Immobilisation and dematerialisation are the two broad goals of electronic settlement. Both were identified by the influential report by the Group of Thirty in 1989.
[edit] Immobilisation
Immobilisation entails the use of securities in paper form and the use of depositaries, which are electronically linked to a settlement system. Securities (either constituted by paper instruments or represented by paper certificates) are immobilised in the sense that they are held by the depositary at all times. In the historic transition from paper-based to electronic practice, immoblisation often serves as a transitional phase prior to dematerialisation.
The Depository Trust Company in New York is the largest immobilizer of securities in the world. Euroclear and Clearstream Banking, Luxembourg are two important examples of international immobilisation systems. Both originally settled eurobonds, but now a wide range of international securities are settled through them including many types of sovereign debt and equity securities.
[edit] Dematerialisation
Dematerialisation involves dispensing of paper instruments and certificates altogether. Dematerialised securities exist only in the form of electronic records. The legal impact of dematerialisation differs in relation to bearer and registered securities respectively.
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