eSignature Lawfulness for Stock Certificate in United Kingdom

How to eSign a document: eSignature lawfulness for Stock Certificate in United Kingdom

Oh in finishing up the packet for for the teachers and just talk a little bit about sort of the certificates themselves and the how they were to convey value in so we've got a couple of numbers on here is there a are there any numbers in particular that you kind of wanted to highlight while we're while we're here that you think would be a particular importance to the teachers so why don't you take a couple of numbers and then we can just kind of go over a couple of numbers on the certificate I'll just say that the certificates you know over time they've had stock certificates and really certificates at one point in time were to show that you own stock in a company that you had you know an interest in equity interest in the company and now you know certificates are done electronically and as a result you miss all the steps that people had to go through to get a certificate issued but these particular certificates or issued in a certain standardized format because the stock exchange is required it each Stock Exchange required every member to have a different border around it they all had to have unique borders they uh they had to have unique vignettes which is a picture that's on the certificate they had a show who their transfer agent was who their registrar was the registrar's who when they who registers the stock to begin with transfer agent when a trend when transfers ownership for one person to another they needed to show what type of stock it was the type of stock they were buying but you know it was more of a recognition that you bought equity in that company but as it turned out people lose stock certificates mm-hmm and then they got him replaced so a lot of times people think because I have a physical stock certificate that was issued in my name I might name or relatives name that was endorsed over to me that it still has equity in that company and it may have that but if a company can't get a hold of a shareholder for a certain period of time they're required to escheat that value of that certificate or the actual stock over to the state where that person lived and as a result of that they don't necessarily have ownership anymore in the company because it was turned over the state and they have to go to the unclaimed funds of the state to see if the states have any money sitting out there for them and it's unfortunate because people you know and it's evolved over time in this whole process where people would think that if I have that certificate stashed away in a safe deposit box I've endorsed the back of it I'm giving it to my relative that they can cash it in but if they lose contact with the company they should certificate it gets turned over to the state now and whatever value that you had in that certificate you know the states would get those stocks and then they would sell the stock at that point done some states will save the money they sold it for in the state funds but other states will commingle it with the state funds which is very unfortunate because if you don't get a hold of the state within a certain period of time you're out of luck and you know people need to know that so it's evolved of what the certificate you know represent the beginning it was actually a contract a document of legal document and now it's turned into a collectible in a sense because you know it makes it much more difficult now to have a stock certificate to be able to sell it if you want to see if you let's say your stock certificate is still outstanding with the company and you want to sell it you got to run through a lot of Hoops to sell it to you got to find the transfer age and got to contact them they're gonna say okay we'll send us a consent of the certificate we'll get back to you make sure it's still on our books and records and then it takes you know it could take a few weeks to be able to sell a stock meanwhile if you bought a stock electronically and you have it in your name on your brokerage account you can sell an instantaneously through your stock broker and that's why they've gotten away from issuing stock certificates is because the paper was so cumbersome and it was you know so many steps you had to go through and somebody hands you had to go through them to process a transaction and in fact during the 60 70s and even 80s I'm not sure about the nineties they had to keep all the certificates and if it was in the stock brokers name they had a store at the depository and they would they had a store it there to you know every transaction that was their way of keeping a record of it and then whenever it's sold they had to pull that certificate and then cancel it then it would end up in storage and these certificates that have cancellation marks on it they're either the transfer agent was required to keep it for five years in storage before they can even dispose of it a lot of these certificates ended up staying in storage forever and then they ended up getting in hands of collectors as they found them no abandoned buildings so it's interesting because I think what you're you know what you're really kind of describing is that these pieces of paper would represented an economic contract between the owner and the company and as such you needed to have a legal process right to protect property rights I mean this represented an ownership stake in us so when you look at you know again sort of the I guess it really was more of a function of how laws were conveyed and over time as we've got as we have you know transformed in our society from a more physical contract to more sort of digital transactions the physical paper doesn't have nearly as much value in in all the infrastructure that was involved in that physical structure has all been completely dissolved so now it's infinitely even more cumbersome to transact in the physical world than it is in the digital world so I think that's introduced I won't that I have to talk a little bit about you know when we go through and we talk a little bit about how technology has has changed point one point that's interesting on me is that most people don't know okay I'm sure you know what it says non-accessible shares and what is that every stock certificate I see this one here yeah they all say not accessible mm-hmm and the different but accessible was is that when stocks were issued early on people would they were in the form of a contract that when you bought the shares to invest in this company if the company wanted to do a capital call and they needed money to survive you were required you made a you entered into a contract to contribute money to that company so and if they had a like a capital or assessable call to require more capital people would have to put money in right right and as a result of that they eventually faded that out and that's why they say not accessible to let people know well if you're buying stock you know you're not required to put money in if we need the money yeah it's interesting it's it's similar to I think it's an another core aspect that has changes the is the the par value well it's a the par value on the stock typically would represent a fixed quantity of capital and then the firm would utilize that a particular fixed quantity of capital over time par value you know that sort of benchmark up par value has basically been whittled down to in many cases I think I have even certain seen certificates that have been issued that say no par what equity value so it's not I mean it's not acknowledging the original contribution that you had in there at one time par value was the amount of money that the company could never touch it was that all done legal hurdles actually yeah yeah what I do think is interesting too is just to kind of further that you were talking about you know so when I talk a lot about these documents as economic contracts one of the most important things is it's called the right of assignment which basically means that you as the owner of this contract right between you and the company have the right to assign your ownership interest at any point in time and so on the very back if you look at the back of these certificates you'll see they're all pre-printed on here and it reads for value received and then you would identify yourself as the owner of their certificate you would acknowledge the amount of you know money that you received for it and then you were freely you know you had the right to freely determine right whatever value you wanted you didn't have to go to an exchange you can completely do whatever you want of your of your own and then you wouldn't be saying we'd sign your name recognize the value and then it would be sold but then the process that was started was that okay that knew the old certificate had to be tendered they'd have to be cancelled and then new certificate with a new serial number then we get the serial number in the upper left-hand corner that would have to be issued and then this paper process would kind of start over and over and over again any time anybody ever bought or sold you would have to record the new owner issue a new certificate and there was like you said in the 60s you know when trading volumes started to get into the tens of millions of shares and you know a lot of these firms had difficulties meeting the physical delivery what and that's where this dtc dtc is our TT Depository Trust Corporation is is a lot like the automatic cheque clearing right so we're the banks would send checks instead of sending him individually to each other they would have a centralized location where all the cheque clearing up clear exactly a clearinghouse and then so this dtc was very similar so if you were a brokerage a member of this DTC you would all the things would settle right there gonna be so much much much easier process okay so one of the things that I also like to talk about when we're talking about these certificates so I guess so I just want to highlight that some of the things we talked about we talked about the serial number which was number two the upper left-hand side you mentioned the registrar which is the person who is responsible for recording so whoever owned the certificate you had the corporate seal you have the officers purpose intrusive they were either hand sign or they could have their printed signatures printed on the stock certificate they would have the type of stock it was whether it was a capo stock common stock preferred stock restricted stock for that matter and you know it's it's all of these you know steps somebody had to do you know that's the thing about this another just look at this piece of paper right here it was originally issued at some particular point and you can see we've got the whole bunches on here where and then somebody had to cancel and it had before the head machines I had a manually stamp them and canceled yeah yeah I mean I'm a genetic or you didn't go to school and then your job was just canceled stock and all of a sudden the automatic counselor how do you how do you retrain really it's it's a be worn yeah it still does and we'll continue to write it will definitely continue to what do you know the aspects that I like to talk about with these certificates is is a little bit with the but the artwork itself I mean because these documents convey economic value you know there are some design elements in there that have you know were created specifically to prevent counterfeiting and they all had to be unique and if you look closely at these certificates they they have these little dots on them mm-hmm and those were like for counterfeit protection so you see that's interesting I never noticed that you know it was really funny when I first got my website somebody called up and she said I'm setting I'm sending the certificate back it has mold in it so then the other thing too if you look at the certificate you'll see the holes punched in it and those were the dates it was the processor who processed it or what machine they process it on and then the data was cancelled so that's how you find out what the cancellation did you know earlier they were hand stamp but then again the machines with yeah yeah we have some what I'll do is I might be able to if any of these teachers are interested I might be able to have access through our digital archives where we can you know have any we're really talking about the sort of you know 19th century certificates that we had the the hand stamp cancellation or they would physically deface the document well or they cut out the signatures they would cut out the signatures right I think one of the common ones that I show here and I'll probably throw it up while we're talking is the the West Show Railroad and the Western Railroad has you know it's the whatever the constant abuse yeah and I have the certificate where it's they're defacing these signatures of the because the signatures is what conveys authority on the doctrine so you need to have some way to sort of disavow that economic interest in and by defacing the document on the on the signatures that's how it was done in a physical a lot of those were bonds where's the stock certificates to so they would a lot of times they would cancel each cup on on the bond oh I have that I need to make sure that I can throw that image up there as well too I kind of want to just sort of finish up so is there anything else on here in particular that you had always found interesting in terms of these certificates you know that one it's a great point that I always keep in mind is the tens of thousands of people these companies employ to issue to distribute to cancel to store all of these certificates and now it's all been replaced by click-click yeah when you think of it and that's the really significant thing on paper and these type of certificates is that you can look through this and read between the lines and see the processes that took place and now it's all buried in computer code so you really the same processes take place now yeah they all have counterfeit protection they all have unique serial numbers registrar exactly you know the corporate registration that doesn't thing but you don't see them so this tells a story and it helps explain the process that each stock when you purchase them when they all go through [Laughter]