The ability of an investor to transfer securities from one name to another without paying transaction fees. The free right is conferred, for example, where stock in street name (i.e., registration in the name of a broker-dealer) is transferred to the customer’s name and as such the latter becomes eligible for a dividend reinvestment plan.

Free of exchange also involves an investor being able to transfer a security from one form to another without charge. For example, this right allows a security owner to transfer a certificate from registered to bearer form, or vice versa, without incurring any charge.