Sessional_Paper_1929 — Page 198

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(c) That it would drive money away from the Colony and be detrimental gen-

erally to business interests.

To meet the objections raised I suggest that the stamping of share transfer docu- ments be abolished altogether; that the present transfer stamp duty be no longer placed on the transfer document but in future be paid in respect of and impressed on the sale contract note, and that in lieu of the stamp on the transfer document, the Treasury im- press a certificate to the effect that the requisite stamp duty has been paid and that such certificate be a discharge to the company concerned from further enquiry as to whether the requisite stamp duty has been paid.

Having regard to the fact that the present contract stamp duty came into force by reason of an arrangement made with the Stock Exchange in 1921 it should be abolished altogether.

That in future the ad valorem stamp duty be payable in respect of all sale transactions whether the shares are actually transferred into the name of the seller or not and that whether the sale is for cash or a forward transaction, but that in respect of all other transactions such as transfer for the purposes of mortgages, temporary loans, transfers in respect of Trusteeships, Executorships and donations of shares a nominal stamp duty of $2 only be charged and the same to be certified in like manner by the Treasury on the transfer document.

For the purpose of effectively carrying out my proposal, it will be necessary to legis- late as follows:-

(a) All sale transactions in the Colony in connection with shares whether nego- tiated by a Member of a Stock Exchange or otherwise must be evidenced by a contract in writing which must contain particulars of the shares sold and the price.

(b) The delivery of shares to the buyer in connection with a sale transaction must be accompanied by a transfer document containing the names of the seller and the buyer, particulars of the shares sold and signed by the seller and buyer, such transfer document having thereon a certificate from the Treasury signed by the proper officer to the effect that the requisite stamp duty has been paid.

(c) Non-compliance with the provisions of the Ordinance must be enforced by

substantial penalties, against agents and principals.

In practice the system will be as follows:-On a sale of shares being entered into the broker or the seller as the case may be will make out a contract evidencing the trans- action and the same will be stamped at the Treasury with an ad valorem stamp for the amount the transaction calls for, and the same will in the usual course of business be either delivered to the buyer or a notification thereof sent to the buyer. When the shares are to be delivered to the seller, the broker or the seller will take the contract to the Treasury together with a transfer document and the Treasury will on production of the contract, stamp the transfer document with a certificate which will be signed by the re- quisite Officer in the Treasury to the effect that the requisite ad valorem stamp duty has been paid. This stamped transfer together with the scrip for the shares will be handed to the buyer who will then be at liberty to either retain the scrip and the transfer document as they then stand or transfer the shares into the buyer's name.

The company whose shares they are, on receiving the transfer document with the Treasury certificate will be exonerated from making further enquiries as to whether the requisite stamp duty has been paid.

Should the buyer not desire to register the transfer, then when the shares are again sold a further contract will be made and a further transfer document certified as before, and so on through each transaction until eventually the ultimate buyer desires to regis- ter the shares in his name, when he will send in to the company concerned the share scrip and the intermediate transfer documents.