§ 5.5 p.m.
§ Viscount Goschen rose to move, That the draft regulations laid before the House on 11th October be approved [39th Report from the Joint Committee].
§ The noble Viscount said: My Lords, these regulations, if Parliament approves them, will be made under Section 210A of the Companies Act 1985. They will amend Part VI of the 1985 Act, which contains the law on the disclosure of interests in the shares of public companies.
§ Your Lordships may recall that the House approved some rather more comprehensive Disclosure of Interests in Shares (Amendment) Regulations in June. They came into force on 18th September. The regulations we are now considering are much shorter. They comprise only two small, but important, amendments. These need to be made to complete what was intended under the earlier regulations. I shall explain briefly the purpose of the new amendments.
§ Interests in the shares of public companies, which are held as security by banks, insurance companies and stockbrokers in the normal course of their business, have long been disregarded for the purposes of disclosure. Disclosure of these interests would be burdensome to those who hold them; and it would be of little or no interest to the companies concerned.
§ In the process of updating that existing exemption for interests in shares held as security, it came to our attention that other categories of business routinely take security interests in shares of public companies. We concluded that those security interests had an equally good case for exemption. Therefore the earlier regulations extended the security interests exemption, for example, to investment exchanges and clearing houses, and to banks and insurance companies established in other EC member states. Our intention was also that interests in shares of public companies, held as security in the normal course of business, by stock exchanges and by authorised persons who deal in securities or derivatives on an investment exchange should also be covered in the same way by the expanded security interests exemption. However, as a result of an oversight, for which I must apologise to your Lordships, those last two categories were not included in the earlier regulations. The draft regulations now before the House correct those omissions.
963§ The relevant provisions may be found in Regulation 3, which will amend Section 209 of the Companies Act 1985. Regulation 4 makes transitional provisions. I commend the regulations to the House.
§ Moved, That the draft regulations laid before the House on 11th October be approved [39th Report from the Joint Committee].—(Viscount Goschen.)
§ On Question, Motion agreed to.