book-entry security

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Book-Entry Security

A security where the certificate is not actually given to the holder. Instead, the holder is given a receipt and the information is held electronically. Book-entry securities have become more common as computers become more sophisticated and exchanges increasingly decide to close their trading floors. Book-entry securities are settled by the DTCC.
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book-entry security

A security for which the purchaser receives a receipt rather than an engraved certificate. Although a certificate may exist in some instances, it is held in one location as ownership changes. The U.S. government, which issues Treasury bills only in book-entry form, uses this method as a way to reduce paperwork expenses. See also Depository Trust Company.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.

Book-entry security.

Book-entry securities are stocks, bonds, and similar investments whose ownership is recorded electronically rather than in certificate form.

When you sell the security, the records are updated, deleting you as an owner and adding the purchaser. This means you don't have to keep track of paper documents, and they can't be lost or stolen.

The Depository Trust & Clearing Corporation (DTCC) acts as a clearinghouse for book-entry securities.

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