By Lynn Cowan

   Of DOW JONES NEWSWIRES

  WASHINGTON (Dow Jones)--Wall Street's main trade group is campaigning to do away with paper stock certificates and instead keep track of all investor holdings electronically.

  The Securities Industry Association is launching a publicity blitz this year to convince publicly traded companies and their shareholders that a paperless world will save money and time. Its effort is aided by a New York Stock Exchange rule adopted this summer that allows listed companies to eschew paper certificates.  

  So far, only one company, AT&T Corp. (T), has dropped paper certificates.

  At stake is an estimated $500 million in annual savings for all market participants, from investors to brokerage firms, according to the SIA. The extra costs associated with paper stock certificates range from the manpower and time brokerages and companies spend printing, handling and mailing the certificates to the extra expense incurred by investors to replace those that are lost or stolen.  

   The Securities Industry Association will evaluate changing its current three-day trade settlement system to next-day settlement in 2004. It has not set a definite date to implement a new settlement system.  

  Several European countries, including Denmark and France, mandate electronic-only ownership of stocks.

  "We hope shareholders will get used to this idea, and other shareholders will follow," said Donald Kittell, executive vice president of the SIA. "We're up against many shareholders who love certificates."  

  Regulators and the SEC in particular are reluctant to mandate electronic book entry, given the opposition it would face from individual investors, according to Kittell. So the trade group is developing brochures and talking points to rally support among companies and investors. It hopes to convince companies going public to start trading with electronic book entry only, and to sway existing companies into yanking paper stock certificates during new issues or other changes, such as AT&T's 1-for-5 reverse stock split in November.

  Some companies aren't likely to follow through no matter what Wall Street says. Walt Disney Co. (DIS), a company whose stock certificates are popular gifts, said although it's aware of the advantages of a paperless world, getting rid of certificates would upset too many shareholders.

  "We don't want to disenfranchise anyone," said Jim Alden, director ofshareholder services for Disney. "I think it's going to be difficult to move totally out of that environment."

  As for scripophilists - collectors of stock certificates - the end of paper certificates would probably increase the market value of those in circulation today by capping the supply, said Bob Kerstein, chief executive of Scripophily.com, a Chantilly, Va., company devoted to buying and selling certificates. But if many companies go electronic, collectors would miss out on the chance to buy new certificates that could later prove interesting or valuable.

  "Certificates do so much in capturing the history of the company," said Kerstein, who was in the process of raising prices for AT&T certificates Monday.

  -Lynn Cowan, Dow Jones Newswires; 202-628-9783; lynn.cowan@dowjones.com