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An Automated Primer For First Time Investors

Location: Blogs Bob O'Brien's Sanity Check Blog    
Posted by:   bobo 8/14/2006 1:11 PM

If you haven't seen it, you need to check out the latest Stock Market Primer from http://special.youstockit.com/SM1.swf

It's really remarkably simple and straightforward, and filled with lots of helpful tips for novice and experienced investors alike.

Take out a few moments and give it a viewing.

It really speaks for itself.
Copyright ©2006 Bob O'Brien
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Comments (11)
Re: An Automated Primer For First Time Investors By davidn on 8/14/2006 1:31 PM
http://www.dtcc.com/Publications/dtcc/jul06/certificateless.html
Re: An Automated Primer For First Time Investors By davidn on 8/14/2006 1:33 PM
New SEC rule

The transfer agents say part of their job is to help position companies for a proposed Securities and Exchange Commission (SEC) rule change that would make DRS a requirement for listing with the New York Stock Exchange, Nasdaq and the American Stock Exchange.

Under the rule change requested by the three organizations, newly listed issues coming to market on or after January 1, 2007, would be required to be DRS-eligible on the first day of trading. Existing listed issues would have to migrate to DRS by January 1, 2008.

“We’re working with our clients to help ready them for the change,” said De La Torre. And Zimmer added, “Many of them want to be ahead of the game when it comes to DRS.”
Re: An Automated Primer For First Time Investors By davidn on 8/14/2006 1:52 PM
If the shares are registered in the name of the shareholder or brokerage at the TRANSFER AGENT, that could be a good thing. It beats the heck out of a chain of beneficial owners.

On the other hand, if they are registered in the name of Cede & Co. first, then how do we know that DRS is a real share?

Can someone knowledgable comment on this new system?

My instinct is that someone doesn't want us to pull certs.
Re: An Automated Primer For First Time Investors By rtway1 on 8/14/2006 2:16 PM
David' I am amazed at how my local bank can send me a picture of my cancelled check instead of the old fashioned way of sending the physical check. The purpose for this post is to bring up a couple of interesting thoughts. In these days of the super computer most any of these transactions are as easy to record as hunting down someones DNA. Therefore if a stock is bought and purchased and they (DTCC) or (CEDE) are in charge of the recording of the ownership why could they not do the same as the bank does with cancelled checks. There would have to be accessibility by the share owner to see his or her share certificate and cusip number and print it out for their records. This would also be proof that in fact that this certificate exist and would also be proof in a court of law. If this DRS goes through I would think that the ability to track that cusip# would be no problem if it were lent out. Also the owner of the stock should be able to see if his or her shares were lent out. I would also think that at the click of a button these entities could see if there were shares available to lend thus ending x clearing and mm's power to create imaginary shares. I know this sounds to simple but I feel that if nothing else there adds one more item of evidence if litigation occurs, or when litigation occurs.
Re: An Automated Primer For First Time Investors By davidn on 8/14/2006 2:20 PM
"The receiving institution validates the information and responds with a deliver order through DRS that directs DTC to make the appropriate updates to the investor's securities holdings."

I can't quite understand their gobbledy gook.

Does this mean the update is made to the company shareholder list (GOOD!) or to the DTC beneficial holder list (BAD!)?

The former would be just like pulling a cert. The latter would give actual ownership to Cede and Co., relegating you to be a beneficial owner only.

The latter would make it impossible to find out if you own a real share or not and they are mandating it for 2007-2008.
Re: An Automated Primer For First Time Investors By davidn on 8/14/2006 2:27 PM
rtway, I like your concept of proof of delivery as per a canceled check.

The CUSIP # is the number assigned to the company itself. I think you mean the certificate number.

If your name and address were registered with the company transfer agent, you would literally be the actual registered owner and even though there was no paper certificate, your ownership would be numbered.

Usually, the largest registered owner on the shareholder list is "Cede & Co." They are the actual registered owner of the shares and are the largest shareholder of most companies.

The DTC keeps track of the participants that Cede & Co. owes shares to. If DRS only registers you to the DTC IOU list, then the whole thing is a sham set up to hide fails to deliver. There is no reason not to registered people directly with the company transfer agent.

Can someone knowledgeable tell me where DRS registers ownership?
Re: An Automated Primer For First Time Investors By rtway1 on 8/14/2006 2:36 PM
They could make this whole system as easy as grade school math but won,t. They never will because they would be killing off an industry that has taken care of criminals for decades. They first must keep the populace dumb, and that has proven to be a cake walk as most people are too lazy to turn a knob on a T.V. As long as they legally have the proof of ownership or can make it up we are screwed. If only you reach the masses to reveal the fraud, that is the solution. It will take a person of great public exposure to bring all this out. Hope we find that person soon.
Re: An Automated Primer For First Time Investors By kevin on 8/14/2006 3:25 PM
http://www.forbes.com/business/2006/08/11/naked-shorts-sia-utah-cx_lm_0811shorts.html
Re: An Automated Primer For First Time Investors By Wicked World on 8/14/2006 5:02 PM

"Can someone knowledgeable tell me where DRS registers ownership?"

davidn,

I'm someone about to initiate the DRS process for the first time. Can you tell me what to look for or what to ask in order to know the answer to your important question?
Re: An Automated Primer For First Time Investors By davidn on 8/15/2006 5:32 AM
Question:

"Will I be registered as the actual owner on the company shareholder list managed by the company transfer agent?"

The other possibility is that Cede & Co. is registered as the actual owner and the DTC just keeps a ledger entry that Cede owes you some shares.
Re: An Automated Primer For First Time Investors By piddly_sum on 8/15/2006 5:57 AM
The retail broker charges the same fee to pull the cert as it does to DRS. Plus I noticed an inbound DRS fee as well. So it is twice as much for DRS.

I would rather have a certificate in my safe deposit box.

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