This Bill simplifies the procedure for transferring ownership of fully paid-up registered securities in line with the simplification recently introduced in Britain and Northern Ireland. The Dublin Stock Exchange has asked for this legislation to enable uniformity of transfer procedure to be restored throughout Ireland and Britain. At present Irish stockbrokers operate two transfer procedures—the existing procedure for Irish securities and the new simplified procedure for British securities. The reform is desirable in itself and the extension of the simplified procedure to Irish securities will 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 has often been cited as a factor which discourages prospective investors. The 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) 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. It will not apply, however, to securities carrying a contingent liability, namely, partly paid up shares or securities of a company limited by guarantee or an unlimited company. In the case of the transfer of these shares the present form will continue to be used and the witnessed signatures of both transferor and transferee will continue to be required. This will ensure that shares involving liabilities cannot be transferred to a person without his written consent.
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. The Bill thus amends in respect of fully paid-up shares the share transfer procedure contained in the Companies Bill, 1963. 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 deference to views expressed in the course of the debate in the Dáil on the Stock Transfer Bill consideration is being given to a suggestion to incorporate in the Companies Bill by way of amendment whatever material of the Stock Transfer Bill is relevant to it.
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 purpose of the Bill, will be required to be laid before the Houses of the Oireachtas.
At the request of the Dublin Stock Exchange, it is proposed to recognise all the Stock Exchanges recognised in Britain in the corresponding British Order. The Bill was welcomed in the Dáil for the simplified procedures it introduced. I am sure that it will also recommend itself to this House.
