By Lynn Cowan




  WASHINGTON (Dow Jones)--Wall Street's main trade group is campaigning to do

away with paper stock certificates and instead keep track of all investor

holdings electronically.


  The Securities Industry Association is launching a publicity blitz this year

to convince publicly traded companies and their shareholders that a paperless

world will save money and time. Its effort is aided by a New York Stock Exchange

rule adopted this summer that allows listed companies to eschew paper



  So far, only one company, AT&T Corp. (T), has dropped paper certificates.


  At stake is an estimated $500 million in annual savings for all market

participants, from investors to brokerage firms, according to the SIA. The extra

costs associated with paper stock certificates range from the manpower and time

brokerages and companies spend printing, handling and mailing the certificates

to the extra expense incurred by investors to replace those that are lost or



   The Securities Industry Association will evaluate changing its current

three-day trade settlement system to next-day settlement in 2004. It has not set

a definite date to implement a new settlement system.


  Several European countries, including Denmark and France, mandate

electronic-only ownership of stocks.


  "We hope shareholders will get used to this idea, and other shareholders will

follow," said Donald Kittell, executive vice president of the SIA. "We're up

against many shareholders who love certificates."


  Regulators and the SEC in particular are reluctant to mandate electronic book

entry, given the opposition it would face from individual investors, according

to Kittell. So the trade group is developing brochures and talking points to

rally support among companies and investors. It hopes to convince companies

going public to start trading with electronic book entry only, and to sway

existing companies into yanking paper stock certificates during new issues or

other changes, such as AT&T's 1-for-5 reverse stock split in November.


  Some companies aren't likely to follow through no matter what Wall Street

says. Walt Disney Co. (DIS), a company whose stock certificates are popular

gifts, said although it's aware of the advantages of a paperless world, getting

rid of certificates would upset too many shareholders.


  "We don't want to disenfranchise anyone," said Jim Alden, director of

shareholder services for Disney. "I think it's going to be difficult to move

totally out of that environment."


  As for scripophilists - collectors of stock certificates - the end of paper

certificates would probably increase the market value of those in circulation

today by capping the supply, said Bob Kerstein, chief executive of, a Chantilly, Va., company devoted to buying and selling

certificates. But if many companies go electronic, collectors would miss out on

the chance to buy new certificates that could later prove interesting or



  "Certificates do so much in capturing the history of the company," said

Kerstein, who was in the process of raising prices for AT&T certificates Monday.


  -Lynn Cowan, Dow Jones Newswires; 202-628-9783;



  Corrected January 15, 2003 09:54 AM (14:54GMT)


  (END) Dow Jones Newswires


  14-01-03 1905GMT