TRUSTEES AND COMPANY SHARES

Press, Volume LXXXIV, Issue 25610, 27 September 1948, Page 8

TRUSTEES AND COMPANY SHARES

PROVISIONS OF AUSTRALIAN LEGISLATION Recently reported proposals tn Great Britain to amend the British Trustee Act to include some of the strongest ordinary shares as trustees investments, have created considerable interest in Australia. Lately there has been a tendency by formerly conservative investing institutions in Australia, such as life assurance companies, to participate in stock exchange dealings, and holdings in companies engaged in secondary industry have been secured with funds that normally would be invested in Government securities. These funds are not strictly trustee funds, but they indicate a modern tendency to regard soundly supported issues of ordinary shares as representing adequate protection and return. Of general interest to investors are the present normal provisions for the replacement of trust funds for Investment in Australia. Each state has legislation of its own on the matter, but the general broad principles are set out in the Trustee Act of the State of Victoria. Investments can be made in any of the Parliamentary stocks or public funds or Government securities of the state, and by an amendment, in 1933, in similar funds of the Australian Federal Government. Real securities in the state, including the security of a first mortgage of freehold land, registered under the Transfer of Land Act (but not second mortgages), debentures issued by any city, town, borough, or share in the state; debentures issued by the Melbourne and Geelong Harbour TYust Commissioners; the State Savings Bank of Victoria; several public water works trusts, and the Melbourne and Metropolitan Tramways Board, are among permissible securities. Debentures of the Metropolitan Gas Company, which is the main undertaking of this class for the city of Melbourne, are also included. The state gives trustees power to invest in any of the specified securities, notwithstanding that they may be redeemable, and that the price exceeds the redemption ' value. Australian trustees have also wide discretion in regard to conditional or preferential rights to subscribe to a reorganised company, and are not liable when acting in good faith.