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Subject: Stocks - Replacing Lost Certificates
Last-Revised: 14 Mar 2010
Contributed-By:
Richard Sauers (rsauers at enter.net),
Bob Grumbine (rgrumbin at nyx.net),
Chris Lott (contact me),
C. Constantmn Poindexter
If a person loses a stock, bond or other certificate through fire,
theft, or whatever, shares registered in the stock holder's name (as
opposed to so-called "street name") can be replaced fairly quickly and
easily.
To replace a lost certificate, begin by contacting the company's stock
transfer agent. If you don't know the transfer agent, contact the
company to find out. The Value Line or Standard & Poor's Corporation
Records (probably available at your friendly local library) are good
sources for the company's contact address. You will need to know the
approximate date the certificate was issued.
The transfer agent will require you to post a surety bond, often
called a lost instrument bond or a lost security bond. A surety bond
indemnifies the issuer from any loss that it might incur as a result
of the reissuance. The cost of a surety bond ranges from 2% to 3% of
the value of the lost certificate. The process to issue a surety bond
requires a simple application and an affidavit of loss. Up to certain
monetary amounts, lost instrument bonds are written quite freely. A
review of the applicant's personal financial statement and consumer
credit report are not necessary for very small denomination
instruments. If a surety bond must be issued for a large instrument
such as a bond certificate with a face value above $10,000, or if an
"open penalty" surety bond must be issued, then a credit review is
required. An underwriter knowledgeable about lost instrument bonds
can often approve and issue a surety bond within hours of receiving an
application and premium payment. Once the bond is posted, the
transfer agent should be able to reissue the missing certificate with
no further ado.
If you hold shares in your name, you might consider preparing yourself
for the possibility of a loss by keeping a copy of the stock
certificate (it will show the number, transfer agent, etc.) separate
from the original.
The following companies provide surety bonds in the United States:
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Christopher Lott.
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