Quick Answer
A beneficial owner of securities registered in the name of a broker-dealer, a registered clearing agency, or its nominee may choose whether the owner's identity is disclosed to the issuer. An objecting beneficial owner, or OBO, objects to that disclosure. A non-objecting beneficial owner, or NOBO, does not. The label records a privacy election, not the fact of beneficial ownership.
Does the Beneficial Owner Object to Issuer Disclosure?
A beneficial owner of securities registered in the name of a broker-dealer, a registered clearing agency, or its nominee makes a privacy choice about disclosure of the owner's identity to the issuer.
| Election for nominee-held securities | Meaning | Identity disclosed to issuer? |
|---|---|---|
| Objecting beneficial owner (OBO) | The owner objects to disclosure | No |
| Non-objecting beneficial owner (NOBO) | The owner does not object to disclosure | Yes |
For nominee-held securities, the labels focus on the owner's election about identity disclosure to the issuer.
Memory Aid: OBO = Objects, NOBO = No Objection.
Is the Question About Ownership or a Privacy Election?
For nominee-held securities, an OBO or NOBO designation does not determine whether someone holds securities beneficially.
- Beneficial ownership describes the owner's relationship to the securities.
- OBO or NOBO describes the beneficial owner's privacy election for nominee-held securities.
Exam Tip: Gotchas
- OBO and NOBO classify a disclosure choice. For nominee-held securities, they do not classify the type of ownership.
- The issuer is the relevant recipient. An OBO objects specifically to disclosure of identity to the issuer.
What Should You Check on Exam Day?
- Confirm that the securities are registered in the name of a broker-dealer, a registered clearing agency, or its nominee.
- Identify the person as the beneficial owner.
- Use OBO when the owner objects to identity disclosure to the issuer.
- Use NOBO when the owner does not object.
- Do not confuse the privacy election with the existence of beneficial ownership.