What is Foolsaurus?

It's a glossary of investing terms edited and maintained by our analysts, writers and YOU, our Foolish community.

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.

Expanded Definition

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

Related Terms

Recent Mentions on Fool.com