SCRIP. SCRIP CERTIFICATE. (Scrip is a contraction of " subscription.") Ordinary certificates are very commonly referred to as " scrip " ; but scrip or a scrip certificate is really the document or pro visional certificate which is given to a person who has, for example, agreed to take up bonds in connection with a foreign Govern ment loan and has paid the first instalment. Scrip is principally associated with the issue of debentures, or foreign bonds.
A person desirous of obtaining some bonds in a new issue pays to the bank which has the management of the issue a deposit of per cent. upon the amount of the bonds required, and requests that he be allotted that amount of bonds at the price of per cent. He agrees to accept the same or any smaller amount that may be allotted to him, and to pay the further sums due on such allotment according to the terms of the prospectus. If his application is successful he receives a letter of allotment stating the amount of bonds which have been allotted to him. At a certain date the letter of
allotment is exchanged for a scrip certificate, a document which states the amount that has been paid towards the price of the bond and sets forth the dates when the remaining instalments are due and the amount of each. A form of receipt is appended for each instal ment. which is filled up by the bank when ever an instalment is paid. When all the instalments have been paid the holder is entitled to a duly stamped bond in exchange for the scrip certificate. If an instalment is not paid, it renders all previous payments liable to forfeiture. Where interest will be payable before the bonds are ready to be issued, a coupon is appended at the foot of the scrip certificate. The receipts must not be detached from the scrip certificate, and when remitting the instalments the certifi cate must accompany the remittance.