A beneficial owner position is the quantity of a security that belongs, in economic terms, to the end investor: the person or fund that receives the income, bears the gains and losses and decides how to vote. It is distinguished from the registered holder position, which is the amount recorded on the issuer's register and is often in the name of a nominee, a custodian or a depository. One registered holding in an omnibus account may represent the positions of thousands of beneficial owners.
In corporate actions, entitlements are paid to the registered holder and then allocated down the custody chain according to each intermediary's own books, so every level must keep accurate beneficial owner positions as at the record date. These positions also matter for tax relief, which depends on the status of each beneficial owner, for disclosure of large holdings and for shareholder identification requests from issuers.