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
- Bristol-Myers Squibb Co.'s Fourth Quarter Earnings Warn of a Tough Year Ahead
- Pfizer Inc.'s Fourth-Quarter Earnings Hint at Big Things to Come
- Netflix Can't Make Originals Fast Enough
- Our 5 Favorite Warren Buffett Quotes
- These 3 Pharmaceutical Companies Control Roughly Half of All Cancer Drug Sales
- Did the Swiss National Bank Unleash Mayhem in Currency Markets to Protect Its Private Shareholders?