Registering US shares bought at IB on your own name

Dear Mustachians,

I am newcomer to this world of investments and recently I have started investing on ETFs through Interactive Brokers.
I have seen that my money once invested in a fond, it is not longer kept under my name, but held under “street name”, this is under the name of IB, held under IB´s name, like in a pool with the money of other people?
Maybe this is a common prctice in the industry, but is this safe? If something happened with IB (if they went bankrupt for instance), would this represent a problem for my money?
If you had experience with this topic, I would appreciate your help.

Thanks in advance :slight_smile:

Yes that’s the case for every broker in the US, that’s standard. If that wasn’t the case you wouldn’t be able to trade your assets.


As safe as the regulations and the brokers book keeping is…

Despite the hassle of waiting times, uncertainty and maybe some forms, verifications,… I see no major problems regarding a “regular” bankruptcy (e.g. 100% segregated assets). But I see major problems if fraud, irregularities or malpractices, … come along with a bankruptcy.

At least with US securities, those can be direct registered (DRS) and are then held in your name at the company’s transfer agent. I’m not sure about non-US assets and ETFs, though…

The transfer process to / from a transfer agent takes around 2-5 days and the shares are held at no extra cost (at least that is my experience)

I directly registered share of one american company at the transfer agent. IB only ask 5$ per transfer. Then the transfer agent has no fees (unless you sell them).

If you don’t directly register them, your US-company shares are legally owned by Cede&Co. Cede&co is the nominee of the Depository trust company. The Depository trust company then creates a “share” that economically represents a legal share of the company for each share that is own by Cede&Co. Then they are in street name, but in that case your broker is definitely not the only intermediary between you and the shares you economically own…

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At least with US securities, those can be direct registered (DRS) and are then held in your name at the company’s transfer agent. I’m not sure about non-US assets and ETFs, though…

Did I understand correctly that you can’t register ETFs? There is absolutely no way to do it?
Me, like many other in the forum are investing in VT or other similar ETFs and having the possibility to register them would be nice, or at least, an additional safety net. :slight_smile:

That’s not what I was saying.
I know that US stocks can be registered. I just don’t know If and how that works for non-US stocks and/or ETFs…


What are the other consequences of this step? I guess you can’t use your shares as a collateral for a margin loan anymore?

How do you receive dividends in this arrangement?

… That the shares are registered in your name at the company’s transfer agent.

The shares ‘left’ your broker, thus are not part of a portfolio within said broker. So, no collateral for a margin via your broker, IMO.
The process to transfer shares out (IBKR: 5$) and in (IBKR: 25$) is initiated trough your broker, though.

I can only speak for ComputerShare (as there are other transfer agents): Dividends are paid via check, wire or ACH payment (the later is free of charge).

An important note: One can be exempted from dividend withholding taxes from shares of non-US companies (and countries with a CH tax treaty) by direct registering your shares and by sending in some forms (e.g. similar to the W-8BEN). As with most brokers (like eg. IBKR) one can not be exempted from dividend WHT at source (for those ‘exotic’ cases)…

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I have asked IB if it was possible to register the ETFs under my name, and they said it was not possible ;(

Yes, that’s the same with stocks, no “regular” broker will provide this service IMO, see above…

The question is: What happens if one direct registers an ETF, is it even possible?

After a few min. of research: As my ETFs at IBKR are all eligible for direct registration at the transfer agent / registrar, and I found “Computershare is the share registrar for Vanguard ETFs” [1], I guess there is no difference between stock and ETF in regards of direct registration.

As I already have an account at Computershare, I’ll give it a try someday. (BTW: An account is opened automatically with the first transfer and the data provided from the transferring broker. After a few weeks, you get the transfer statement / account number via regular mail, that allows you to open an online account at Computershare…)