My understanding is that a cash account is not in street name. a margin account is and the firm can lend the stock out (largely to shortsellers) regardless if you have a margin debit. If they do, you do not get the dividend but rather a payment in leiu. The only economic different is the tax treatment. A dividend can be qualified for long term tax treatment, a payment in leiu is treated as ordinary income.
Not true. Fully paid stock can not be rehypothecated. Google search is a fascinating thing - even comes up with IB's knowledge page: https://ibkr.info/node/1966 Fully Paid Securities The term "fully paid securities" refers to securities held in a customer's margin or cash account that have been completely paid for and are not being pledged as collateral to support the purchase of other securities on margin. The term is relevant from a regulatory perspective as the SEC requires that U.S. broker dealers segregate and maintain in a good control location (e.g., DTC or bank) all customer securities which are fully paid. Such securities cannot be pledged or loaned to finance the activities of the firm or other customers.
you should call IB and find out what happend. I would be curious to know as would others I’m sure. I doubt what they’ve done is illegal so there’s something else.
Imagine the onerous changes that a stock will go through every time it is bought/sold in terms of share registration etc. Talking about the expenses and workloads. If you want to buy stock to your name, buy it directly from the companies, some companies have such programs working with some brokers of their choices. You end up opening numerous accounts if you want to have a diversified holding and stocks registered to your name. Even long term holder like Buffet/Berkshire have their shareholding on streetname basis through their favorite brokers (Citigroup primarily).
securities in non margin account in all brokerages (cash only transaction) are on street name. https://www.sec.gov/reportspubs/investor-publications/investorpubsholdsechtm.html#faq
interesting. Then how is a dividend considered qualified? I thought it was only qualified to the holder of the security. edit: I’ve never seen someone get so worked up over 50 dollars who before was such a big client of a Swiss private bank that he could talk with the CEO.