bearer security

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A security for which proof of ownership is possession of the security certificate; this enables such bonds to be transferred from one person to another without registration. No register of ownership is kept by the company in whose name it is issued. This is unusual as most securities are registered, so that proof of ownership is the presence of the owner’s name on the security register. Eurobonds are bearer securities, enabling their owners to preserve their anonymity, which can have taxation advantages. Bearer bonds are usually kept under lock and key, often deposited in a bank. Dividends are usually claimed by submitting coupons attached to the certificate.

Subjects: Financial Institutions and Services — Accounting.

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