Legal Definitions - uncertificated security

An uncertificated security is a type of collateral or investment that does not have a physical certificate to prove ownership. It can be a stock, bond, or other type of financial instrument that represents ownership or creditor rights in a company or government. The value of an uncertificated security depends on the financial condition or future prospects of the entity that issued it, and its market price is determined by how much other people are willing to pay for it based on their evaluation of those prospects.