This is getting quite silly.
The unequivocal legal position is that the client is the beneficial owner and entitled to all benefits.
IB's model is not unusual for large clients/institutions with other brokers.
Look at the largest shareholder listing for any big company and you will see they are mostly nominee companies - ie they are shares held on behalf of someone else.
As has been stated before, if this is of concern to you then you should not be trading with IB. There are plenty of retail oriented brokers to choose from.
Here, we are looking at an international broker holding retail client stock (rather than nominee companies investing in other companies) in comparison to the direct and more transparent holding structure of CHESS.
Another point of distinction is that larger instos would have more influence and clout when it comes to protecting their holdings and enforcing their rights than a small retail investor. Presumably, they would know the exact financial and ownership structure of the company concerned and how their legal title has been affected as they would be well advised by laywers and accountants. Retail investors rely more on public documentation and representations from retail customer service staff. Here on ASF, we have been fortunate to have a senior IB representative's direct input (Steve-IB) so our better informed than otherwise would be the case.
On the whole it appears that the clarification we've received so far is the full extent of the explanation as to the holding structure. As it is different to the CHESS structure there is always going to be some level of discomfort to some.
As elbee points out, potential clients are now free to choose from the range of brokers with the information at hand in mind.
I'm sure that IB is constantly working at improving and refining communicating information about itself to clients. More detailed information may be forthcoming in future.
This issue may have to be laid to rest for the time being.
PS: Steve, if you want to discuss some of the tax forms and get member feedback here on ASF you are most welcome. You may start a new thread and post attachments as examples.