Custody-Only Trading
A system in which shares must be registered to the holder by name and can only be traded in physical form.
Investopedia Commentary
The adoption of custody-only trading requires any purchases or transfers of stock to be placed through the issuing company's transfer agent.
Some companies implement custody-only trading because it protects shareholders from naked short sellers as the shares must be physically held by the seller.
Related Links
Brokers and Online Trading
See also: Bearer Form, Custodian, Holder of Record, Naked Shorting, Safekeeping, Transfer Agent