How do they become public?

Common stock of companies goes "public" when it files for listing and registration on one of the public exchanges. In order is to be accepted for listing on an exchange, a company has to have its offering registered with the SEC and must submit information about its financial and other corporate history. Once a company is listed on an exchange, its stock may be purchased or sold through that exchange.

Who buys/sells them?

Securities broker firms work with all the exchanges, either directly or through agents, to acquire or sell securities for their clients. Most brokers also will acquire certificates of deposit and U.S. and municipal bonds for their clients and these investments can also be acquired directly from their sponsors (e.g., Federal Reserve, state and national banks, credit unions, etc.).

How are they regulated?

All of the exchanges and financial institutions that offer public investments are regulated either by the U.S. Treasury Department (I.R.S. or S.E.C.) or state or Federal Bank regulators. While this does not guarantee that all transactions will be performed legally and efficiently, there is a high degree of assurance that such will be the case.

Is PENSCO a securities broker/dealer?

At closing, you, the IRA owner, must read, approve and sign all documents before sending them to PENSCO for the final custodial signature. After checking for your signature of approval, a PENSCO Officer will finalize the sale by signing the documents on your IRA's behalf. The signed documents will then be returned to the closing agent, along with funds, for processing.

Can PENSCO clients trade public investments?

Yes. Both before and after being a broker/dealer, PENSCO has allowed clients to invest in public investments through a broker/dealer of their choice.

How does this work?

How does this work? Currently, PENSCO works with a number of broker/dealers, whereby PENSCO establishes brokerage accounts on behalf of its clients at the clients' broker/dealer of choice. These brokerage accounts are then held as an asset within the clients' PENSCO IRA accounts. The registration on the account reads "PENSCO Trust Company, custodian fbo "client name", IRA, Acct. no. ____". In this way, the brokerage account is part of the overall PENSCO client account.

Why hold a brokerage account in a PENSCO IRA?

How does a PENSCO client initiate a public trade?

Conveniently, PENSCO clients are able to deal directly with the broker of their choice in buying and selling securities (e.g., without going through PENSCO to effect the transaction). Once the brokerage account has been established, the client is given direct control over those funds.

Mutual Funds in a PENSCO IRA

PENSCO can also buy mutual funds for its clients directly. PENSCO does not charge a commission for doing so, and you can purchase any of over 4,000 funds. Simply fill out our Investment Authorization for Publicly Traded Investments form to indicate which fund you would like to buy/sell from which company, and PENSCO will then buy or sell the mutual fund of your choice.

Something to be wary of

Do not assume that an investment published in a public newspaper is necessarily a "public investment". Some of the investments are limited private investments which may be violating securities regulations by publishing to the general public without having filed as a registered investment.

PENSCO's non-advisory role

As a regulated custodian, PENSCO can acquire or liquidate public investments for you directly (mutual funds, cd's, treasury bills) or indirectly (stocks/bonds through a brokerage account). However, PENSCO cannot advise you as to investment strategies, particularly for public investments, nor sell you investments.