Book-entry Bonds
As a physical entity, registered bonds have more recently been supplanted by book-entry bonds. Owners of a book-entry bond do not receive a physical certificate. Instead, each bond issue has only one master certificate, which is kept at a central depository. Ownership of book-entry bonds is recorded at the depository by computer. Generally, brokers or dealers are listed as owners at the depository in place of their clients, who are the beneficial owners, meaning that the client receives all the benefits of owning the security. The broker or dealer maintains its own records of beneficial ownership. All interest and principal payments are forwarded by the issuer’s transfer agent to the depository, which delivers them to the brokerage account. The brokerage account delivers payment to the beneficial owners. Securities that are registered in the broker-dealer’s name but have the customer as the beneficial owner are said to be held in street name.
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Form of Municipal Bond Ownership |
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Form of Issue |
Transfer and Redemption |
Frequency |
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Bearer Bonds |
Physical certifica | ||