Some questions about stock purchasing process

Some months ago I started to read some books and web sites about investing.
I have
read something about technical and fundamental analyses, stock
markets, and portfolios. But what I did not understand: what happens
when someone buys shares in whole that chain: company - stock market -
bank (provider of brokerage services) - person who purchases shares.
What is almost clear is direct purchasing scheme: company - person
that purchases shares. So, for example, John Smith wants to purchase
100 shares of Microsoft. He comes to Microsoft's investors department
and buys 100 shares directly. He receives a paper-certificate: John
Smith owns 100 shares of Microsoft. So John can put these shares under
his desk or put it in safe place somewhere: bank, loft etc.
What is not clear here: are those typically named shares certificate
with John Smith on it or they are not named?
But it's clear, that then he can do different actions with this shares
certificate: pass it to his girlfriend as a gift; resell it to a
friend on agreed price and so on.
But what actually happens when he purchases shares in NYSE via his
bank? So it's the chain: company - stock - bank- person who purchases
Suppose that John purchases 100 shares of Yahoo traded at NYSE market
via his Citibank. So he says to person at Citibank or uses their
online trading system: I want to purchase 100 shares of Yahoo on
market price. He gets the reply: order executed.
Ok, but what was actually happened? It's clear: the order is
registered in bank's data base with all needed information.
But who holds his stocks: bank or people at NYSE market? And on whom
Do people working at NYSE have some kind of registry with the record:
John Smith owns 100 shares of Yahoo.
Or does NYSE have the record: Citibank purchased 100 shares of Yahoo
for name of Citibank.
Where does Yahoo itself keep registry of shares? Or because Yahoo is
publicly traded company it means their registry is hold at NYSE?
Does Yahoo know that it is John Smith purchased 100 shares?
For example, John wants to change the bank and go to Barclays. Can he
say to Citibank: please transfer my portfolio to account at Barclays?
Is it possible? How?
I asked serious people around (they are just usual people,
non-brokers), but it seems they don't have answers.
If someone from his newsgroup has knows the answers, please, let me
know. Or give me names of books or URLs of sites that clearly explain
Reply to
Roman Vasin
You appear to be in US and I can only tell you what goes on the in UK, which may not be so very different.
They won't have his name on it but they will be registered as his with the registrars. Each company appoints a registrar which looks after matters such as this.
The bank (stockbroker) buys the shares for you from the market makers.
If he is using a paper-based system he will be given the share certificates, which will be numbered, and these will have been registered in his name. If he wants to dispose of them he will send the certificates back to the broker (which may be a bank, as you indicate, but doesn't have to be) who will perform the necessary paperwork and cause the shares to be unregistered from his name.
If you are trading on the internet, say, the firm which acts as a broker will have a nominee account. When you buy a share it is held in this account and you don't get the certificate. When you sell it, you don't need to produce this certificate because it's being held by the broking firm in this nominee account.
The firm's registrar will.
I don't know what further records are kept. I suspect that there will be some somewhere in case there's a scam which needs investigating, rather like being able to access someone's telephone calls.
Is I say, the firm's registrar keeps this.
Yes, if it asks its registrar.
If you hold the shares in your own name rather than in a nominee account then you won't have any reason to tell Barclays you want to change. Each deal you do you can do with a different broker. However, if the shares are held for you in a nominee account then you would have to encash this account and buy the shares via another nominee account if you wanted to change,
Rob Graham
Reply to
Rob Graham
It usually says something like
"This is to certify that Jonathan Bryce is/are the registered holder(s) of 100 ordinary share(s) in Microsoft Corporation.
Reply to
Jonathan Bryce
In message , Tiddy Ogg writes
Its a second hand car dealer which, except for new issues, supplies 2nd hand cars not new ones direct form the factory.
Reply to
john boyle

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