End the paper chase
Paper handling costs all of us!

To improve the efficiency and cost effectiveness of the Canadian capital markets, CDS is committed to eliminating physical securities certificates both in terms of existing issues within CDS Clearing's vaults and the issuance of new securities.

Dematerialization will:

• Reduce overall industry processing and holding costs for processing securities transactions
• Lower the risk and eliminate the potential cost of replacing lost certificates.

• Canada bonds and T-bills are fully dematerialized - even Canada Savings Bonds are paperless when purchased through dealers or the Payroll Savings Program
• Australia, Denmark, France, Japan, New Zealand and South Africa are fully dematerialized countries
• Effective November 2011 all entitlement payments paid to CDS must be in electronic form.

Dematerialization resources

Dematerialization terminology

Book-entry-only (BEO) issue: A security where the entire issue in CDSX is represented by one or more non-negotiable certificates registered in CDS's nominee name and all transactions are completed electronically.

Certificated issue: The document evidencing ownership of a bond, stock or other security. An issue where securities are available in physical form.

Deferred certificate inventory (DCI): A securities position in respect of which CDS and the transfer agent have agreed to defer issuance of a physical certificate.

Dematerialization occurs when the ownership of the security exists only as an electronic accounting record and a physical certificate or other similar document representing ownership in the security has not and will not be issued.

Immobilization is the placement or deposit of securities, usually in certificated form, within CDS and the replacement of those securities with electronic records of ownership on the books of the issuer or transfer agent to facilitate book-entry transfers.

Non-certificated inventory (NCI) is the quantity of an eligible security that is recorded as registered in CDS's nominee name on registers maintained for that purpose on behalf of the issuer, and that is evidenced by an uncertificated security.

Non-transferable issue (NTI): A security in which ownership or registration is no longer transferable but the security remains tradable and CDSX eligible.

Uncertificated issue: A security, which may be evidenced by an ownership statement, but is not evidenced by a security certificate, the issue and transfer of which are registered or recorded in registers maintained for that purpose on behalf of the issuer.