I recently paid a visit to my brokerage firm to make a deposit. I had a single stock certificate (worth quite a bit by my standards) that had been in my wife's briefcase for more than a year (a long story). I was able to deposit the rather obscure stock in the right account with minimum hassle. As I handed over the certificate, I asked what would happen to it. The answer: it would be destroyed--which makes perfect sense. The world is moving to paperless transactions, but we're still sort of oriented toward thinking about physical certificates.

Some of you might be old enough to recall the paper-crunch of the late 1960s and early 1970s, which left many Wall Street firms scrambling for a solution to the problem of tons of certificates and costly settlement delays. That led ultimately to the formation of Depository Trust Company, the central securities depository, in 1973.

"While not entirely dematerialized, the U.S. market has been moving in that direction--as of the end of January 2010, DTC's vaults held about 1.7 million certificates, down from 2.1 million in January 2009 and 4.2 million when DTC began shredding certificates," notes Securities Technology Monitor.

Other markets that have gone paperless include China, India, Australia, Denmark, Switzerland, Argentina and Brazil. Next to go is the Netherlands. By the end of 2013, all holders of Dutch securities must hand over their certificates to their bank or brokerage firm so that they can be converted into electronic entries.

For more:
- here's the article

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