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Uh Oh – European Union Eliminating All Stock Certificates

Take note – A sign of things to come.

According to The Independent, a UK newspaper, the European Union has introduced an initiative that will stop the issuance of all stock certificates by 2015 and wipe out existing ones by 2020.  See the full article here.

It’s just a matter of time before this happens in the U.S. 

As we’ve been telling you, the securities industry in the US, Europe, and around the world wants to eliminate paper stock certificates in order to save money.  Instead, ownership would be registered electronically and shareholders would get a statement showing their ownership.  It makes sense, but we hate to see it happen.

The U.S. has already made significant strides that have reduced paper stock certificates.  In 2009, all companies issuing new stock were required to at least allow electronic ownership and beginning a few years ago, the Depository Trust Corporation (the company handles paper stock certificates for brokers) started charging stock brokers a $500 fee for issuing paper certificates.  It’s purposely high in order to discourage anyone from requesting paper.  Guess who pays the $500?????  Yep…..You!

It turns out some brokers like Scottrade simply stopped offering their customers paper certificates rather than pass on this excessive fee.  In other cases, brokers websites and fee schedules have not caught up with this huge disincentive fee.  We have experience with eTrade several months ago and Ameritrade a few years ago having stated rates of $50-$75 only to find out late in the process that it would actually be another $500!

Right now, GiveAshare.com is enjoying a sweet spot because we can still provide the authentic registered stock certificate (with NO excessive fees) but as we can see from what’s happening in Europe, those days are numbered.

We are adding to our personal collection because we see that the collectible value of stock certificates will skyrocket when they are eliminated.  If you don’t believe me, just check out scripophily.com which offers old stock and bond certificates.

One Response to “Uh Oh – European Union Eliminating All Stock Certificates”

  1. JD says:

    I found an excellent website for buying or selling old collectible stock certificates. It’s also a good resource for researching them since many include company histories. http://www.oldwesthistorystore.com

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