The initial Scottrade response to the question at the end of my last post wasn't of any value, so I asked it again. This came back:
Dear XXXXX:
We regret not answering your questions in the previous e-mail. It is true that some securities are not eligible for transfer through Direct Registration System (DRS). DRS transfers are limited to shares that are already held in "Book Entry" format. Book Entry refers to shares that are held as an electronic record. These are also the shares that are held and transferred between brokerage firms like Scottrade.
For the transfer of securities that are brand new or held as a stock certificate, these transfers are handled through a process called Debit Withdrawal at Custodian (or DWAC for short). In this process, the transfer agent acts as custodian (as opposed to brokerages acting as custodians with DRS). The transfer agent transfers shares to brokerages through the Depository Trust and Clearing Corporation (DTC).
We hope this information helps and we encourage you to reply if there is anything else that we can assist you with.
Sincerely,
Jeff K.
National Service Center | Scottrade, Inc.
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
Dear Jeff K.:
Thank you for the on point response and consider me encouraged. The issues are complicated and your and Scottrade's willingness to help me gain a better understanding of them is duly noted.
The shares of interest are definitely Book Entry shares (neither "new" nor in certificate form) and hence, based on your response, are in brokerage custody and eligible for transfer. Based on an earlier response, I understand that this would allow the electronic record establishing my ownership to be transferred to the transfer agent, who would then be in a position to issue me a certificate. (For the record, I realize that any subsequent attempt to sell the shares would require some messy maneuvering, but that is not an issue for me.)
That clears up the mechanics for me nicely. However, I'm still left with my original underlying concern per my initial inquiry:
"If I were concerned about the legitimacy of my shares in a given company, that is to say if I wanted to confirm that my shares were actually shares issued by the company and not created in a short sale in which they were not delivered to the party from whom they were purchased on my behalf, could I receive my shares in certificate form?
Would the receipt of such a certificate establish that the shares were actually issued by the company?"
Thanks again.
Regards,
XXXXXXXXXX
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