Is there any other Stock Exchange at present registered under the third definition?
Stock Transfer Bill, 1963—Committee and Final Stages.
There is no other Irish Stock Exchange registered but it will probably be necessary to add stock exchanges to the list where further transactions will take place. I do not know whether it will be necessary, for instance, to register the London Stock Exchange if a transfer is taking place from here. It probably will be necessary here.
I raise the point because of the double taxation arrangements. However, as it is at present, I think a form of transfer executed in this country could be stamped here even though it referred to an English company but would it be in order to operate it here unless any stock exchange, wheresoever situate, was named? Is it not the execution of the transfer rather than the place at which the dealing is made which would bind the form of transfer? We obviously want to get as many transfers as possible stamped in this country.
I think the Deputy is right that the point is where the exchange is executed. Therefore, I think it will be necessary to add many Stock Exchanges to the list.
I think I am right in saying that subsection (4) of section 2 has a different form of wording from the wording used in the Act across the water. There they decided to list the various securities involved. Here it is done by a general method.
I am not quite clear about the part of this section which says "Registered securities of any description". Is it permissible for a person to register, apart from inscribing, National Loan? Is it a registered security when National Loan is transferable by deed rather than by normal letter of attorney? The Minister will note that he has expressly excluded guarantee companies and I would like to know does the word "securities" cover Government loan and local loans or is it merely restricted to securities of one sort or another issued by a company? If it covers Government loan there is another point which I shall deal with later.
The Deputy is right in saying that this section is wider in its application than the corresponding clause in the British Act. This section provides for a general list, not a specified list as they have done it. It applies to any registered stock or security and would cover National Loan and local issues.
Is there something in the appropriate Acts setting up National Loans expressly to exclude inscribed stocks from the definition of registered stocks?
They are inscribed in the register.
That is what I thought and if they are registered, the effect of this Bill is that they cannot be transferred by letter of attorney as they are at present. I admit that I deliberately put my questions in that manner because I wanted to be quite clear on the whole thing. If inscribed stocks are also registered stocks, the existing practice of transferring inscribed stocks by letter of attorney will not be operative. If registered stocks also cover inscribed stocks, an exception will have to be put in.
This is permissive. It probably would not apply to inscribed stocks.
It only overrides in the form that may be used.
This would not be suitable in the form of a letter of attorney.
Then it would not override.
The Minister by creating this difference has got himself into a little trouble.
It is permissive. It need not apply.
I move amendment No. 1:
In subsection (1), page 3, line 11, to insert "(including the Companies Act, 1963)" after "enactment".
We had some little discussion on this matter yesterday but we find it necessary to take action in the form of this amendment because of the trouble that arose through these two Bill going through the House at the same time. If the Companies Bill had become law before this Bill then this amendment would not have been necessary because the appropriate section says that it will apply notwithstanding anything to the contrary in any enactment or instrument. The Companies Bill is not an enactment at the moment and there might be some doubt as to whether this would apply retrospectively. For this reason it was considered by my legal advisers that this amendment was necessary. If the Companies Bill had become an Act, then this Bill would apply without amendment. It would mean that the provision in the Companies Bill would be overridden but this amendment should go some way to cover the objections raised by Deputy Sweetman yesterday.
I am afraid it will not go any way at all. The enactment of this measure, which is desirable as such, and the enactment yesterday of the Companies Bill was indicative of very bad administrative machinery. The Companies Bill was supposed to be a consolidated measure which was supposed to be the Bible of Company law from the date of its passing and the ink was not even dry on it when it has had to be amended in a very slipshod fashion.
The real difficulty in dealing with the matter now is that any amendment we may introduce in this Bill is not the amendment that is required. What was required was that there should have been an amendment in the Companies Bill because it was in that Bill that we wanted to enshrine the law in relation to stock transfers. The Minister will find that in the Companies Bill, in page 94, it states that the instrument of transfer is to be signed by the transferee as well as the transferor. This Bill amends that as it provides that the instrument of transfer need not be accepted by the transferee. This is doing things in an extremely slipshod way and in a manner which is quite unnecessary. With the exception of subsection (4) of section 2 this Bill is an exact copy of the Bill that was enacted on 28th October last on the other side.
It is being done now because the Companies Bill finished in this House yesterday and was in the Seanad before this Bill was circulated. It is a great pity that because the means of communication between the Minister for Industry and Commerce and the Minister for Finance broke down, this slipshod method was adopted and what was intended to be a first-class consolidation measure is not a consolidation measure any more.
One of the faults attributed to me is not that of not speaking sufficiently loudly, but I notice in at least two newspapers this morning, I am quoted as having said that it is desirable to have different systems working side by side here and on the other side of the water. What I said, of course, was that it is not desirable.
That makes a big difference.
It does. Three little letters make quite a substantial difference. But it could happen to anybody.
No great tribute to the noise box.
The noise box is just a noise. It is not a method of loudspeaking. The only person I can ever hear out of the noise box is the Ceann Comhairle. The Minister is not noted certainly for speaking as loudly as I do, except when he is making a political reply to a debate, but the Minister is far less intelligible from the noise box than he is in his normal voice. While we are up for Christmas, I hope someone will ensure that this yoke, as I have described it before, will operate more kindly to the Minister and to certain other people.
It is just within the bounds of possibility that this method of stock transfers, having started only very recently elsewhere, may require some amendment in the future. If it is to be amended in the future, I would urge the Minister to introduce any such amendment not by means of a separate Stock Transfer Bill per se, which is being taken over by him, because of the obvious revenue needs in relation to it, but rather that it should be done by a proper amendment of the Companies Bill. In that way, the consolation that was effected in relation to company legislation would be kept moving on.
I shall certainly consider that, though I am not so sure that company legislation covers everything. There are stocks—the Deputy has the advantage of me here because he is a legal man—that do not come from a company.
Definitely. I would rather see it done by two Bills then, one stock company Bill and one transfer Bill, so that companies legislation would be a code in itself.
With regard to the Deputy's parenthetical remarks, I think this thing should be overhauled all right.
The Minister calls it "a thing". He will not come to my word "yoke".
Would the Minister tell us a little more clearly why this is necessary as a revenue safeguard?
It is fairly obvious, I think, that if a form is sent to a person with a transfer order signature on it and the transferee holds it, and subsequently decides to make a further sale before filling in the transfer, then the new transferee may be put in and the Revenue are deprived, of course, of at least one stamp duty on the transfer. They get only one instead of two. It is designed entirely to safeguard the Revenue.
I appreciate that, but a difficulty does arise. The Minister may or may not be aware—his advisers will be because it is entirely a technical matter—that one of the methods adopted for cheap security is that a person borrows something on the security of shares; it is only going to be a very temporary borrowing and the person concerned does not, therefore, want the shares registered in the name of the nominee. The share certificate is delivered, plus a blank transfer duly executed by the stockholder. I am afraid this will be illegal now and, if it will be illegal, I should like to know where the safeguard is because I think the Minister will agree with me it would be undesirable to abolish that cheap form of security. It is a regular system adopted. The share certificate is handed over. The transfer is handed over. The transfer itself is not dated. If the loan is paid off in a matter of months, then the blank transfer is just torn up and the share certificate handed back.
It may be that there is a difference between the phraseology where a transfer in blank has been delivered and a blank transfer. I do not know. Section 2 says transfer in blank means a transfer on which the name of the transferee has not been inserted. The name is never inserted in these cases and it is quite undesirable, I think the Minister will agree readily, that the form of equitable mortgage of share-holding should be destroyed and that the cheap method available at present should not be left.
I appreciate the point raised by the Deputy but, first of all, it starts off by referring to a delivery pursuant to a sale of these securities. That is in the second line.
That probably may save it—pursuant to the sale.
As well as that, if the bank holds the blank transfer, and does not make any attempt to issue it, there is, I think, no offence.
Will the Minister examine it again as between now and the Seanad discussion of the Bill?
Another way of dealing with it might be to use the existing forms. This prohibition may apply only to this particular type of form and if we can go on using the old forms for the blank transfer, that may get over any difficulty.
The old form may be used.
The Minister will agree it is desirable to keep that method of security.
I certainly do.
Would the Minister please confirm that the First Schedule corresponds exactly with the Schedule in the British Act?
And the Second Schedule likewise?
On the Final Stage, in connection with the point raised by Deputy Sweetman that this Bill operates in effect to amend the Consolidation Bill sponsored by the Minister for Industry and Commerce, namely, the Companies Act, I attach great importance to Deputy Sweetman's point. The House will remember I was responsible for the first Consolidation Act introduced here under the special consolidation machinery we evolved for that purpose. I refer to the Fisheries Consolidation Act. The Minister will agree, I think, that where we seek to consolidate a branch of law in one consolidating Act, rightly seeking in doing so to create the impression generally that all the law relating to, say, companies is to be found in one instrument of this House, it would be a pity if, having passed a Consolidation Act, it subsequently transpired that, in fact, important details were subsequently enacted in another Bill.
The Companies Bill runs to 282 pages. Under our procedure we must now get that Bill translated and, having done so, it must be published in the white form as an Act of the Oireachtas. I wonder is there any procedure we could devise to ensure that, before the whole laborious procedure of translating and printing the Bill in its white form is gone through, we could not incorporate in it by way of amendment whatever material of the Stock Transfer Bill is relevant to it and rapidly put the whole thing through the consolidation procedure; and, before taking all the trouble of translating and printing it in permanent form, present a new consolidated Companies Bill which would include the amendments envisaged in the Stock Transfer Bill? The Minister will recall there is a special procedure about it. You do not go through the whole process of re-enacting the new Bill section by section. It goes before a special committee with a certificate from the Attorney General that this Bill does not operate to change the existing law; it sails through a joint committee of Dáil and Seanad and emerges as a consolidated Bill. Perhaps the Minister would consider that suggestion with a view to avoiding duplication, delay and expense. It may not be practicable; but if it is, it might be worth considering before we proceed to translate and publish the Companies Bill in its final text as an Act of the Oireachtas.
I shall bring that matter before the Minister for Industry and Commerce to see what he might think about it. I am sure he would very much like to maintain his consolidated Bill and that, a priori, he would be anxious to do something like that.
Would the Minister mind dropping me a note when he has examined the blank transfer procedure?
I shall do that.