No, You Don’t Own Your Securities
That’s right. You think you own securities in your brokerage account, but you don’t.
A company you’ve probably never heard of, called Cede & Co., is the official owner of >99% of the securities outstanding in the U.S. What’s in your brokerage account is probably an I.O.U. See the fine print.
This is a feature of U.S. capital markets that arose for historical (not nefarious) reasons. But those reasons long ago faded, and yet this vestige of yesteryear’s market structure remains. Were we to create a new market structure from scratch, it would look nothing like it does today.
Main Street investors lose, folks! This is a consumer protection issue. Winners are the privileged few who are in a position to exploit leakages caused by this market structure, at the expense of Mom & Pop.
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