Demutualization

Demutualization is a process in which a mutual company, owned by its members, converts to a public stock company (owned by its shareholders).

Dividend

Dividends are the portion of company profits that is distributed to its shareholders. The amount of dividends paid is proportional to the number of shares held. The declaration and payment of dividends are left at the discretion of the company’s board of directors, whose decision is generally based on the company’s financial results.

Registered shareholder

A registered shareholder is a person who holds a share certificate or a share ownership statement.

Share

A share is a title of ownership issued by a company that, in certain cases, confers voting rights. An individual may hold shares either directly, or indirectly through mutual funds and segregated funds.

Share certificate

A share certificate is a legal document that confirms the number of shares held in a company. Contrary to share ownership statements, share certificates can be traded or transferred and have an actual value. These documents must therefore be kept in a safe place.

Share ownership statement

A share ownership statement is a document that confirms the number of shares owned in a company. Share ownership certificates are part of a simple management method known as a “book-based system,” under which the company’s transfer agent holds an individual’s shares. Contrary to share certificates, share ownership certificates have no actual value and cannot be traded or transferred.

This system eliminates the risks associated with the loss or theft of share certificates. It also eliminates the cost of safekeeping or replacing share certificates. Investors simply leave their shares in their shareholder account (no safekeeping charges) established with the transfer agent. Investors remain the owner of the shares and may sell or transfer them whenever they wish.

Securities broker

A securities broker is an investment specialist that is generally employed by a financial institution or a brokerage firm. Brokers are authorized to carry out stock market transactions on listed and unlisted securities on behalf of investors. They trade in stock market securities, mutual funds, guaranteed income securities, bonds, etc.

Transfer agent

A transfer agent is a company that a public stock company entrusts to keep its shareholder registry. The transfer agent is also responsible for providing certain shareholder services, such as issuing share certificates, tax statements, etc.