Paperless stock transactions start on April 2

The Philippine Stock Exchange (PSE) will start full implementation of scripless or paperless trading on Monday, April 2, as it continues to move forward in its aim to transform the stock market along global standards under a demutualized environment.

Jerome Arcangel, vice president for external affairs of the Philippine Central Depository, Inc. (PCD), the implementing arm of the PSE in the paperless trading scheme, told reporters that all trades (buy and sell orders) will now be lodged in book-entry or scripless form, getting rid of the tedious paper work associated with a stock certificate.

The PCD began the shift from physical (stock certificates) to scripless trading in 1997 involving selected stocks such as Jollibee Foods Corp. and other issues.

Arcangel said 85-90 percent of trade settlements done daily at the PCD are already under the book-entry system, with the remaining 15 percent still under the old paper certificates.

He said since the PSE announced early this month the shift to scripless trading, the volume of lodgement or use of the PCD facility has trebled, which means more and more investors and corporate issuers have been converting their stock certificates into scripless form.

PSE president Ramon Garcia conceded that despite its clear advantages and benefits such as security, ease of transaction and faster settlement period, scripless trading is still getting lukewarm reception mainly from the conservative investors who prefer to hold on to their stock certificates and dividend notices as evidence of their shareholdings.

Garcia said that if an investor with a stock certificate opts to sell through the traditional way beyond April 2, he can still do so. However, only scripless trading will apply when buying shares of stocks.

Under the new scheme, it will be the brokers themselves who will lodge accounts for their clients at the PCD, eliminating the need for delivery. — Conrado Diaz Jr.