bearer form

Bearer Form

A security not registered in the books of issuing corporation but that is payable to its bearer (the person possessing it). Securities can be issued in two forms: registered or bearer. Registered form means the issuing firm keeps records of a security's owner and mails out payments to him/her. Bearer form means the security is traded without any record of ownership, so physical possession of the security is the sole evidence of ownership. Most securities issued today are in registered form.

Notes:

A bearer bond, also known as a coupon bond, has coupons that must be clipped from the security and presented in order to receive interest payments. The issuer will not remind the bearer of coupon payments.

A bearer stock certificate is negotiable without endorsement and is transferred upon delivery.

See also: Book Entry Securities, Broker, Coupon Bond, Custody-Only Trading, Holder of Record, In Street Name, Security, Stock Power, Stock Record, Zero Coupon Bond

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Bearer form

Describes issue form of security not registered on the issuing corporation's books, and therefore payable to its bearer. See also: Bearer bond; coupon bond.

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bearer form

Used to refer to any security that, according to the books of the issuing organization, is not registered to an owner. Essentially, a security in bearer form is owned by the person holding the security. Compare registered security.