Lost Securities Bonds

A lost securities bond is a type of surety bond thatprotects a person or company when they have lost, misplaced, or damaged a security bond, stock certificates, payment check, insurance policy or other important documents. The bond is required by a bank or a financial instrument transfer agent who agrees to pay the original owner the value of the lost bond.

In exchange, the company who issued the bond requires the surety bond to state that the agent/institution will not suffer any economic loss if the instrument later surfaces and is sold or traded.

There are two types of penalties incurred in lost securities bonds.

Open penalty: This is required when the lost instrument has a fluctuating value, such as stock certificates.

Fixed penalty: This is required when the lost instrument has a fixed value,such as certified checks.

Benefits of lost securities bond

Protecting financial assets: The bond protects your financial investment if you have lost the document that proves ownership and ensures that you can still get its value.

Protecting the issuer’s interests:  The lost securities bond ensures that the issuer does not suffer any loss if the lost instrument surfaces later and is sold or traded in a manner that can harm the issuing company’s interest.