Can You Still Get Paper Stock Certificates?

Stock certificates served as tangible proof of ownership in a company. These physical pieces of paper were the primary method for recording and transferring stock ownership, offering a direct connection to the issuing corporation. Each certificate contained specific details like the shareholder’s name and number of shares. The financial landscape has since moved towards streamlined, technologically advanced record-keeping.

Are Paper Stock Certificates Still Issued?

The financial industry has largely transitioned away from physical stock certificates to electronic “book-entry” systems. This shift, gaining momentum in the 1970s and 1980s, was driven by the need for efficiency, security, and reduced administrative burdens. Electronic record-keeping reduces the risk of loss, theft, or damage, and simplifies transactions. Most shares purchased today are held in book-entry form, with ownership recorded digitally by a central depository like the Depository Trust Company (DTC) or a company’s transfer agent.

While electronic registration is standard, physical stock certificates are still available upon specific request from most companies or their transfer agents. This is a custom request, and some companies may have eliminated the option. Investors often desire a physical certificate for sentimental reasons, as a collectible, or for a tangible representation. Holding a physical certificate does not confer different ownership rights than holding shares electronically.

Requesting Paper Stock Certificates

Obtaining a physical stock certificate involves contacting your brokerage firm or the company’s transfer agent. Brokers can facilitate the request. Brokerage firms may charge a fee, often between $25 and $500. Inquire about fees and estimated timeframes before proceeding.

Alternatively, contact the company’s transfer agent directly. A transfer agent is a third-party entity maintaining shareholder records. Their contact details are usually on the company’s investor relations website or in its annual report. When requesting a certificate, provide account details and proof of ownership.

For certain transactions, particularly those involving the transfer of ownership or older certificates, a Medallion Signature Guarantee may be required. This is a special stamp provided by a financial institution, such as a bank, credit union, or brokerage firm, that verifies the authenticity of a signature and ensures the signatory has the legal authority to conduct the transaction. A Medallion Signature Guarantee protects against fraudulent transfers and is distinct from a notary public’s seal. Financial institutions providing this service are typically members of specific Medallion guarantee programs, and they often require you to be an established customer. Delivery can take several days to a few weeks.

Managing Paper Stock Certificates

Once an investor obtains a physical stock certificate, its safekeeping is the owner’s responsibility. As negotiable instruments, similar to a car title, secure storage is recommended. Options include a fireproof home safe or a bank safe deposit box to protect against loss, theft, or damage. Lack of precautions can lead to complications and costs if misplaced or destroyed.

Transferring ownership of shares represented by a physical certificate requires endorsing the certificate on the back. This requires a Medallion Signature Guarantee to authenticate the signature and prevent fraud. The endorsed certificate must then be submitted to the company’s transfer agent for proper registration. Selling shares held in physical certificate form usually requires converting them back into electronic or “book-entry” form through a brokerage firm or the transfer agent before sale.

Replacing a lost, stolen, or destroyed stock certificate is complex and potentially expensive. Report the loss to the company’s transfer agent immediately to place a “stop transfer.” The replacement process involves submitting an affidavit of loss, providing proof of ownership, and obtaining an indemnity bond. This bond protects the company and its transfer agent against losses if the original certificate resurfaces. An indemnity bond can cost 1% to 3% of the stock’s market value, plus administrative reissue fees from $50 to $500.