Paper Certificates Versus Book Entry: Facts You Should Know

Do you own paper certificates? Holding physical shares remains a popular choice for investors, but there are risks such as theft, loss or damage to the paper certificates. And the risk isn’t just from storing them in a box in your flooded basement. When Superstorm Sandy hit the East Coast in 2012, thousands of certificates were damaged when Wall Street vaults were flooded – slowing down investors’ access to their shares until cleanup was completed.

The safer, more efficient choice is to hold your shares via book-entry registration through the Direct Registration System (DRS), when available. The good news is that most companies offer this option. With DRS book entry, your ownership is recorded electronically on company records such as those maintained by Computershare. This eliminates the risk of damage or theft associated with physical certificates, and it simplifies and speeds up the movement of shares for transactions. Plus, by managing your shares electronically you can also take advantage of the investor tools available through the Investor Centre website.

Virtually every company listed on a major stock exchange (New York Stock Exchange, NASDAQ or American Stock Exchange) allows shareholders to convert certificates to book entry in DRS. If you have stock certificates for one of these companies and Computershare is the agent, you can take advantage of DRS by sending your certificates to Computershare with a brief letter indicating that you want them converted to DRS shares. The address is below. Once the shares are received and deposited into your account, you will receive a statement acknowledging the deposit.

Here are a few key points about how to send in your certificates:

  • Please do not sign your certificates. Signing them is similar to signing the back of a check; if the securities were lost or stolen they might be negotiable.
  • Registered or certified mail is recommended, with return receipt requested.
  • Insurance is also recommended to cover you for the cost of an indemnity bond, which would be needed to replace your certificates if the package is lost. You should insure the package for 3% of the face value of your certificates (or $20, whichever is greater). So for example, if you are sending a certificate worth $10,000, you should purchase insurance covering 3% of that value – $300. This costs less than $5 if you use the US Postal Service. To calculate the face value of your certificate, take the number of shares represented by the certificate and multiply by the previous day's closing price.

Mail sent to us via the US Postal Service should be addressed to:

P.O. Box 43078
Providence, RI 02940-3078
Attn: Shareholder Services

If you use a private mail carrier, such as FedEx or UPS, your documents should be addressed to:

250 Royall Street
Canton, MA 02021
Attn: Shareholder Services

If your company is not listed on one of the major stock exchanges, please call Computershare to find out if DRS is offered for that company. You can find the telephone number here – just search on the company name or ticker symbol, then scroll down to select the “contact us” link to get the number.

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