Free right of exchange
Free right of exchange refers to the ability to transfer a stock (security/equity) between entities without paying the usual charge or commission that would accrue to a regular sales transaction.
This can be utilized to change the named owner of a stock from one entity to another. For example, when an equity held by a broker-dealer on behalf of a client (referred to as being held in street name) is transferred into that customer's name directly. Among other reasons, this might be done to facilitate eligibility for a dividend-reinvestment plan.
Related Fool Articles
Recent Mentions on Fool.com
- Ominous Sign as Margin Debt Continues to Rise
- Bitcoin?s New Problems: Death, Meltdowns, and Warren Buffett?s Disapproval
- FuelCell Energy Inc Earnings: What to Expect Monday
- Costco and Staples Fall on Earnings, Safeway Goes Private
- Dow Closes Up 62; Is the Bond Market Rally Over?
- Here's What You Don't Know About Caterpillar Inc., Today's Best Dow Stock