Quick Answer
A beneficial owner may choose whether the owner's identity is disclosed to the issuer. An objecting beneficial owner, or OBO, objects to disclosure. A non-objecting beneficial owner, or NOBO, does not object. These labels describe a privacy election, not whether the person owns securities beneficially.
The Beneficial Owner's Election
A beneficial owner makes a privacy choice about disclosure of the owner's identity to the issuer.
| Election | 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 |
The labels focus on the owner's election about identity disclosure to the issuer.
Memory Aid: OBO = Objects, NOBO = No Objection.
Beneficial Ownership vs Privacy Election
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 owner's privacy election about disclosure to the issuer.
Beneficial ownership -> privacy election -> whether identity may be disclosed to the issuer.
Exam Tip: Gotchas
- OBO and NOBO do not classify the type of ownership. They classify the owner's disclosure choice.
- The issuer is the recipient relevant to this election, so an OBO objects specifically to disclosure of identity to the issuer.