Glossary of Terms

A notarized affidavit executed by the legal representative of an estate to indicate a decedent’s residence at the time of death.

A shareholder that holds 10% or more of an issuer’s outstanding shares, directly or indirectly, or is an officer or director of the issuer, or holds a position of control with the issuer.

Yearly shareholder meeting that is called to elect directors and conduct other business as required by company bylaws, stock exchange rules and corporate law. 

A yearly report filed by a public company which releases details of financial and business information required by securities law.

The amount of stock that a corporate charter allows a corporation to issue.

Shares held in electronic (non-certificate) form.

A licensed individual or institution that acts as an intermediary between buyer and seller and is paid commission for executing customer orders.

The nominee or “street” name used by the Depository Trust Company (DTC) for registering shares held by it. “Cede” is short for Central Depository. 

An organization that receives and holds securities/funds for certain accounts on behalf of beneficiaries, aiding in the clearance and settlement of trades. 

Capital stock that is secondary to preferred stock in the distribution of dividends and often of assets. Common stockholders typically have voting rights on such matters as the election of directors, etc.

An event that effects the shareholders of a company. (e.x: Stock Splits, Dividends, Exchanges, etc.)

The cost basis is the total acquisition value of an asset. The cost basis is adjusted by stock splits, dividends, and other corporate actions. It is used to calculate capital gains and losses for tax purposes. 

A unique set of numbers and letters combined to identify a specific issuer and type of security issued. The acronym stands for the Committee on Uniform Securities of Identification Procedures. 

A person or institution that legally holds responsibility of safeguarding the assets of another.

It is the only central depository in the United States for the physical certificates or the electronic transferring of shares between brokers/banks and transfer agents. Shares held at the depository are street name share that are registered in the nominee name “Cede & Co.” 

A payment of corporate earnings to shareholders. Dividends are normally paid in cash, but may also be in stock or property.

A program offered by some corporations in which shareholders may choose to use their dividends to purchase additional shares in the corporation instead of receiving cash payments. The shareholder is still responsible for taxes on the dividends.

System that allows for the registration of all electronic book-entry shares. A medallion stamped stock power is not required for the brokerage account deposit of DRS shares. Acronym for Direct Registration System. 

System that allows for the electronic transfer of shares directly between brokerage firms and the transfer agent without the involvement of DTCC. This method typically requires a medallion guaranteed stock power. Acronym for Deposit/Withdrawal At Custodian.

The Electronic Data Gathering Analysis and Retrieval system used for the filing of reports to the SEC. 

The process of relinquishing unclaimed or abandoned property to a state governmental agency. 

Processing system used by DTCC that encompasses all electronic book-entry share transactions (including DWAC and DRS systems). Acronym for the Fast Automated Securities Transfer. 

The total number of shares of an issuer publicly trading in the marketplace.

An SEC-regulated non-governmental organization that oversees member brokerage firms and exchange markets to protect market integrity and investors.

A method used by a corporation to increase the number of shares outstanding without changing each security holder’s proportionate ownership. The amount of shares increases  while the value of those shares proportionately decreases so that overall equity percentage remains the same.

The initial sale of securities to the public.

Someone who commits money or capital in order to gain a financial return, also known as a shareholder.

An offering of securities such as common or preferred stock.

A legal entity that issues different types of securities to raise capital (ie. common stock, preferred stock, warrants, options and bonds). Typically, the Issuer is referring to the corporation in which a person own shares.

A type of registration of a shareholder which indicates ownership of the stock/account by two or more people. All tenants typically have equal rights to the assets. In the event of death, the assets are transferred to the other tenant(s).

A type of ownership right for a shareholder. When one owner dies, his interest passes to his surviving co-tenant(s).

A written opinion by a securities attorney stating whether a contemplated transaction meets all the requirements of applicable  state and federal securities law. 

A transfer agent acts as a limited participant of DTCC that offers securities services on behalf of an issuer. A limited participant cannot initiate any trade transactions nor are   they a member of DTC.

Convert securities into cash.

It is the last reported price at which the security sold on an exchange. For over-the-counter securities, it is the inside market quote.

A stamp certification by a financial institution such as a commercial bank, credit union, brokerage firm, etc., that is a member of the Securities Transfer Association Medallion   Program (STAMP), NY Stock Exchange Program or Stock Exchange Medallion Program (SEMP or MSP). The financial institution certifies that the person endorsing the security is an appropriate person authorized to take such action. The Medallion Program is not a notary.

A notary seal by an official public notary that signifies that the party signing the document has sworn that contents of the document are truthful and accurate.

A List of Non-Objecting Beneficial Owners of stock held in street name for a publicly traded company.

Shareholders that owns less than 10% of outstanding shares and is not an officer or director of the company.

Owners of stock held in street name for a publicly traded company whose identity is not knowable by the issuer.

Office of Foreign Assets Control, a division of the U. S. Treasury, responsible for administering and enforcing economic and trade sanctions based on U.S. foreign policy and national security goals against targeted foreign states, organizations, and  individuals.

An over-the-counter quotation service. Stocks listed on OTC Markets may not be required to file financial statements with the SEC and do not meet or seek the listing requirements to trade on  NYSE MKT, NASDAQ, NYSE or other national exchanges.

The face value assigned to the security by the issuing corporation for the lowest price the stock may be sold at per share. 

A penny stock is typically a stock not listed on a major stock exchange, trades under $5 per share, or does not meet certain asset requirements.

A listing service for penny stocks that trade over the counter.

Capital stock which provides a specific dividend that is paid prior to common stockholders. Typically, preferred stockholders have unique voting rights or none at all, but hold a higher claim on assets than common stockholders.

A private offering, usually with select private investors, of securities exempt from registration with the SEC.

The mechanism by which a shareholder may exercise his/her right to vote on proposals to be presented at an annual or special shareholder meeting. The proxy card authorizes the board of directors of the company to act as proxy for that shareholder to cast his/her votes at the meeting as directed.

Shareholders holding shares recorded directly on the books of a corporation. Shareholders holding shares in street name would not be named on the books of the company. 

1.  Refers to the registration of securities with the SEC. This stems from the requirement that the company provide the investor with details about an investment offering for sale to the public. 

2.  Registration also refers to the name the shares are registered under to establish proof of ownership.

Offerings of $1,500,000 or less to a limited number of people that, among other things, do not have to be fully registered with the SEC.

Allows both domestic and foreign issuers to distribute and resell securities outside the U.S. without registering them in the U.S. 

Securities acquired in unregistered, private sales from the Issuer or from an affiliate of   the Issuer. Investors typically receive restricted securities through private placement offerings, Regulation D offerings, employee stock benefit plans, as compensation for professional services, or in exchange for providing start-up capital to the company.

A method used by a corporation to decrease the number of shares outstanding without changing each security holder’s proportionate ownership. The amount of shares decreases while the value of those shares proportionately increases so that overall  equity percentage remains the same. 

A common resale exemption provided by federal law allowing the public resale of securities without registration in accordance with the Securities Act of 1933. 

A government agency created by the US Congress to regulate the securities markets and protect the investing public against fraudulent and manipulative securities practices. It enforces regulations to protect investors, maintain fair, orderly, and efficient markets, and facilitate capital formation.

A federal law that, among other things, regulates new issues of securities and details their registration with the SEC.

A letter signed by the seller of shares whereby the shareholder affirms and represents that he/she is selling the shares in full compliance with Rule 144 or other exemption. The letter is typically furnished to the issuer’s legal counsel, the transfer agent, and the shareholder’s broker.

Form used to instruct the transfer of ownership of a security from the registered owner, which must be Medallion Guaranteed. This can be used in lieu of completing the back of the certificate or for book entry shares.

Securities held in the name of a brokerage firm, a clearing firm, bank nominee or depository for the account of a security holder. Shares that are held by DTCC will be registered in the nominee name of Cede & Co.

An agreement between a prospective buyer, usually an accredited investor, and an issuing company that outlines the terms under which the shares are purchased.

A mechanism for meeting the holding period requirement under Rule 144(d) that allows a non-affiliate to rely upon the holding period of the prior owner(s) of the shares, provided that the prior owner(s) are also non-affiliates, or were affiliates who made a bona fide gift to the current holder. 

The number used to report dividends and other income such as a Social Security Number or an Employer Identification Number.

A form of registration that outlines the undivided ownership of the property and for the right of survivorship. Unlike a joint tenancy, Tenancy by the Entireties is not subject to partition. Tenancy by the Entireties is not available in all states, and is only available to married couples.

A form of registration, which provides for undivided ownership of the property in question. Each Tenant in Common owns a percentage of the shares. When shares are registered as Tenants in Common, the representative of a deceased Tenant’s estate must act to   transfer the shares.

The person or entity that cancels the shares in the name of the seller and reissues shares in the name of the buyer. A transfer agent maintains the master securityholder file as well as all the shareholder issuance, cancellation and transfer records for an issuer.

A relationship established by agreement between a grantor and a trustee to manage assets or property for another’s benefit.

A person or institution holding property in trust. The trustee manages and invests the assets and makes distributions according to the terms of the trust.

Buying stock at a fixed price during a specific period of time that can be traded like other investments by a certain future date. Warrants hold no voting rights nor does the holder receive dividends.