Book Entry Securities
Book entry securities are financial instruments like stocks, bonds, ETFs, and others whose ownership is recorded electronically, eliminating the need for physical certificates. This system modernizes the process of tracking ownership and trading, making it more efficient and secure. Book building is the process of determining the issue price of a financial instrument based on investor demand, usually during an IPO. Instead of setting a fixed price, the process gathers bids from investors to establish an optimal issue price. Historically, physical ownership certificates were issued, and selling shares required presenting the certificate for transfer. However, book entries have replaced physical certificates, with ownership tracked electronically through depositories like NSDL or CDSL. These depositories then provide buyers with statements confirming their ownership.
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