I move: That the Bill be now read a Second Time.
The main object of the Bill is to simplify the transfer procedure for fully paid up registered securities. Up to the present the law relating to the transfer of securities has been the same here as in Britain, but legislation recently enacted in that country under the title of the Stock Transfer Act, 1963— which came into operation on 28th October, 1963—introduces reforms which will simplify transfer procedure there. The British Act implements the principal recommendations of a committee representative of the London Stock Exchange, the Bank of England and the other leading institutions of the City of London concerned with stocks and shares.
The Dublin Stock Exchange has represented that similar legislation should be introduced here as soon as possible so as to enable uniformity of transfer procedure to be restored throughout Ireland and Britain. Meanwhile, Irish stockbrokers are obliged to operate two transfer procedures— the existing procedure for Irish securities and the new simplified procedure for British securities—which give rise to some confusion. Apart from this consideration the reform is desirable in itself. The extension of the simplified procedure to Irish securities would result in considerable saving of time for stockbrokers, banks and registrars of stocks and shares as well as for the investing public. Indeed, the slowness and complexity of the present transfer system is often cited as a factor which discourages prospective investors. As it is obviously desirable to restore uniformity of stock transfer procedure here and in Britain the present Bill follows the lines of the British Stock Transfer Act, 1963.
The main provisions governing the new stock transfer procedure are set out in section 2 of the Bill and are:
(i) future transfers of securities to which the Bill applies will be under hand and not by deed—a new form of transfer for general use is introduced;
(ii) the person to whom securities are transferred need not in future sign the instrument of transfer;
(iii) the signature of the transferor need not be witnessed;
and
(iv) a transferor whose holding has been sold on a stock exchange will not have to execute more than a single transfer form even where parts of the holding have been sold to different buyers. A new form to be executed by the broker is introduced for such cases.
The Bill applies to fully paid up transferable registered securities except securities of a company limited by guarantee or an unlimited company. The Bill does not apply to partly paid up shares as it would obviously be undesirable that securities with a liability attaching to them could be transferred to a person without his acknowledgment, by his signature on the form of transfer, of the obligation being undertaken.
Section 3 provides that the Bill has effect notwithstanding anything to the contrary in any enactment or instrument, such as articles of association, relating to the transfer of securities. Section 4 provides against the evasion of stamp duty by means of the circulation of transfers in which the name of the transferee has not been inserted. Power is being taken in section 5 of the Bill to permit of the amendment of the new transfer forms by way of regulations. Under section 6 such regulations and also regulations made under section 1 determining the Stock Exchanges to be recognised for the purposes of the Bill, will be required to be laid before the Houses of the Oireachtas.
I have outlined the provisions of the Bill and I am satisfied that it will provide an improvement in the procedure for transferring securities and that it will recommend itself to the House.
There is a further point which I would like to mention. Deputies, in nothing that the procedure set out in this Bill amends the share transfer procedure contained in the Companies Bill, 1963, may wonder why the latter Bill was not suitably amended. Because of the complexity of the Companies Bill and as the Stock Transfer Bill, which covers a wider range of securities than company shares, introduces a new principle it was considered desirable to have the new transfer system discussed separately. For that reason the Companies Bill was not amended. However, in view of the fact that there will be a time lag in bringing into operation the Companies Bill which is in the final stages of being enacted, I propose to introduce an amendment at the Committee Stage of the Stock Transfer Bill to ensure that the new transfer procedure will override the transfer procedure contained in the Companies Bill.
