Euroclear Nederland Closes Era of Paper Certificates
Euroclear Nederland (formerly Necigef), the Dutch central security depository (CSD), said that as a key contributor in delivering a ‘paperless’ securities market for the Netherlands it recently completed the full-scale dematerialisation process of all Dutch securities classes (bonds, equities and depository receipts) for the Dutch capital market.
The group added that the final securities certificate to be entered into the CSD’s electronic registration system marks the end of an era in the use of physical certificates to connote investment ownership. The process of dematerialisation was initiated by Necigef in the 1990s following a market-wide call to modernise and make the Dutch capital market safer and more efficient.
Subsequent changes to Dutch securities law in 2000 enabled Euroclear Nederland to use a single global certificate to represent an entire issue, instead of printing an individual piece of paper for each certificate. Changes to laws which took effect on 1 January 2011, meant that at the end of 2012 all securities held in custody with the CSD have been converted into either electronic book-entries or a global note.
“Today, we have consigned the last listed paper certificate in the Dutch giro system to history,” said Valerie Urbain, chief executive officer (CEO) of Euroclear Nederland. “The Netherlands has always had a strong affinity with stock certificates. We can trace the world’s oldest share certificate to that of the Verenigde Oost-Indische Compagnie’s issue of 1606, the first public share offering anywhere.
“Putting nostalgia aside, Euroclear Nederland, together with our regulators, local banks and other parts of the Dutch capital market infrastructure, is ready to usher in a modern, electronic form of securities ownership.”
At its height in the early 1990s Euroclear Nederland’s vaults in Amsterdam, which are now closed, held over eight million pieces of paper representing client assets worth €800bn. The new book-entry service offers significant cost savings for Dutch banks, as well as risk reductions, as they no longer need to support costly infrastructure and security systems to house securities certificates.