Book-Entry Securities and Registration
Chapters in this video
- 0:00 The modern market: no paper certificates exist
- 1:29 DTC as vault and the Cede & Co. exam trap
- 2:45 NSCC as central counterparty and Continuous Net Settlement
- 5:01 Street name: broker is registered owner, customer is beneficial
- 6:05 Direct Registration System: name on books, zero paper
- 7:27 Transfer agent versus registrar: the most tested swap trap
- 9:02 Rapid-fire exam recap
What this video covers
- How book-entry settlement works and why physical certificates have been virtually eliminated
- The role of the Depository Trust Company (DTC) as central securities depository, including immobilization and the Cede & Co. nominee name
- The role of the National Securities Clearing Corporation (NSCC) as central counterparty using Continuous Net Settlement (CNS)
- The DTCC parent-subsidiary relationship and the exam traps that swap DTC and NSCC functions
- Street name registration: broker-dealer as registered owner, customer as beneficial owner, and the resulting obligations for proxy materials and dividends
- The Direct Registration System (DRS): customer name on issuer's books with no physical certificate
- Bearer form: eliminated for new issues due to tax-reporting requirements
- The strictly distinct roles of transfer agents (ownership changes) versus registrars (preventing over-issuance)
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