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Custody-Only Trading
What does it mean?
A system in which shares must be registered to the holder by name and can only be traded in physical form.
In Other Words...
The adoption of custody-only trading requires any purchases or transfers of stock to be placed through the issuing company's transfer agent.
Some companies implement custody-only trading because it protects shareholders from naked short sellers as the shares must be physically held by the seller.
Related Links
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Related Terms
Bearer Form | Custodian | Holder of Record | Naked Shorting | Safekeeping | Transfer Agent
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