Non-Objecting Beneficial Owners (NOBOs) are those that elect to release their name and contact information to the company or companies in which they have purchased securities. Through this release of information, they give access to the company to send materials to them, such as voting proxies and financial reports. Those who do not release their information are referred to as Objecting Beneficial Owners (OBOs).

The differences in NOBO’s and OBO’s were set down by the U.S. Securities and Exchange Commission (SEC). The distinction is maintained for two reasons. First, it is a useful mechanism for the company to stay compliant with corporate regulations. By having access to the name and contact information of those who hold ownership of their securities, the company can communicate with them efficiently, quickly, and accurately.

Second, OBOs are protected by the distinction. These individuals are attempting to maintain their privacy by not releasing their information. Owning company securities is a private matter, and some individuals may not wish to disclose their ownership of those securities. The OBO designation can be used to achieve that privacy.

The regulation of OBOs versus NOBOs is an issue with many stakeholders. Some parties, such as companies, are in favor of abolishing the distinction, as it could simplify communication for them. Banks, brokers, and OBOs, however, wish to keep the distinction in place. The two sides are in discussion in order to come up with an optimal framework for how beneficial owners should be classified.

It is important to note that due to SEC regulations, beneficial owners must give permission to the company in order for them to release their contact information. This ensures an owner’s privacy is protected. Similarly, if an OBO later decides to switch to a NOBO, they must also provide permission to the company to allow them to receive materials pertaining to the business.

In conclusion, NOBOs and OBOs are two different classifications of beneficial owners with distinct information provisions. Companies are interested in abolishing the distinction in order to simplify communication with beneficial owners, while banks, brokers and OBOs wish to sustain the distinction in order to protect an individual’s right to privacy. The SEC has provided a variety of regulations to ensure the safety of both sides, and the two sides are engaged in talks about how the regulations should be handled.