§ Mr. Clinton Davis
I beg to move Amendment No. 50, in page 25, line 29, leave out'Subject to the provisions of subsection (9) below'.
§ Mr. Davis
These amendments make two separate changes for the purpose of facilitating the operation of section 33 of the 1967 Act, as amended by this clause. The hon. Member for Worthing (Mr. Higgins) will appreciate that we were contemplating some necessary changes here and I do not think he wilt be surprised by what we are seeking to introduce.
The substantive amendment is No. 53. The first part of it—that is to say, the new subsection 7A—will modify the notification requirement so that only changes which result in a person's shareholding reaching or passing the next percentage point up or down, rather than every change, need be notified after the initial notification at the 5 per cent.—or other percentage which may be prescribed—threshold. The second part—the new subsection 7B—gives jobbers who satisfy certain conditions exemption from the notification requirement and supersedes the exemption for jobbers introduced by the Opposition in Committee. Amendment Nos. 50 and 54 are paving and consequential respectively.
The purpose of the first amendment—limiting the application of the notification requirement to significant changes—is to ensure that the modification which Clause 23 makes to Section 33 of the 1967 Act is not counter-productive. With a reduction in the threshold from 10 per cent. to 5 per cent., the number of notifications 1377 will be greatly increased, and amongst those most likely to hold more than 5 per cent. of the equity—or 5 per cent. of any class of voting shares—of a listed company will he the institutional investors, the size of whose holdings will be constantly changing—though normally only by very small amounts in percentage terms. A company might therefore receive so many notices that it would have difficulty in recognising the significant acquisitions which the provision is intended to spotlight.
The other amendment—the exemption for jobbers—is desirable because it would be impossible for the jobber to fulfil his role if it were to be publicly known that he held a certain number of a company's shares. In consideration of this exemption, the Government have an undertaking from the Stock Exchange that it will monitor substantial holdings by jobbers and report to the Department on them.
§ Mr. Higgins
I think these were both points that I raised in Committee. I suggested that some improvement to the original clauses which I drafted might be necessary, although I was not at all sure that I had the technical sophistication to achieve what is a fairly complex objective.
I welcome the provisions with regard both to institutional shareholders and to jobbers. It would be appropriate for us to see how the thing works out in practice. We are in fairly unchartered territory in some respects and it is best to accept the amendments which the Government have put forward and see how the matter develops. I certainly think that the general approach that we have adopted is the right one, and I am grateful to the Government for suggesting improvements.
§ Amendment agreed to.
§ Amendments made: No. 51, in page 25, line 35, leave out 'three' and insert 'five'.
§ No. 52, in page 26, line 18, leave out 'three' and insert 'five'.
§ No. 53, in page 26, line 40, at end insert—
§ '(7A) A person who would, apart from this subsection, be under an obligation, by virtue of subsection (1)(b) of the said section 33, to 1378 notify a company of the occurrence of an event shall not be under that obligation if—
- (a) the nominal value of shares comprised in relevant share capital of the company in which he was interested immediately before the event, and
- (b) the nominal value of shares so comprised in which he is interested immediately after the event,
(7B) In subsection (4) of the said section 33, after paragraph (a) there shall be inserted the following paragraph-—
(aa) an interest as holder of shares of a member of The Stock Exchange who—
§ No. 54, in page 27, leave out lines 4 to 8.—[Mr. Harper.]