Holding Company Depository Receipt

Shares in several publicly-traded companies packaged together and traded as if they were one stock. HOLDRs are printed on one stock certificate. HOLDRs are put together in situations where some stocks pay higher dividends, while others have the higher potential for appreciation. They were created and are administered by Merrill Lynch, and trade on the American Stock Exchange. HOLDRs exist in many different industries.

HOLDRS (Holding Company Depositary Receipts)

Exchange-traded receipts representing beneficial ownership of a fixed basket of common stocks in a particular sector or industry. Owners of these securities can choose to have HOLDRS converted to the underlying stocks so that individual shares can be sold. Stocks represented by HOLDRS are selected prior to the initial issue of HOLDRS and remain unchanged except for unusual circumstances such as corporate mergers and spinoffs. HOLDRS are originated by Merrill Lynch and traded on the American Stock Exchange.
Case Study Unlike mutual funds and most unit trusts, HOLDRS represent beneficial interest in the underlying stocks. As such, owners of HOLDRS are entitled to receive dividends, annual reports, proxy statements, and other correspondence from each firm included in the portfolio represented by a particular class of HOLDRS. Owners of HOLDRS are also permitted to vote on corporate affairs of firms whose stocks are included in the HOLDRS portfolio. Agile Software Corporation, a firm whose stock traded on the New York Stock Exchange, became concerned with the expense of servicing all of its new shareholders who owned B2B Internet HOLDRS. Agile had approximately 15,000 shareholders prior to the creation of the B2B HOLDRS in which the firm's stock was included. Creation of the HOLDRS caused Agile to incur the additional expense of servicing nearly 50,000 additional shareholders. In April 2001 Agile Software filed a federal lawsuit seeking to force the American Stock Exchange, Bank of New York (the trustee for HOLDRS), and Merrill Lynch (originator of HOLDRS) to pick up Agile's expense of servicing the additional shareholders. Agile claimed that all three of these companies were earning a profit from HOLDRS and should be responsible for the expenses of servicing its owners.
References in periodicals archive ?
NEW YORK -- Pursuant to the notice given on November 22, 2011 by Merrill Lynch, in its capacity as the Initial Depositor of HOLDRS (Holding Company Depositary Receipts), to The Bank of New York Mellon, the HOLDRS Trustee, the 11 HOLDRS Trusts will be terminated as of 5 p.
The 11 HOLDRS Trusts that will terminate on the Termination Date are: B2B Internet HOLDRS(SM) Trust (BHH); Broadband HOLDRS(SM) Trust (BDH); Europe 2001 HOLDRS(SM) Trust (EKH); Internet HOLDRS(SM) Trust (HHH); Internet Architecture HOLDRS(SM) Trust (IAH); Internet Infrastructure HOLDRS(SM) Trust (IIH); Market 2001+ HOLDRS(SM) Trust (MKH); Software HOLDRS(SM) Trust (SWH); Telecom HOLDRS(SM) Trust (TTH); Wireless HOLDRS(SM) Trust (WMH); and Utilities HOLDRS(SM) Trust (UTH).
Earlier today, the firm announced the expiration of the exchange offers and the formal acceptance of validly tendered HOLDRS.
The Rebalanced HOLDRS Securities Value, as summarized below, is the value of the securities underlying the tendered HOLDRS receipts after giving effect to purchases and sales performed by the Transition Manager (ConvergEx Group) today, December 20, 2011, following the expiration of the exchange offers.
NEW YORK -- The HOLDRS Trusts have been advised by The Bank of New York Mellon, in its capacity as the Trustee of HOLDRS, that it has decided to extend the period during which owners of the various HOLDRS securities, after the termination of the HOLDRS Trusts, may surrender their HOLDRS and request delivery of the underlying securities from a period of four months to a period of 12 months.
in its capacity as coordinator and initial depositor of the CP HOLDRS Deposit Facility (HCH), announced today that pursuant to the terms of the Deposit Agreement dated September 4, 2001, as amended by Amendment No.
Overall, the Retail HOLDRS Trust (NYSE: RTH) remains locked in a long-term downtrend, with the exchange-traded fund (ETF) following its 10-month and 20-month trendlines steadily lower since June 2007.
The Telecommunications HOLDRS Trust (NYSE: TTH) has suffered a rough year, as the exchange-traded fund (ETF) has dropped more than 10% since the start of 2009, easily underperforming the broad market.
Stocks featured in this week's analysis include Altera Corporation (Nasdaq: ALTR), Intel Corporation (Nasdaq: INTC), Marvel Technology (Nasdaq: MRVL), Texas Instruments (NYSE: TXN) and Semiconductor HOLDRS (AMEX: SMH).