Unexchanged or unsurrendered stocks are those shares that should have changed hands but have not. When a share goes unexchanged, it is typically the fault of the company issuing the shares; unsurrendered stocks are typically the responsibility of the borrower.
Unexchanged stock was issued by a business or corporation but never delivered due to a merger, acquisition or other change in structure. Unsurrendered stock should have been given back to a corporation by a shareholder, but the shareholder did not act in time to make this move.
In both scenarios, the party on the losing end has the right to try to transfer the shares. However, the process to gain access to unexchanged or unsurrendered stocks can be burdensome and can even involve a lawsuit.
If you feel you cannot make payments to your broker for shares bought on margin, you can voluntarily surrender the shares rather than allowing them to go into the share forfeiture process. This can result in less hassle for you, your broker and the company.
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