Direct Registration System (DRS) of Depository Trust Company allows eligible stock to be sent to the transfer agent and held their electronically in the owner’s name.
If you’re considering DRS, you know it is a personal decision that ultimately depends on your individual situation and viewpoint. Here are ten things to keep in mind about it. This information applies generally to most brokers who clear through major clearing firms, although specifics may vary.
The securities industry, its technology and government regulations are changing at breakneck speed. So before you make a decision, check with your broker for current requirements.
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