A Holder of Record (HOR) is an individual or entity — usually a financial institution — whose name appears on a company’s books as officially owning its security. A security can be any number of types of financial instruments, including stocks and bonds.

A holder of record is the legal owner of the security and as such is entitled to receive any dividends or interest payments that may be disbursed. Additionally, the holder of record will typically have voting rights in the issuing company and may also be entitled to other shareholder benefits such as invitations to shareholder events.

Simply having a record of an individual’s security ownership in a company’s register is not sufficient for their status as the holder of record - for the individual to become the legal holder of the security, the purchase must be accompanied by a transfer of title. This process is usually handled through the shareholder’s brokerage firm, and the holder of record then becomes the legal owner of the security rather than the brokerage firm.

In the case of stocks, the holder of record typically receives dividend payouts that are available pursuant to the issuing company’s stock structure, unless the holder of record has opted out of doing so. Generally, transfers of stock are processed within 5 working days and the holder of record is notified by the issuer.

In the case of bonds, the holder of record is entitled to the principal plus any interest payments due. Generally, the transfer of bond ownership depends on the issuing company and may take anywhere from 3-10 days to complete. Once the transfer is complete, the individual becomes the holder of record and is legally entitled to receive all payments due.

In either case, the holder of record has the rights, benefits, and responsibilities of ownership. While the concept of holder of record may seem simple, it is in fact exceedingly important for securities owners and is critical for their registration and legal recognition as owners of company’s securities.