Editing Security (finance) (section)

=== Non-certificated securities and global certificates ===
Modern practice has developed to eliminate both the need for certificates and maintenance of a complete security register by the issuer. There are two general ways this has been accomplished.

==== Non-certificated securities ====
In some jurisdictions, such as France, it is possible for issuers of that jurisdiction to maintain a legal record of their securities electronically.

In the [[United States]], the current "official" version of Article 8 of the [[Uniform Commercial Code]] permits non-certificated securities. However, the "official" UCC is a mere draft that must be enacted individually by each [[U.S. state]]. Though all 50 states (as well as the [[District of Columbia]] and the [[U.S. Virgin Islands]]) have enacted some form of Article 8, many of them still appear to use older versions of Article 8, including some that did not permit non-certificated securities.<ref>{{cite web|url=https://www.law.cornell.edu/uniform/ucc.html#a8 |title=LII: UCC – Locator |publisher=Law.cornell.edu |date=2004-03-15 |access-date=2012-04-24}}</ref>

==== Global certificates, book entry interests, depositories ====
To facilitate the electronic transfer of interests in securities without dealing with inconsistent versions of Article 8, a system has developed whereby issuers deposit a single global certificate representing all the outstanding securities of a class or series with a universal depository. This depository is called [[The Depository Trust Company]], or DTC. DTC's parent, [[Depository Trust & Clearing Corporation]] (DTCC), is a non-profit cooperative owned by approximately thirty of the largest Wall Street players that typically act as brokers or dealers in securities. These thirty banks are called the DTC participants. DTC, through a legal nominee, owns each of the global securities on behalf of all the DTC participants.

All securities traded through DTC are in fact held, in electronic form, on the books of various intermediaries between the ultimate owner, e.g., a retail investor, and the DTC participants. For example, Mr. Smith may hold 100 shares of Coca-Cola, Inc. in his brokerage account at local broker Jones & Co. brokers. In turn, Jones & Co. may hold 1000 shares of Coca-Cola on behalf of Mr. Smith and nine other customers. These 1000 shares are held by Jones & Co. in an account with Goldman Sachs, a DTC participant, or in an account at another DTC participant. Goldman Sachs in turn may hold millions of Coca-Cola shares on its books on behalf of hundreds of brokers similar to Jones & Co. Each day, the DTC participants settle their accounts with the other DTC participants and adjust the number of shares held on their books for the benefit of customers like Jones & Co. Ownership of securities in this fashion is called [[beneficial ownership]]. Each intermediary holds on behalf of someone beneath him in the chain. The ultimate owner is called the beneficial owner. This is also referred to as owning in "Street name".

Among brokerages and mutual fund companies, a large amount of mutual fund share transactions take place among intermediaries as opposed to shares being sold and redeemed directly with the transfer agent of the fund. Most of these intermediaries such as brokerage firms clear the shares electronically through the National Securities Clearing Corp. or "NSCC", a subsidiary of DTCC.

==== Other depositories ====
Besides DTC in the US, central securities depositories (CSDs) exist on a national basis in most jurisdictions. In addition, two major international CSDs exist, both based in Europe, namely Euroclear Bank and Clearstream Banking SA.