OVERSEAS SECURTIES

Grey River Argus, 31 July 1940, Page 5

OVERSEAS SECURTIES

N.Z. Restrictions RESERVE BANK ASKS PARTICULARS. WELLINGTON, July 30. The Reserve Bank states that holders of foreign securities, as defined in the Finance Emergency Regulations, 1940 (No. 2), are reminded that particulars of all such holdings must be’ notified to the Reserve Bank, by July 31. As from Monday, August 5, and until further notice, dealings will be allowed in such securities between New Zealand residents as follows:— (1) Securities on New Zealand registers. These securities can be deali in without prior permission, provided they were on the register on J'unc 18, 1940, and that the company concerned agrees io fulfil the following requirements: Firstly, to furnish the Reserve Bank with a list of shareholders on the New Zealand register on that date; secondly, to furnish a similar list annually; ’ thirdly, to decline to register the transfer of shares into the name of a person not ordinarily resident in New Zealand at the time; fourthly, to refuse to transfer any shares to another register without the permission of the Re-, serve Bank, unless required to do so to comply with the law of the country cf domicile of the company. (2) Securities registered overseas. Before these securities can be dealt in, it will be necessary for the selling broker to obtain permission from the Reserve Bank. A special form for this purpose will be supplied to the Stock Exchanges. Permission to deal in both classes of securities is subject to the further condition, that a form recording the transaction is completed 'by both the selling broker and the buying broker, and is returned by the latter to the Reserve Bank, on the completion oi the transaction. These forms are also being supplied to the Stock Exchanges. Sales of securities, otherwise than to New Zealand residents, will require special permission from the Reserve Bank. In such cases, proceeds received overseas must be remitted to New Zealand, through agents nominated by the Reserve Bank for the purpose. Overseas Shares WILL AUSTRALIA RESIST SALES How will Australia react to the New Zealand Government’s compulsory acquisition and sale of Australian shares held in New Zealand ? The question is raised by “The Mercantile Gazette.” 11 is admitted (hat this action is being pursued by tho| British Government in respect ol i American securities, but it is out that “the cases are not analogous. The United talcs is a foreign though friendly country. 1 he United States is not at war, and its currency is different from that ol Britain. Moreover, the New York Stock Exchange is active with prices tending upwards owing partly to the huge expenditure of the American Government, supplemented by that ol the United Kingdom. Britain’s purchases involve exchange operations, and because Britain has so much to pay in America, the dollar exchange is against her. Taking over the American shares of British holders and selling them in New York saves the British Government a great deal

in exchange, and that is a consideration in this war period.” 'The journal quoted shows that the New Zealand-Australian case is different. “Australia, like ourselves, is al war, and wants all the money that it can obtain from its nationals. Then again the Austtjalifin !companies have developed and expanded, which has been due to no small extent to the capital furnished by New Zealand. Investors here by buying Australian shares released a considerable amount of Australian capital which became available for other purposes. The effect of the New Zealand Government’s proposal would be to tie up in Australian shares Australian capital that is now availao e to the Australian Government for war purposes, and would to some extent prevent the further development of the company system. The Australian Government cannot be expected to tolerate such a state of affairs, and it is within the bounds of probability that the Australian authorities may impose some restriction. That would prevent New Zealandheld Australian shares being dumped on the market.”