Stock & Bond Certificate Condition Definitions

Determining the overall condition of a stock or bond certificate has, in the past, been based on non-standard and somewhat subjective criteria often times defined by the individual or company selling the certificate.   In order to ensure consistency within the industry, the Denver Stock Exchange has chosen to adopt the PASS-CO standard definitions of grading & condition when we are assessing the overall condition of a stock or bond we sell.  While there is still a certain degree of subjectivity in determining the condition of an item, using these standardized condition definitions will eliminate the guesswork and ensure that the condition we assign to an item meets the stated criteria within that condition level as outlined below. 

The following definitions are those used by the Professional Authentication Services & Standards Co., which has no affiliation with the Denver Stock Exchange.  Please visit the PASS-CO web site for additional information about stock & bond certificate condition and grading.

Poor (P) This would be a certificate that is essentially uncollectible except in the case of rarity or historical importance. For pieces that are routinely or occasionally available this would be an unacceptable example. Certificates in this grade would exhibit extreme problems. Writing on the certificate may be extremely faded or illegible due to light exposure or other factors. The certificate may exhibit damp-staining, severe water damage or other extreme staining. One quarter or more of the certificate may be entirely missing. This certificate would primarily be collectible only in cases of extreme rarity.

About Good (AG) While better than a certificate rating Poor, this would be an example which would normally be collectible because of rarity or historical importance. For pieces that are routinely or occasionally available this would likely be an unacceptable example. The certificate may exhibit paper loss, dampstaining, fading, severe folding and tears. The certificate may have large pieces missing, and possibly rust stains from paper clips -- though not to the extreme degree of an example which would grade Poor. May contain large, bold cancellation(s) or transfer block rubber stamps over the face. Vignette may be obliterated by cancellation(s).

Good (G) This certificate will have a number of problems from very moderate to heavy staining, paper loss, tears, edge chinks and other problems. May have significant wrinkling or soiling, as well as numerous folds with damage and/or discoloration. A corner or corners may be missing and/or it may be trimmed into the border design. Writing on the reverse might cover the entire back of the certificate. Vignette might not be clear, with written cancellation(s) superimposed over the top.

Very Good (VG) This certificate may display some minor staining, discoloration or other minor problems. It may display significant wear and folds. May have small marginal edge chinks or tears. Also may have weak folds, and staple holes may be present.. Will have reasonable eye appeal regarding overall condition. Overall a collectible example at the lower end of the desirability scale.

Fine (F) Displaying normal characteristics of some use such as light creasing or folds. May have a couple of small pinholes. May display some minor discoloration or a few minor edge tears at fold ends. May have some light smudging or surface soiling. Staple holes may be present. Light writing on the verso. Vignette should be clear of all obstructions. This grade is representative of an average certificate.

Very Fine (VF) The paper retains some of its original crispness with some light edge wear and perhaps light smudging in upper right corner from counting or handling. May have a slight separation at the margin of a fold or two. Staple holes may be present. Some minimal soiling may be present.

Extremely Fine (EF) A certificate which will display light evidence of usage. May have a couple of folds but the paper remains crisp. This certificate would remain largely free from any tears, staining or forms of discoloration. A few light staple holes may be present though not exhibiting rips and tears. Vignette remains sharp.

About Uncirculated (AU) A fresh, clean certificate with crisp paper. Printing remains bright and clean. Free from soiling, edge tears, staining, discoloration or any other defects. This would be an example that would be held back from a higher certificate uncirculated (CU) grade because of a few staple or pin holes or a very light crease. May have a couple of minor corner folds.

Certificate Uncirculated (CU) A certificate free from any defects. The paper remains crisp as printed. Printing remains bright and clean. No corner folds or creases exist. May have one or two staple or pin holes. As it was often a practice of individuals to contemporaneously pin or staple certificates together this alone would not hold a certificate back from the lower end of the numerical scale for this grade. It should however be noted.

AN IMPORTANT NOTE:
Stocks and bonds were customarily folded for storage and delivery through the mail and otherwise. As a result, certificates are, in the majority of cases, encountered with some degree of folds. This alone should not keep a certificate from being graded as Certificate Uncirculated or About Uncirculated.

A SPECIAL NOTE ON LARGE FORMAT BONDS:
It was a common practice for larger format bonds to be uniformly folded following their printing. As a result, many of these bonds have never been unfolded until just prior to being graded. Many remain in a truly uncirculated state but for these folds. PASS-CO will grade these bonds as Uncirculated and note that the bond has been “Folded at Manufacture.”

Originial State Uncirculated (OS)
This grade is reserved for those certificates which remain as printed, in pristine condition without folds. The paper will remain crisp and the certificate will remain as it left the press. It will remain free from any trimming, handling marks, or other defects. This grade represents the finest condition certificates available. The certificate should be absolutely mint, with no signs of circulation whatsoever. It will remain free of any folds, staple marks, bleaching or processing of any kind. A certificate receiving this grade will exhibit sharp printing and remain free of any edge wear or discoloration.

Split Grade
In the event that the back side of a certificate would grade differently than that of the front, a split grade may be applied to the item.

The Denver Stock Exchange utilizes the condition definitions created and used by PASS-CO, but does not guarantee any certificate's condition would be graded identically if submitted to PASS-CO for grading.  It is the intent of The Denver Stock Exchange to utilize the condition and grading definitions as a common standard and no guarantee of condition is expressed or implied.