Los Angeles herald., 1906-06-21
RESTRICTIONS ON LISTING
ARE ADVOCATED
Governing Board Under New Rule, "
Carried, VIII Require Data From
Companies That Seek
Favors

The plan proposed is based on the
rules in force on all the other ex-
changes, both stock and grain, of any
consequence in the country, and an at
tempt will be made by its friends to
force action on it i'm the near future.
Heretofore the governing board of the
exchange has imposed few, If any, re-
strictions on the listing of stocks. There
has been no listing fee and the COM
panies whose stocks are traded in are
not required by the bylaws to furnish
any statements, such as are exacted on
other stock exchanges. Members say
that none of the stocks now on the
trading list are there, as a result of
application to that effect on the part
of the corporations, but all have been
placed there voluntarily by the mem
bers of the various governing Loards.
Systematic Methods
1t is now proposed to follow methods
that will be a little more systematic
and which will furnish a degree Of pro-
lection not cnly to he members of
exchange but to their clients as we'll
The listing committee has under con-
sideration a proposition that all cor
porations which desire that their stocks
shall be traded in on the exchange shall
make formal application for that pur-
pose and shall pay a regular listing fee.
In addition to this, certain informa-
tion regarding the financial condition of
the corporation and the physical condi-
tion of its property shall be filed with
the secretary of the exchange. Further
more, statements of earnings shall be
made at stated intervals.
In the case of a mining company
which wishes to have it's stock listed
I1xz.. L. -.1 a.
blank form, giving the names of the
principal officers and directors, the To-
cation of it's transfer office, the date of
it's annual meeting, capitalization,
amount of cash and stock in the
treasury, whether the stock is assess
able or non -assesSab BILE, list of proper
ties and their condition with respect to
patents, etc., extent of development,
statement of resources and liabilities,
rate of dividends a--d net production to
date.
Obligation on Officials
The officers of the corporation will
also be required to sign the following
agreement:
I'VE hereby agree to furnish {. report
of the condition of the compan- when
required and within ten days after
notification, and also agree to give
capital stock or the Offering of treasury
stock for sale at least fifteen days be-
fore the issuing of or offering of said
stock also of the time of opening and
closing of the transfer books
The point is made that information
of this kind is required by every i'm
portant exchange in the country, and
that the local exchange is fully justified
in demanding it, not only in its own in
terest but for the protection of the
trading public.
Members of the exchange say that
few of the companies whose stocks are
traded in make occasional statements,
but that they are of little value. and
voluntary.
On a Business Basis
The advocates of the change pro-
posed say they want to put the ex-
change on a business basis, and that
this is one of the most important steps
that can be ta'-en in this direction.
Some oppositic-l to the plan has de-
veloped on the part of a certain ele-
rnent of the inemb .rship, which fears
that any attempt to enforce such rule
would result in the withdrawal of a
number of stocks from the trading list,
or rather the necessity of striking them
from the list.
To this the other side makes reply
that any company that refuses to give
such information as is required by all
other reputable exchanges does not de-
serve to be recognized by the exchange,
and that it is better for the exchange
that it should have few stocks for
which it can vouch than a large num-
ber about which it knows little or moth
ing.
Rights of Purchasers
1t is maintained that tie information
which would be required would be
merely such as any purchaser of stock
would consider he was entitled to and
which he doubtless would demand if he
were solicited to take an interest in the
company by any of it's officers.
Advocates of the proposed change in
the rules of he exchange point to an
incident which occurred last Tuesday as
illustrating its need.
Complaint was made by two or three
of the brokers' to the effect that one OF
the mining companies whose stock is
active on the exchange had practically
closed its transfer offices for the next
two weeks. Persons desiring to have
their stock transferred on the books oi
the company were informed, they
said, that the secretary had gone east
and that no facilities in this line would
be afforded until after the Fourth oi
July.
There was a little indigant discussion
of the subject, but that was all.
Disciplinary Steps
Notwithstanding the fact that theil
customers were placed at great incon.
venience, the members did not care tC
take any disciplinary steps against the
company and apparently the subject
has been dropped.
Advocates of the listing rule admi
that it would be impossible to compe
the company to keep its transfer Office
open, but they take the ground thai
in all such cases the stock of the offend.
ing corporation should be promptly
stricken from the list.
They believe that If one or two case,
were handled in this way there woulC
be large number of companies that
would find Il greatly to their interest tC
comply with all reasonable require
ments as TO listing, transfer facilities
statements, etc.