Proxy Voting and Corporate Actions for Shares Held in Street Name
When customer securities are registered in 'street name' (the name of the broker-dealer) at DTC, who retains the legal right to vote proxies and receive corporate dividends?
When shares are held in street name for convenience and margin collateral, the customer remains the BENEFICIAL OWNER and retains all economic and voting rights.
Complete Analysis & Legal Rationale
When shares are held in street name for convenience and margin collateral, the customer remains the BENEFICIAL OWNER and retains all economic and voting rights. Under SEC Rule 14b-1, the broker-dealer MUST promptly forward all proxy statements, voting cards, and financial reports to the beneficial owner, with costs reimbursed by the issuer.
Distractor Autopsy (Why Other Options Are Traps)
FINRA exam writers design incorrect distractors using specific calculation mistakes and regulatory misconceptions. Review why each option succeeds or fails:
Beneficial owner (customer) retains voting rights; broker-dealer forwards proxy materials.
Broker-dealers cannot vote client proxies on non-routine matters without customer instructions.
DTC is the central depository, not the voting owner.
Transfer agents maintain issuer shareholder records, they do not vote.