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Janet Wynn, DTCC Managing Director | March 1, 2005


Paper stock certificates are colorful and can give investors a sense of owner- ship in a company. But avoiding paper certificates-a bastion of 19th century technology-is a serious issue to the industry, because paper stock certificates have a tendency to disappear. On average, something like 1.7 million certificates are reported lost, stolen or counterfeit every year, costing investors or their financial intermediaries about $50 million each year to replace.

On 9/11, billions of dollars worth of paper certificates stored in vaults at the World Trade Center simply vaporized. It took months of work with computer backup facilities and millions of dollars to reconcile ownership records. The safety of securities held electronically, however, wasn’t threatened at all. So why does today’s securities industry, which uses some of the most sophisticated technology available, still issue and distribute equities the same way it did two centuries-as pieces of paper?

Download the Congressional Testimony: Paper Torture