Such a DRS must be operated by a registered clearing agency and must be available for exchange-traded stock. In its filing with the Commission, NYSE included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The NYSE is proposing to rescind this policy in light of changes in the securities marketplace, including the decreasing importance of physical certificates and the technological enhancements in the automation of stock ownership records. With respect to changes in the marketplace, a declining number of shareholders hold stock certificates.
Investors receive account statements evidencing their securities positions.
In addition, a growing number of investors hold securities through direct registration in their own names on the shareholder register but without receiving certificates. Such investors receive account statements from the issuer or its transfer agent. Permitting listed companies, in effect, to offer their registered holders account statements in lieu of certificates is consistent with technological advancements in account management systems. Today, corporate issuers or their transfer agents maintain automated systems for recording stock ownership. The NYSE believes that registered holders should benefit from this automation and have the opportunity to forego certificates.