Has anyone lookly into the stock settlement system used by the ASX called CHESS or Clearing House Electronic Subregister System? I believe it is operated by the ASX settlement corp (ASTC) registering the share title as 'electronic' Is there any possible way of PHYSICALLY getting the certificates of shares rather than some electric coding to say i own shares? (Here is AUS anyway) We all know the paper market is going to go bust big time (derivatives and all those paper financial instruments ) but i find it rather concerning that there is some clearing house here or overseas that PHYSICALLY holds a large portion of the entire ASX company certificates and the rightful owner (you and me) are just some make believe holder? They trade back and forth so fast now that the paper exchange is obviously to timely and so they speed up the system with digital crap. If things got bad (which they will!) there could be some tiny clause on page 123.5 that could say the clearing house is the rightful owner (more like the bankers) and the shareholder is left out in the rain? Bellinvest
There is no such thing as share certificates anymore so no. However you are issued a chess statement every month if you are trading regularly during the month or whenever there is a change in your holdings of a particular share. If the CHESS computers wiped for some reason you could prove that you owned shares as of the date of the chess statement. The clearing house nor the banks or stock brokers are never the rightful owners - you as a share holder on the register are the rightful owner. Proving it is a problem but at no time does any clearing house have ownership. They are just a third party - a little like an escrow holding company. Not much of a comfort but that's "the way we roll" now. malachii
too much of Jim Sinclair who is a broker, he would want to hold cert, if his house goes down, his $ is safe. but for ordinary people when the house went down, it will not take you down...so long it is cash ac you hold the ownership in CHESS. there is still certificates, but usually people who own a lot loves to vote, and it can be cumbersome to go scrip and scrip-less again. certificates can be useful when there is capital control like Malaysia did during the Asian crisis...
Thats not true that there are no share certificates anymore - there are company issued certificates that are not chess sponsored
In Australia they are not company issued share certificates rather company sponsored chess certificates. That is why their SRN starts with an "I" rather than an "X" (ie they are issuer sponsored). If you look on the certificates they will usually still be processed by one of the main CHESS Investor services companies (eg computershare). Some of the larger companies (Qantas is one) have their own clearing house but it is still a part of the CHESS system. Simple to check - just contact the company you own shares in and ask for a share certificate because you don't want to be CHESS sponsored - see what turns up in the mail. I have a couple of them in front of me now. Even though they are sponsored by the company - I still also receive CHESS statements for them. The only difference is that I have to quote the "I" SRN to a broker if I wish to sell them rather than just putting in a normal sell order and letting the broker deal with everything. malachii
Essentially, no. What you're describing as a "certificate" is more properly classified as a "bearer negotiable instrument", with that piece of paper in and of itself being your only claim to shares in a company. If you lose it, you're screwed. If you buy one from someone else, you have no way of knowing how many copies of the certificate they've already sold to other suckers people. The CHESS system does for shares what the Torrens title does for land holdings by creating a central registry of who owns what. The Shareholder Reference Number (SRN) malachii mentioned above is CHESS's way of grouping one or more share holdings together, but how those shares can be dealt with and traded depends on what your holdings arrangements are - as he mentioned, numbers beginning with "I" indicate that the shares are Issuer Sponsored, which means the company that issues the shares is responsible for maintaining your personal information and registering any changes in ownership. SRNs beginning with "X" indicate that the shares are Broker Sponsored and a licensed broker is responsible for those things. In both cases, the Sponsor (the company or your broker) is required to inform CHESS if there is a change in ownership, but how people go about effecting that change in ownership is up to them - a company might offer to buy back some shares privately without going through to stock market (keeps transaction costs down) or a broker might use their access to the market to buy or sell shares on your behalf (and keep a record of you as the beneficial owner). CHESS will actually issue you with a dead tree holding statement saying exactly what you own (which can be very handy if, like me, you've had to administer an estate with shoddy record keeping practices). Pro tip: Broker Sponsored shares (SRNs beginning with "X") can contain multiple holdings, so your entire portfolio uses the same SRN. If you want to move brokers from, say, ETRADE to CommSec, you can just enter the single SRN on the transfer form and your whole portfolio gets shifted over to your new broker. Issuer Sponsored shares (SRNs beginning with "I") are managed by each company separately so you have to deal with the paperwork for each holding individually.
