What Is a Nominee?
A nominee is a person or firm whose name is titled on securities or other property to facilitate certain transactions or transfers while leaving the original customer as the actual or legal owner. In this way, a nominee can serve as a custodian.

A nominee account is a type of account in which a stockbroker holds shares belonging to clients, making buying and selling those shares easier and for safekeeping. In such an arrangement, shares are said to be held in street name.

KEY TAKEAWAYS
• In finance, a nominee refers to a person or company who has been entrusted with the safekeeping of investors’ securities or property; all of your investments are held in its name, while you retain control.

• The securities are held in trust and the nominee is the legal owner, but you hold on to real ownership as the beneficiary.

• The broker can buy and sell on your behalf, but your funds are protected if the brokerage goes out of business or your broker tries to swindle you.

• The nominee company should be a neutral third party that is separate from the brokerage itself.

Understanding Nominees
Investment advisory firms routinely use nominees to safeguard the assets they manage for their clients. Nominee accounts are the most common method for holding stocks. Stockbrokers prefer nominee accounts because they reduce costs and increase trading efficiency.

An investor’s shares are legally owned by a stockbroker’s non-trading subsidiary or nominee company. The investor is the stock’s beneficial owner and has rights over the shares. The stockbroker records all beneficial owners, trades according to an investor’s directions, and passes cash from sales or dividends to an investor.

Because a non-trading company owns the shares, an investor’s assets are legally separate from the stockbroker’s assets and liabilities. If the broker becomes insolvent, the investor’s stocks are protected from creditors.

Nominee Accounts and Investor Safety
Although regulators and exchanges periodically review nominee accounts, the process is not performed on a daily basis. Because a stockbroker may move or sell shares from nominee accounts at any time, fraud may occur. This is especially common if a firm is facing insolvency and needs cash or assets to meet liabilities. A stockbroker’s records may become altered, increasing the difficulty of determining which investors own assets in a nominee account.

IMPORTANT: Brokers don’t typically have separate accounts for each individual, but rather pooled accounts of many customers that give them a bigger pot to stir.

Nominee Accounts and Investor Compensation
Most major markets offer investor compensation, covering assets held by a stockbroker. Investors are compensated up to a set amount if any assets are missing from their accounts and the broker cannot offer the difference in cash. Investors with larger stock values are encouraged to have accounts with multiple brokers, for it is unlikely all brokers will fail simultaneously, and the investor is entitled to recoup more than if the nominee account was with one broker.

Nominee Accounts and Foreign Stocks
A stockbroker typically does not take direct custody of an investor’s foreign securities. The broker uses a third-party custodian, typically a division of a major global bank offering such services. However, some international brokers have local subsidiaries handling custody in some or all of their markets.

Assets the bank holds in custody are segregated from general operations. Although it is possible the global bank may fail, the far-reaching consequences would most likely result in a bailout, protecting the investors’ asset values. However, in smaller emerging markets, a custodian without a local division may engage a sub-custodian to hold stock on its behalf. If the sub-custodian faces insolvency, the main custodian may not be liable for the sub-custodian’s missing assets.

---

 

Are you worried about your financial future and the security of your family in an uncertain world? Do you want to protect your family and ensure that your children grow up in a safe environment, away from war zones and the risk of conscription?

We offer comprehensive solutions for your individual needs. From tax optimization to asset protection to planning your emigration – together we will find the best path for you.
Topics such as tax-friendly countries, residence permits, citizenships and company formation are our specialties.

We help you with the Application with our Team

We’ve helped hundreds of people move their businesses overseas, legally reduce their taxes, and become dual citizens. We are focused on high-net-worth individuals and their families as well as corporations wishing to invest their offshore companies or even secure their wealth in offshore financial centers around the world. We will help you to find the best solution for setting up an offshore or onshore company. Another special area of our full-service consulting is the investment opportunity and solution in Europe, especially in the Balkans, Africa, Asia, UAE, the Caribbean and the Pacific.

If you are looking for it, please feel free to contact us. We create a holistic plan that serves your purpose.

The TCME Group Worldwide as well its partner in Vanuatu are accredited, licensed and authorized agents and facilitators of the Government of Vanuatu for the citizenship programs of the VDSP and the CIIP in Vanuatu.

GCI UNIT Worldwide by TCME Worldwide Group, designs and implements customized, holistic strategies for successful investors and entrepreneurs to legally reduce their tax bills, diversify and protect their wealth, invest abroad, gain a second citizenship and live a freer life worldwide to lead.

YOUR CHANCE FOR A BETTER LIVE

TCME Worldwide Group firm is a leading professional International Business Investment and Advisory Firm for Foreign Economic Relations. Our range of services includes:

Offshore and Onshore Company Formation,
international Business & Management
Citizenship & Residency (Advice on residency and citizenship by investment programs, VIP citizenship programs in cooperation with more than 70 countries)
Investments & Corporate Financing
Advisory for Foreign Economic Relationship
Diplomatic Consultancy & Public Affairs

If you would like to discuss your internationalization and diversification plans, book a consulting session* or email us under:  [email protected]

*A counseling session is a conversation about your portfolio and goals. It does not constitute legal, financial, tax or investment advice.

TCME Worldwide Group – Global Investments –
Level 33, Ilham Tower, 8 Jalan Binjai,
Kuala Lumpur 50450, Malaysia

www.tcme.company
www.citizenship-news.com

International Phone: +66 99091 8357 (also for BOTIM, Signal, Viber, Telegram)
Malaysia Phone: +603 2169 7057
Montenegro Phone: +382 69 150 130 (WhatsApp)

Telegram https://t.me/passport_Vanuatu

Telegram https://t.me/passport_news

[email protected]