This paper advances a formal account of the architecture of US equity ownership within the indirect holding system, situated at the intersection of statutory property law, regulatory mandates, clearinghouse procedure, and customer account record keeping. The key contribution is a summary table that catalogues every per-trade effect on security entitlements to equities across two tiers: (1) participants against the Depository Trust Company; and (2) customers against securities intermediaries, thereby delineating how cross-tier discrepancies may arise as a lawful by-product of the system’s operations. It illustrates how these discrepancies emerge, propagate, and extinguish under financing arrangements, securities loans, and delivery failures. Further, it examines the controls and workflows whereby such discrepancies are managed in practice. The discussion is presented in a self-contained manner and does not assume specialised prior knowledge of law or post-trade infrastructure. This article is also included in The Business & Management Collection which can be accessed at https://hstalks.com/business/.
Evan Davidson (Mon,) studied this question.