§ [Nos.39 and 40.]
§ After Clause 20, insert the following new clause:
§ Duty of director to notify company of acquisition etc. of its securities
§ (".—(1) In section 27(3) and (12) and section 31(2) of the Act of 1967 (duty of directors to notify company within fourteen days of acquisition etc. of securities of the company) for the words "fourteen days" wherever they occur there shall be substituted the words "five days".
§ (2) Subsection (1) above does not affect the time for fulfilling any obligation which arose before the coming into operation of this section.")
830§ Insert the following new clause:
§ Duty of company to notify recognised stock exchange of acquisition etc., of its securities by director
§ —(1) Whenever a company in the case of which shares or debentures are listed on a recognised stock exchange is notified of any matter by a director in consequence of the fulfilment of an obligation imposed on him by section 27 or section 31 of the Act of 1967 (duty of directors to notify company of acquisition etc. of securities of the company), and that matter relates to shares or debentures listed on a recognised stock exchange, the company shall be under an obligation to notify that stock exchange of that matter; and the stock exchange may publish, in such manner as it may determine, any information received by it under this subsection.
§ (2) An obligation imposed by subsection (1) above must be fulfilled before the end of the day next following that on which it arises; but for this purpose, a day which is a Saturday or Sunday or a bank holiday in any part of Great Britain shall be disregarded.
§ (3) If default is made in complying with this section, the company and every officer of the company who is in default shall be guilty of an offence and liable, on summary conviction, to a fine not exceeding £500 and further to a default fine.
§ (4) Proceedings in respect of an offence under this section shall not, in England and Wales, be instituted except by, or with the consent of, the Secretary of State or the Director of Public Prosecutions.
§ Lord WINTERBOTTOMMy Lords, with the permission of the House, I beg to move that this House doth agree with the Commons in their Amendments Nos. 39 and 40. The Government had not originally intended to deal with the subject of disclosure of interests in shares in this Bill. It was thought that the subject was too controversial for inclusion in a technical Bill of this nature, and that it, together with insider dealing, would be better considered in the context of the review of the supervision of the securities market generally. However, consultations have shown that there is general agreement on the need to deal with abuses of nominees, including warehousing, and widespread support for the measures proposed in this new clause and the three following new clauses. The Government, therefore, agreed to the Opposition's proposal in the House of Commons that the Bill should be extended so as to include them. Insider dealing presents much greater problems of definition. Although, therefore, the Government have announced their intention to legislate to make insider dealing a criminal offence, it was not possible to do so in this Bill.
831 To turn to this new clause, it will make a useful, if relatively minor, contribution to the control of abuses in securities dealing. The 14-day period for notification of changes in directors' holdings in their companies' shares currently provided under Section 27 of the 1967 Act has been found to be too long in practice. The clause, therefore, reduces the period to five days. This tightening up of the disclosure requirements will increase the deterrent to directors indulging in insider dealing in the company's shares without the knowledge of the company.
§ Moved, That this House doth agree with the Commons in the said Amendments.—(Lord Winterbottom.)