This is much the same as Section 89 of the 1908 Act. There is some change. The old Act did not contain any reference to a statutory limit of 10 per cent. which is provided for in paragraph (b) of subsection (1) of the section now before the Committee. The payment of unreasonably large underwriting commission is, in effect, equivalent to the issue of shares at a discount which was always prohibited by the Companies Acts. I understand that the restriction proposed will not cause any inconvenience in the case of genuine underwriting agreements.
SECTION 59.
Question proposed : " That Section 59 stand part of the Bill ".
Does that mean that 10 per cent. commission is approximately the average rate now paid or the maximum rate now paid? Is 10 per cent. about the average at the present market value or is it the present procedure ?
It would be less.
It gives room for manoeuvre.
Question put and agreed to.
May I suggest to the Committee that they might consider adjourning at this stage ?
Amendment No. 20 is a pretty complicated amendment and perhaps we might adjourn now because we will have a fair amount of discussion on it.
Perhaps before we adjourn, I might mention one matter so that the Minister will be in a position to answer it. Under subsection (2) (b), of the new section proposed in the next amendment, a declaration has to be made. Has the Registrar any power to step in if he thinks the matters shown in the declaration disclose an unsatisfactory position ?
No.
I do not think he has.
It was never the intention that he should have.
It might be worth considering whether he should have power. The Minister might like to consider it.
I shall have a look at it.
The Committee adjourned at 5 p.m. until 8 p.m. on Tuesday, 22nd January, 1963.