My broker has told me several times that the shares in my account are insured up to (I can't remember specifically how many million). As long as the shares are in my account they are insured. The number of shares is insured. That's what I've been told and I have a full service broker. I immagine that what is actually insured is the fact that I own x number of shares and if the broker goes bust or has a fire, is cheated, or whatever, I still own x number of shares. At whatever value they are at market. To me that means that if my account says I own x number of shares of RMIL, the broker has to come up with those shares on demand if I so demand, as long as they aren't margined. If they are margined, they have to stay in my account as collateral until the margin is covered/paid. Or, they can be sold at any time to cover said margin or they can be given to me in certificate form if I demand it. The insurance is a guarrantee that if I buy stock through the broker, I have actually bought the stock. It's mine. If I ask/demand the certificates be delivered into my hand the broker has to comply. Leaving them in my account involves a certain amout of trust in said broker. That's the only proof I have that I actually own the stock. If the broker doesn't have the shares in their account, even though they should since I own the shares and the broker is the custodian of my shares/account, when I ask/demand the shares, the broker has to get them even if the broker has to pay a higher fee than I paid. Although, if the MM guarranteed the broker a certain price...I think it's then the MM's responsibility to provide the share certificates to the broker at the price the broker was quoted.
Shares in certificate form are like cash. If it burns in a fire it's gone. If it's stolen, it's gone. If it gets lost it's gone. That's what the brokers are insured for. The shares in your account are insured against loss due to fire, theaft and that kind of stuff. When you get your certificates, guard them well. Keep them safe.
Ginger/Block Island's Cavewoman
PS, Pugs, if it came from anyone else I would be in doubt but from you I believe! The squeeze is on!!!! |
