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Stock certificates slow to come

Q: When my certificates of deposit came due, I put the money in a bank account. Since then, I have been taking money out of the bank account and selectively investing in stocks and mutual fund shares. It sometimes takes three weeks to get the money to the brokerage house at which I make the purchases. Will I be penalized if I take the money out of the bank account and take it to the broker? Doing that could save two weeks' time.

A: There shouldn't be any penalty. Also, you should not be encountering those delays in getting the money to the brokerage.

Assuming the money is in a bank checking account, you can make withdrawals by writing checks. After buying securities and receiving a confirmation statement from the brokerage, simply write a check for the amount of the purchase and mail the check to the brokerage. That's the normal procedure.

It's possible, but unlikely, you have instructed the bank to transfer the amount of each stock or mutual fund purchase from your bank account to the brokerage. If that's the story and there are long delays, the bank is goofing off. But I suspect the delays you mention are an entirely different thing and involve the time it takes for stock certificates to reach you.

When you make a purchase in a "regular way" trade _ the method through which stocks usually are bought and sold _ you have five business days to pay and "settle" the transaction. After that, it sometimes takes two weeks or longer for the paperwork to be completed and the certificate to be delivered to you.

Q: Why is it important to obtain stock certificates? The big brokerage firm I use pays dividends on time, and I don't have to send certificates by registered mail when I sell.

A: It's not important, if you are happy with the street-name account. With that arrangement, the brokerage is the registered owner of the stocks and acts as your nominee. You are the beneficial, or real, owner. Dividends, proxy statements for voting at stockholder meetings, shareholder reports and other literature from companies in which you own stock go to the brokerage, to be sent along to you.

Dividends should be credited to your account immediately. And, if you have so instructed the brokerage, checks for the amount of those dividends also should go out to you _ pronto.

That's where the hang-up often occurs. Mail from readers shows that some brokerage firms are slow.

Q: A couple of years ago, my husband and I set up living trust with the local office of a major brokerage firm. We are generally pleased with it but do have one concern.

Our dividends are sent to the brokerage, which sends them by mail to our bank. A recent dividend came to the brokerage on March 20. It was March 30 before the money was sent to our bank and entered in our bank account. Most of the time, it is not a lot of money, but we live on our dividends and Social Security benefits.

Isn't it feasible to send the money electronically to the bank? Our local broker said that isn't done. Should I write the main office?

A: Yes. Electronic transfer of money is not only do-able but routine. Billions of dollars move that way every business day. If the answer comes back "no," you have an alternative. Along with your other securities in the living trust, open a money market mutual fund account, on which you can write checks.

William Doyle welcomes written questions but will be able to give answers only through the column. Address questions to William Doyle, King Features Syndicate, 235 E 45th St., New York, NY 10017.