A common way that investors hold publicly-traded securities. This means a brokerage firm holds its client's securities in its own name (or in the name of another nominee) and not in the client's name. The brokerage firm, in turn, keeps records showing the client as the real or beneficial owner. The client does not get a certificate evidencing its ownership of the securities, but receives an account statement from the broker on at least a quarterly basis showing the client's holdings.

For more information on how publicly-traded securities are typically held and traded, including a detailed discussion of the role of The Depository Trust Company, see Practice Notes, Securities Transfers and Proxy Voting and Clearing and Settlement of Debt Securities: Overview.