What Is a Letter of Transmittal Related to Stocks?

by Molly Sawyer ; Updated July 27, 2017
Stocks are issued as book entry shares or as paper certificates.

A letter of transmittal accompanies stock certificates when they are sent by a stock holder to a broker/dealer or transfer agent, or by a stock issuer to a stock holder. The letter provides written instructions for handling the stock, such as if a transaction or registration change is desired. Check with the receiving agent or broker/dealer for specific letter of transmittal requirements. Some provide form letters to use when sending a stock certificate.

Actions Performed With A Letter of Transmittal

Transmittal letters facilitate a variety of transactions related to the underlying stock. The stock can be sold or exchanged, deposited into an investment account or donated to a charity. A letter can instruct the agent to change the registration on a stock -- for example, when individual assets are retitled into a trust. The issuer of a stock might send a letter of transmittal to shareholders detailing corporate restructuring or stock splits. In this case, the letter would also include instructions for completing the certificate to take part in the offering.

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