Can You Borrow Against Paper Share Certificates?
Not while they stay on paper. Black Haven lends only against shares held electronically in the home market’s central securities depository, so to borrow against paper share certificates you must first deposit them into it. In Hong Kong that means CCASS: the certificates go in through a CCASS participant and are normally re-registered in the name of HKSCC Nominees Limited.
Can you borrow against paper share certificates?
Not in paper form. With Black Haven, only shares held electronically in the home market’s central securities depository can be pledged, so paper certificates must be deposited into that depository before they can secure a stock loan. The reason is practical. Pledged shares are held in an account in the borrower’s or pledgor’s name at an independent custodian, which holds them through a sub-custodian in the depository, and a certificate in a drawer or a safe cannot be delivered into that chain. The chain is described in where are your shares held during a stock loan.
Depositing is not selling. In Hong Kong the deposited shares are re-registered in the name of the depository’s nominee, but HKEX states that the arrangement does not affect the underlying beneficial ownership of the shares. The holder still owns them; it simply holds them through a participant in the depository instead of on paper.
How do you deposit paper certificates into CCASS in Hong Kong?
Through a CCASS participant, usually a broker or a custodian bank, which lodges the certificates at the CCASS Depository operated by Hong Kong Securities Clearing Company Limited (HKSCC), a wholly owned subsidiary of HKEX. HKEX describes the service as enabling participants to deposit and withdraw eligible physical share certificates into CCASS for safekeeping and settlement purposes.
The mechanics are in section 7 of the HKSCC Operational Procedures. The participant completes a Stock Deposit Form for each security (section 7.3.1) and checks that the deposit comes with the certificates, instruments of transfer duly executed, endorsed and stamped as appropriate, and any other documents HKSCC requires (section 7.3.2). Once a deposit is accepted, HKSCC normally submits the certificates to the issuer’s share registrar for re-registration in the name of its nominee, HKSCC Nominees Limited (section 7.2.4).
When the shares are credited depends on who deposits them. Subject to vetting and HKSCC’s right to reject a deposit, securities deposited by a participant other than an Investor Participant are normally credited to its stock account immediately, although for risk management HKSCC may hold back credit until registration in the nominee’s name; securities deposited by an Investor Participant are credited only once re-registration is complete and the new certificates have been received from the registrar (section 7.2.3). The depositing participant is responsible to HKSCC for defective securities (section 7.2.2), so expect the broker to check the paperwork closely. The Securities and Futures Commission (SFC) describes the paper-based transfer process as one that can take around 10 business days. Hong Kong market points are covered on the Hong Kong stock loans page.
What does Hong Kong’s uncertificated securities market change?
Less than many holders expect, at least for depositing. As at 27 October 2026, the uncertificated securities market (USM) is due to be implemented on 16 November 2026: that is the date in question 1.2 of the SFC’s USM frequently asked questions, and the date appointed by the commencement notice for the Securities and Futures and Companies Legislation (Amendment) Ordinance 2021, which the Government gazetted on 30 April 2026. The regime is designed to eliminate the need for paper documents in evidencing and transferring legal ownership of prescribed securities, and it initially applies only to securities constituted under the laws of Hong Kong, Bermuda, the Cayman Islands or the Chinese Mainland (question 2.1).
Existing certificates stay valid. The SFC’s FAQ (question 3.6) says there is no obligation to dematerialise existing holdings and that existing certificates will not be invalidated, and HKSCC’s circular PT/DPS/CCASS/007/2026 of 1 September 2026 tells participants that dematerialisation is optional, has no time limit, and that there is no need to rush to deposit existing physical certificates before or after implementation. Securities become participating securities in phases over five years, with advance notice of each stock’s participation date (HKSCC circular PT/DPS/CCASS/005/2026 of 24 July 2026).
Two changes matter to a holder planning a deposit. The first is cost. From implementation, the transfer and registration fee a registrar charges when shares are deposited into CCASS should not exceed 0.02 per cent of their value, with a minimum of HK$20 per request, and where the securities have already become participating securities but are still on paper a dematerialisation fee is also payable (SFC FAQ, questions 3.5A, 3.5B and 4.2). On a large holding the percentage fee is worth budgeting for. The second is a new way to hold: in the holder’s own name without certificates, managed through the platform of an approved securities registrar. The SFC notes that investors holding in their own names will need to deposit the securities into CCASS if they wish to use them to settle trades, and on Black Haven’s rule an own-name uncertificated holding, which is not held in CCASS, would likewise need to be moved into CCASS before it could be pledged. What USM means for shares already pledged by delivering certificates to a lender is a separate question for Hong Kong counsel.
How do other markets treat paper certificates?
Several markets have gone further than Hong Kong, so the question there is usually how old paper was converted rather than how to deposit it. Three examples show the range.
In Indonesia, provision II.5 of IDX Rule I-A on the listing of shares, as most recently amended by decision Kep-00152/BEI/10-2026 with effect from 9 October 2026, states that the shares that can be traded on the Exchange are shares in scripless form (tanpa warkat). Indonesia’s central depository is PT Kustodian Sentral Efek Indonesia (KSEI). An old certificated holding therefore has to be converted before it can be traded, or used as collateral with Black Haven; the Indonesia stock loans page covers the market’s other points.
In Japan, the share certificates of listed companies no longer exist. JASDEC’s Annual Report 2009 records that when its Book-entry Transfer System for Stocks, etc. started on 5 January 2009, paper stock certificates issued by all Japanese companies listed on Japanese stock exchanges were abolished and became invalid, replaced by electronic records in accounts at JASDEC or at account management institutions such as securities companies and banks.
India, as a general example, reached a similar result through its transfer rules. Under regulation 40(1)(a) of the SEBI (Listing Obligations and Disclosure Requirements) Regulations, 2015, requests for effecting transfer of securities shall not be processed unless the securities are held in dematerialised form with a depository, subject to a proviso for transfers executed before 1 April 2019. Black Haven does not take shares listed on BSE or NSE as stock-loan collateral, although an Indian issuer with a line listed outside India, such as an ADR, a GDR or a dual or secondary listing, can be considered against that line.
What should you check before depositing certificates?
As general information, four points tend to decide how smoothly a deposit goes.
The name on the certificate. The registered holder is the person or company that signs the transfer. If a certificate is in the name of someone who has died, a company that has since merged or a former nominee, the register usually has to be put right first, which is a matter for the issuer’s registrar and your advisers. In Hong Kong, an Investor Participant may deposit only certificates registered in its own name or in the name of the nominee (HKSCC Operational Procedures, section 7.2.5).
Authority to sign. A company depositing as a Corporate Investor Participant must also provide a certified copy of a board resolution authorising re-registration in the nominee’s name (section 7.3.2), and a broker will usually want evidence of who may sign for any corporate holder.
Lost or damaged certificates. A replacement goes through the registrar and takes time. In Hong Kong, the SFC’s FAQ (question 3.6) says that once securities have become participating securities, a holder of a lost or damaged certificate will not be issued a replacement and will instead need to convert the securities into uncertificated form.
Cost and tax. Instruments of transfer have to be stamped as appropriate, and registrar fees on deposits into CCASS change from 16 November 2026, as described above. Whether stamp duty or any other tax arises on a particular transfer is a question for your own advisers.
How does depositing fit the stock loan timeline?
Start early. Indicative terms need three things: the borrowing entity, the issuer and number of shares to be pledged, and a recent depository or brokerage statement showing the holding, such as a CCASS statement. A holder whose shares are still on paper may want the deposit under way before asking for terms, so that the statement exists and the shares are ready to move; what to send is covered in what to send for indicative terms.
The deposit has to be complete before delivery. In Black Haven’s closing sequence the term sheet is countersigned, KYC follows, the loan agreement is signed, the custody account is opened and the funding notice is given; the shares are then delivered into the custody account and the loan is funded, and the lender’s control over the account takes effect only at the same time as the loan is paid out. A deposit still waiting on re-registration at that point would hold up funding, so paper is best dealt with first.
This guide is general information, not legal or tax advice. The position described for Hong Kong, Indonesia, Japan and India is as at 27 October 2026, and registrars’ practices and fees, and the USM timetable, should be confirmed at the time of any deposit.
Frequently asked.
01Can you pledge paper share certificates for a stock loan?
02How do you deposit share certificates into CCASS?
03Do Hong Kong share certificates have to be dematerialised under USM?
04How long does it take to deposit paper certificates into CCASS?
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