Elimination of Paper Stock Certificates - Chronology
Like everything else, stock ownership is going digital! The securities industry calls it "dematerialization" - we call it sad. Brokers no longer provide stock certificates (or charge a huge disincentive fee) and a growing list of companies like Disney have stopped issuing paper. The industry-wide effort started over 30 years ago but momentum is building:
2020 - DTC white paper calls for elimination for all stocks certificates within a couple of years after Covid stresses the system. Industry-wide work group established to make it happen.
2018-19 - The pace of companies eliminating paper certificates quickens.
2015 - Computershare, the largest transfer agent in the U.S., announces it will charge a $25 disincentive fee to issue paper stock certificates.
2009-12 - The Depository Trust Company (DTC) starts charging stock brokers a $500 fee to issue stock certificates to customers. Brokers pass on the $500 fee to customers.
2008 - 1/1/2008 was the target date established for all companies on the NASDAQ and NYSE to be set up on the DRS. Although the target gets moved out, most companies comply.
2007 - As of 1/1/2007, any new issue on NASDAQ or NYSE had to be eligible for electronic registration on the Direct Registration System (DRS).
1970's - Brokerage firms took the first step to streamline paperwork by establishing a central depository, the Depository Trust Company (DTC) where all stock certificates could be maintained.
2006 - Delaware, the state where many companies are incorporated, changed its state law removing the requirement for physical stock certificates. This got the ball rolling.
1960's - Financial district messengers carried satchels of stock certificates from one broker to another. During peak periods, the stock market would be closed one day a week to allow brokerage firms to catch up on paperwork.
CNBC story: Facebook and other valuable stock certificates