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Definition: Non Objecting Beneficiary Owner (NOBO)
A non-objecting beneficiary owner as the names suggests is the beneficiary of the shares i.e. the shares are issued in his name but the certificate is held by the financial intermediary. He/ she will give the permission to the financial intermediary to release his name and address to the company whom shares he/she holds. Hence, he/she has no objection.
At the time of buying the shares the papers will be held by the financial intermediary, but the papers are in the name of the shareholder who buys it.
At the time of buying the shares the buyer of the securities can decide whether he/she wants to choose to non-objecting beneficiary owner or not. If he choose to become one his name will be listed in the NOBO List.
• BENEFITS:-Normally the issuing company’s request for such kind for information for the purpose communication of important information regarding the company.
• NOBO list: - a NOBO list is a list of the shareholders who do not have an objection with the release of the name and address.
• BENEFICIARY OWNER: - A beneficiary owner is an owner who enjoys the legal right of the ownership even though the legal title and the use remains in others hand. Normally the one using and holding the title are financial intermediaries like banks, brokers, insurance companies etc.
There are two types of beneficiary owners.
Objecting beneficial owners: - objecting beneficial owners (OBOs) are the one who has an objection is releasing about the name and address. Such kind of arrangement is useful in a scenario where the shareholder want to stay away from the hassle of managing the shares.
Non-objecting beneficial owners: - opposite to the objecting owners are the ones who do not object with the release of the names.
Example:-Mr X wants hid broker to buy 100 shares of company XYZ Ltd. He lets his broker keep the papers with him and chooses the option of letting the broker giving his name and address to XYZ ltd. His name will be included in the Nobo list.
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