Bid To Counter Scrip Backlog

Press, Volume CIX, Issue 32273, 16 April 1970, Page 23

Bid To Counter Scrip Backlog

The Melbourne Stock Exchange will set up a central scrip pool to help to cut down the backlog of paper work for brokers, the “Age” newspaper said this week.

The new system, considered to be a major expansion of stock exchange activities, is expected to be in operation within a month. A division will be set up under a share registrar tc hold, as nominee, a bank of share scrip to facilitate faster transfer and settlement between brokers. This procedure is similar to the bearer depository receipt system recently intro duced by the London Stock Exchange. The move, agreed to in principle by ■ the stock exchange committee some time ago, is a result of the mining boom and the huge volume of share turnover on the stock exchange. Criticism of long delays in the registration of shares, and complaints from brokers about their backing of paperwork, are believed to have led to the decision. The central nominee operation will deal mostly with heavily traded stocks. Legal technicalities hindered the immediate introduction of the system, but these have been overcome. The exchange will not act as a company share registry. Any suggestion that the stock exchange was working towards a system of bearer depository receipts (BDRS) was discounted by the chairman of the stock exchange (Sir Cecil. Looker). He said some member firms were not keen on the “bearer” aspect of BDRS. Plans for the new system

had been shown to the delegation from the London Stock Exchange Council while they were in Melbourne for discussions with the Australian Associated Stock Exchanges. Sydney, which handles the largest volume of transactions is expected to follow suit.