Securities, according to our General Law of Securities, Decree No. 1824, are documents that allow the execution of the literal and autonomous right that are consigned in them. They represent tangible property of a mercantile nature and their creation, issuance, transfer and other operations stipulated therein are always acts of commerce.

Undoubtedly, the isolation caused by COVID-19 has changed the way of doing business around the world. Considering this circumstance, the implementation of technological mechanisms that allow business and transactions to be carried out, which originally used to be done through physical supports and in person, has become popular.

Originally, securities (i.e. checks, promissory notes, checks) arose with the purpose of achieving a more agile and secure circulation and transmission of credit rights and goods; becoming the most popularly used legal instrument and of high affluence in the legal traffic. Due to the advantages they provided, the use of securities spread very rapidly at a global scale, especially in the field of transferable securities, to the point of their massification.

It is important to mention that, due to their mass production and circulation, securities reached a level of diffusion that was not foreseen within their normal functioning, and certain inconveniences began to appear, such as losses or increases in the costs of issuing them.

Therefore, the use of large quantities of securities, originally intended to facilitate the circulation of rights, came to cause the collapse of traffic, becoming an obstacle in terms of costs and logistical organization to achieve the objectives of agility and efficiency that at the time justified their creation. "The advantages of paper led to the disadvantages of paperwork".

Although the rights embodied in paper are easy to transmit; when the number of titles that make up the object of a single transaction exceeds the limits of what is foreseeable, the fact that there is a document for each circulating right ceases to be an advantage and becomes a disadvantage that affects procedural issues and difficulties for the transmission of the rights embodied.

In addition to this, there are other disadvantages that refer to the inconveniences intrinsic to the corporeal materiality of the securities, such as the possibility of destruction, theft or robbery of the security, thus harming the security of the traffic.

Considering the above, the new era of the dematerialization of securities was born, which has become part of the post-pandemic situation of all countries due to the multiple benefits it entails.

The dematerialization of securities includes all those circumstances, both factual and normative, by virtue of which the existence, transmission or exercise of the right originally incorporated in the paper becomes independent of the presentation of the title in which it was documented. In this sense, the excessive circulation of a security is mitigated and is replaced by book entries, i.e., an accounting record which is administered through centralized securities depositories.

Dematerialization only becomes full when no paper is issued, and the ownership of securities is reflected in mere accounting records. For example, the Rule on Registration of Dematerialized Securities, No. CD-SIBOIF-558-1-OCT29-2008, defines "Dematerialized Securities" as those securities that, lacking a physical substrate, are represented by electronic records, also called "electronic book entries".

Said Rule establishes the general guidelines that regulate the incorporation and negotiation of dematerialized securities of public and private issuers in order to not only develop and streamline the local securities market, but also to facilitate its incorporatioh to globalized markets.

The COVID-19 pandemic has presented an opportunity to streamline commerce through the use of dematerialization, responding to the health risks involved in the physical movement of securities, providing greater ease in the circulation of securities and reducing the risks of loss, transfer, deterioration, destruction, theft, robbery and counterfeiting of securities.

Although there are already regulations applicable to dematerialized securities in relation to financial entities, in order to make viable and massify the use of them, it would be advisable to incorporate amendments to the Nicaraguan legal framework, in order to make its application more flexible to the largest possible number of securities (such as purely electronic share certificates, recorded in accounting records without the existence of any physical document), and adapt it to the international guidelines of current trade and market needs, paying special attention to the limitations imposed by the COVID-19 pandemic.

This is why dematerialization is a necessary and unquestionably favorable transition at the time of issuing and trading securities in a safe, agile and reliable way. A trend that is being adopted by most issuers, both public and private, in the securities markets worldwide, and encouraging entrepreneurs towards new investment opportunities within the dematerialized securities market.