PROSPECTUS SYSTEM

Evening Post, Volume CXXI, Issue 36, 12 February 1936, Page 12

PROSPECTUS SYSTEM

PREFERRED BY EXCHANGE

DISTRIBUTING SECURITIES

(Britlst) Official Wireless.) (Received February 12, 2 p.m.) RUGBY, February 11. Questioned in the House of Commons regarding the system known as Stock Exchange introductions and offers for sale, and asked if he would set up a Departmental Committee to suggest safeguards for the public, the President of the Board of Trade, Mr. Walter Runciman, informed the House that the committee of the Stock Exchange had today posted a notice on this matter. The notice states that the commutes has had under consideration representations which have been made to them that the distribution of securities by means of private placing, as opposed to the issue of a prospectus or offer for sale, reacts unfavourably upon the public. In the opinion of the committee, it. is desirable that all issues, particularly those of ordinary capital, should be made by prospectus or offer for sale, unless from a public standpoint the necessity or advantage of private placing is indicated by the circumstances. The chief objections to private placing which have been urged are lack of publicity for the issue, possibility of facilitating the placing of undesirable issues, and that it deprives the public of a chance of securing interest in good. issues on as favourable terms as if they had been offered for sale by prospectus.