6

H.—2sb

CONTENTS— continued. PAGE Part IV.— lnvestment Companies .. .. • • • ■ • • • • .45 1. Definition and Characteristics of Investment Trusts .. 45 (a) General .. (6) Definition .. .. •• •• •• ..46 (c) Types of Investment Trust .. .. • • .. 47 (d) Characteristics of the British Type .. . . .. 47 i. Capital Structure .. . . . • • • .. 47 ii. Security .. . . . • • • • • " ati iii. Trustees . . . . . • • • • • .. 47 iv. Investment Policy .. . • • • .. 48 (i) Object .. .. •• •• ..48 (ii) Diversification .. .. • • .. 48 (iii) Underwriting .. . • • • . . 48 (iv) Investment Motives .. . • .. 49 v. Dividend and Reserve Policy .. .. . . 49 vi. Publicity in regard to Investments .. .. •• 50 (e) Economic Advantages of British Type .. .. •• 50 2. Types of Investment Trust in New Zealand .. .. •• 50 (1) Share Companies .. .. • • • • .. 51 (2) Share and Debenture Companies .. .. .. . . 51 (3) Contractual Companies .. .. • • • • .. 52 3. Findings .. .. ■ • • • • • • • .. 52 (1) Extent of Operations . . .. . • • • .. 52 (2) Inadequacy of Official Statistics .. .. • • .. 53 (3) Promotion .. .. .. • • • • .. 53 (a) Initial Capital .. .. • • • • .. 53 (b) Private Companies .. . • • • .. 54 (c) Investment Trusts incorporated under other Acts .. 55 (d) Signatories to Memoranda of Association .. .. 55 (e) Inflation of Capital .. .. ■ • .. 56 (/) Transactions by Interested Directors • .. 57 (g) Prospectuses and other Publications .. .. 57 (h) Misrepresentation by Salesmen . . .. 58 (i) Attitude of Stock Exchange .. .. 59 (j) Remedies under (g) and (h) .. .. 59 (4) Financial Scheme .. .. • • • • .. 60 (a) Capital Composition .. .. .. .. 60 (6) Security behind Debentures . . .. 60 (c) Investment Policy .. .. • • .. 62 (i) Diversification .. .. • • • • 62 (ii) Publicity .. .. .. • ■ .. 64 (iii) Reserve and Dividend Policy .. .. 65 (iv) Non-investment Motives : Speculation and the Device of Subsidiary, Affiliated, or Interlocking Companies .. . • • • .. 65 Definition of" Subsidiary Company" .. .. 70 (5) Scheme of Control and Administration .. .. .. 70 (a) Shareholding of Debenture-holders .. .. 71 (6) Trustees .. .. .. • • • • .. . 71 (c) Meetings of Debenture-holders . . .. 71 (d) Representation of Debenture-holders on Directorate .. 71 (e) Inspection and Audit .. . • • • 71 (f) Holding of Securities .. .. •• ..71 Part V.—lnvestment cum Lottery Companies .. .. • • • ■ .. 73 Part Vl.—Employee Shareholding Companies .. .. • • • • .. 74