Direct Registration of Stocks (DRS): Protect Your Securities

According to the SEC, investors have three options when it comes to holding securities. The first option is a physical certificate. The second option is “Street Name” Registration, which means that a brokerage firm holds the security for you on their books. The third option is Direct Registration. The Direct Registration System (DRS) provides registered owners with the option of holding their assets on the books and records of the transfer agent in book-entry form. Through DRS, assets can be electronically transferred to and from the transfer agent and broker/dealer.

The topic of DRS has garnered particular interest lately as Jim Sinclair, a well-known precious metals specialist and commodities/foreign currency trader, has spoken candidly and publicly about the dangers of failing to use DRS when holding securities. While participating in DRS has a myriad of benefits, the most obvious include convenience and security of book-entry shares and the reduction of risk, time and costs associated with storing paper share certificates and replacing lost or stolen certificates. DRS also enables electronic share transactions between one’s broker/dealer and the company’s transfer agent, and reduces the overall administrative costs to the company and its shareholders.

In order to better serve those investors interested in participating in DRS with their retirement plans, CamaPlan has released a new, streamlined process for those who wish to participate in the direct registration of their qualified plan (IRA, 401(k), etc) stock certificates.

Although there can be restrictions with moving certain plans (such as employer-sponsored 401(k)s, while still employed by the company), many individuals with previous-employer plans and IRAs should be able to take advantage of this opportunity. CamaPlan’s streamlined method may also be used to efficiently establish self-directed plans and transfer shares of stock “in-kind”. Though not a broker, CamaPlan does have a process in place to allow clients to continue to buy and sell stocks after the direct registration of their qualified assets has taken place.

With this streamlined process, CamaPlan hopes to better serve the growing number of investors who insist on using DRS as a vehicle for holding their qualified plan securities. For more information regarding the streamlined DRS process, please visit our Investment Page.