Post by fastwalker on Apr 26, 2005 19:24:48 GMT -5
s/BoSnerdley
Hi all,
I found a resource that clearly defines legal ownership vs. beneficial ownership. It's a relativelety understandable document. It has "george" in the URL, so I took that as a good sign.
www.georgesonshareholder.com/pdf/secproxy.pdf
From what I gleaned, legal ownership means basically that the shareholder has their shares in cert form.
From page 5:
"A company's share register sets forth the legal owners of that company's stock. The legal owners of the stock are commonly referred to as either the “registered” owners of the shares because the owners' names appear on the company's share register or, where there is a record date (e.g., for voting or dividend purposes), the “record” owners because they legally own the shares on the record date. Legal owners often hold share certificates which represent their ownership interests in the company."
And beneficial owners have their shares held electronically.
From page 1:
"The vast majority of publicly-traded shares in the United States are registered on companies' books not in the name of beneficial owners– i.e., those investors who paid for, and have the right to vote and dispose of, the shares– but rather in the name of “Cede & Co.”, the name used by The Depository Trust Company (“DTC”)."
The NOBO list is used to account for proxy votes from beneficial share owners:
"All information now or hereafter in the Company's possession or control, or which can reasonably be obtained from brokers, dealers, banks, clearing agencies, voting trustees or nominees, acquired pursuant to Rule 14b-1(b) and/or Rule 14b-2(b) of the Exchange Act, or otherwise, concerning the names and addresses of, and the number of shares held by, the beneficial owners of the Company's stock whose shares are held of record by brokers, dealers, banks or their nominees, including, but not limited to, any list of non-objecting or consenting beneficial owners (commonly referred to as a “NOBO” or “COBO” list, respectively), in the format of a printout and magnetic tape, each in descending balance order, dated as of the date of this demand and updated as of the Record Date."
Here's a chart from page 21 that shows how beneficial shares are counted for NOBO lists. It includes Non-objecting and Objecting Beneficial owners:
The DTC (Cede & Co.) is the legal owner of all shares held electronically, but doesn't have voting rights as I understand. It gets a little difficult here, because according to this, beneficial owners may not ever get a vote and it looks like it up to the DTC, banks, and borkers to decide:
"Street name holders, on the other hand, are not technically entitled to vote shares or grant proxy authority. Those rights reside with DTC as the legal owner of all street name shares. Because DTC has no beneficial interest in its shares, however, it has devised a mechanism to pass on its voting rights. This mechanism, called the “omnibus proxy,” provides for the transfer of DTC's voting rights to its clients– the bank and broker participants. According to DTC, “the omnibus proxy is an assignment. Cede & Co., the shareholder of record, assigns to each participant the voting rights associated with the shares in that participant’s DTC account as of the record date.” The omnibus proxy, then, confers voting authority upon bank and broker participants with respect to the shares held in their DTC accounts on the record date.. It is important to understand that, absent special circumstances, proxy authority is never transferred down to the ultimate beneficial owners."
Anyway, after all that, it appears the OBO/NOBO list appears to only include the proxy information for people with shares held electronically. Because of that, we electronic shareholders may never get a vote in company matters.
Hope this info is useful,
Bo
****The above information includes my interpretation of what I read and could very well be mistaken in areas. So look it up and see for yourself if you agree. I welcome any comments/criticism of my interpretation.
cmkxdiamond.proboards32.com/index.cgi?board=general&action=display&thread=1114551697
Hi all,
I found a resource that clearly defines legal ownership vs. beneficial ownership. It's a relativelety understandable document. It has "george" in the URL, so I took that as a good sign.
www.georgesonshareholder.com/pdf/secproxy.pdf
From what I gleaned, legal ownership means basically that the shareholder has their shares in cert form.
From page 5:
"A company's share register sets forth the legal owners of that company's stock. The legal owners of the stock are commonly referred to as either the “registered” owners of the shares because the owners' names appear on the company's share register or, where there is a record date (e.g., for voting or dividend purposes), the “record” owners because they legally own the shares on the record date. Legal owners often hold share certificates which represent their ownership interests in the company."
And beneficial owners have their shares held electronically.
From page 1:
"The vast majority of publicly-traded shares in the United States are registered on companies' books not in the name of beneficial owners– i.e., those investors who paid for, and have the right to vote and dispose of, the shares– but rather in the name of “Cede & Co.”, the name used by The Depository Trust Company (“DTC”)."
The NOBO list is used to account for proxy votes from beneficial share owners:
"All information now or hereafter in the Company's possession or control, or which can reasonably be obtained from brokers, dealers, banks, clearing agencies, voting trustees or nominees, acquired pursuant to Rule 14b-1(b) and/or Rule 14b-2(b) of the Exchange Act, or otherwise, concerning the names and addresses of, and the number of shares held by, the beneficial owners of the Company's stock whose shares are held of record by brokers, dealers, banks or their nominees, including, but not limited to, any list of non-objecting or consenting beneficial owners (commonly referred to as a “NOBO” or “COBO” list, respectively), in the format of a printout and magnetic tape, each in descending balance order, dated as of the date of this demand and updated as of the Record Date."
Here's a chart from page 21 that shows how beneficial shares are counted for NOBO lists. It includes Non-objecting and Objecting Beneficial owners:
The DTC (Cede & Co.) is the legal owner of all shares held electronically, but doesn't have voting rights as I understand. It gets a little difficult here, because according to this, beneficial owners may not ever get a vote and it looks like it up to the DTC, banks, and borkers to decide:
"Street name holders, on the other hand, are not technically entitled to vote shares or grant proxy authority. Those rights reside with DTC as the legal owner of all street name shares. Because DTC has no beneficial interest in its shares, however, it has devised a mechanism to pass on its voting rights. This mechanism, called the “omnibus proxy,” provides for the transfer of DTC's voting rights to its clients– the bank and broker participants. According to DTC, “the omnibus proxy is an assignment. Cede & Co., the shareholder of record, assigns to each participant the voting rights associated with the shares in that participant’s DTC account as of the record date.” The omnibus proxy, then, confers voting authority upon bank and broker participants with respect to the shares held in their DTC accounts on the record date.. It is important to understand that, absent special circumstances, proxy authority is never transferred down to the ultimate beneficial owners."
Anyway, after all that, it appears the OBO/NOBO list appears to only include the proxy information for people with shares held electronically. Because of that, we electronic shareholders may never get a vote in company matters.
Hope this info is useful,
Bo
****The above information includes my interpretation of what I read and could very well be mistaken in areas. So look it up and see for yourself if you agree. I welcome any comments/criticism of my interpretation.
cmkxdiamond.proboards32.com/index.cgi?board=general&action=display&thread=1114551697