Maire bought shares listed on the Irish Stock Exchange through a stockbroker. The shares are held in the stockbroker's nominee company. Who is the legal owner of these shares?

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Prepare for the Qualified Financial Adviser Exam 2 with flashcards and multiple choice questions, complete with hints and explanations. Get exam-ready and increase your confidence with our comprehensive study materials!

Multiple Choice

Maire bought shares listed on the Irish Stock Exchange through a stockbroker. The shares are held in the stockbroker's nominee company. Who is the legal owner of these shares?

Explanation:
When shares are held through a broker’s nominee, the legal ownership sits in the name of the nominee company, not the investor or the market. The investor is the beneficial owner, entitled to the economic benefits (like dividends and voting rights through proxy), but the legal title is held by the broker’s nominee. The exchange itself is just the marketplace and does not own the shares. So the legal owner is the stockbroker’s nominee company.

When shares are held through a broker’s nominee, the legal ownership sits in the name of the nominee company, not the investor or the market. The investor is the beneficial owner, entitled to the economic benefits (like dividends and voting rights through proxy), but the legal title is held by the broker’s nominee. The exchange itself is just the marketplace and does not own the shares. So the legal owner is the stockbroker’s nominee company.

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