A french bearer security is a financial instrument where ownership is presumed to belong to the holder of the physical (or dematerialized) certificate. The issuing entity does not record the holder or the transfer of the security from one holder to another in its register. The presentation of coupons (physically detached in the case of a physical security) triggers the payment of subsequent financial flows by the issuer.

This is the most common and accessible form of holding securities in financial markets, whether it be stocks, bonds, or options. Although most financial securities today are "dematerialized" rather than physical, the bearer form remains relevant. Financial securities are still represented by an entry in the owner's account. Bearer securities are those that can "change hands" without necessitating an update in the issuer's register, which remains unaffected.

The advantage of the bearer form for the holder is the ease with which securities can be acquired and sold, whether through a traditional securities account or within a share savings plan (PEA). For the issuer, the bearer form facilitates trading and the transfer of value, reducing potential costs.

The disadvantage of the bearer form for the issuer is the lack of knowledge of the final holder's identity. Procedures like the Identifiable Bearer Security (titre au porteur identifiable - TPI) allow this challenge to be mitigated. For the bearer of such securities, the downside is that they may not have access to the same benefits as those attached to registered securities, particularly in the context of long-term holding (custody fees, long-term holding benefits, etc.).

The concept of "bearer" takes on its full meaning in contrast to other forms of holding. Indeed, a share can be held in bearer form, in administered registered form, or in pure registered form. The distinction between these three forms of holding primarily lies in the intermediary acting as the interface between the issuer and the shareholder.

From a legal standpoint in France, a bearer share implies that the security in question is held by a financial intermediary duly authorized by law to provide custody services as per Article L541-2 of the Civil Code. In this sense, Article R211-2 specifies that when securities are held by a financial intermediary such as a credit institution or an investment firm, the securities take the bearer form. This rule is also found in the General Regulation of the Autorité des marchés financiers (RGAMF), which further clarifies that financial securities admitted to central depository operations can be held in bearer form.

Conversely, Article R. 211-2 of the RGAMF states that "when financial securities are recorded in a securities account held by an issuer or by a person acting on its behalf, they take the so-called 'registered' form." This means that the securities account is managed directly by the issuer or by an intermediary acting on its behalf.