FIXED TRUSTS REFORM

Press, Volume LXXII, Issue 21861, 14 August 1936, Page 11

FIXED TRUSTS REFORM

BRITISH COMMITTEE REPORTS NEW REGULATIONS FOR REGISTRATION DOMINIONS RECOMMENDED FOR INCLUSION | I | (BRITISH OfFICIAL WIRfiLESS.J (Received August 13, 5.5 p.m.) RUGBY, August 12. The report was issued this evening of the committee appointed by the Board of Trade “to enquire into fixed trusts in all their aspects ana to report what action, if ! S considered desirable in the public interest.” The committee takes exception to the term “fixed trust” and among its recommendations is the prohibition of that term in the title of futuie trusts. The committee itself uses the term “unit trusts.” Of 35 recommendations, some call for legislation by Parliament, some for action by Stock Exchanges, and some for internal regulations by promoters and others acting m association. Among the most imp - ant of the committees conclusions are recommendations: ; (1) That every unit trust should, be registered in a manner analag-i ous to company registration and that j a certificate of registration shoul j be necessary before units or sub-j units are offered for sale. , ; (2) That the management ot unitj trusts should be undertaken only ; bodies incorporated in the United, Kingdom. | (3) That the managers of unit; trusts should make a deposit with i the Paymaster-General of a substan- j tial sum. An amount of £ 20,000 1 is suggested in respect of each trust > managed by them, with conditional; exemption for existing trusts. (4) That trust deeds should in-, corporate certain compulsory provi- j sions, including one providing for! the transferability of units and sub-i units, to which the committee at-j taches especial importance, as a; fundamental condition of a free* market. . * 1

(5) That stamp duty should be payable on transfers of units and sub-units.

(6) That the court should have power to wind up unit trusts. (7) That the Board of Trade should have power to appoint an inspector to investigate the conduct of a trust on the application of, say, the holders of one-tenth of the units. Other recommendations relate to publicity, rules of management, account, administration, and so on. The committee recommends also that foreign and Dominion organisations of the unit trust type should be subject to the same regulations., The report is unanimous.