Sri Lanka Consolidated Acts

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Registered Stock And Securities (Amendment) Act (No. 32 of 1995) - Sect 6

Insertion of new section 21A, 21B, 21C, 21D, 21E, and 21F in the principal enactment

6. The following new heading and new section are hereby inserted immediately after section 21 of the principal enactment and shall have effect as sections 21A, 21B, 21C, 21D, 21E and 21F of that enactment:-
21A.
(1) Every treasury bond shall ,when issued, bind the Government to pay the principal sum, for which the bond is issued and the interest thereon, in accordance with the provision s of this Ordinance at the rate and on the dates specified in the order under section 4 or in pursuance of an option to redeem such bond reserved in that order'
(2) Not withstanding, any other provisions of this Ordinance, treasury bonds may be issued either as bond in the from of written certificates or as scripless treasury bonds . In the case of treasury bonds issued in the form of written certificates, the provision of section 21B shall apply to such written certificates. In case of scripless Treasury bonds the provisions of section 21C, 21D, 21E and 21F shall apply, to such scripless treasury bonds
21B.
(1) Every treasury bond issued in the form of a written certificates shall be signed by the Registrar for and on behalf of the Government by endorsement and delivery of the bond.
(2) Notwithstanding anything to the contrary in any written law-
(a) no endorsement of a treasury bond issued in the form of a written certificate shall be valid unless made by the signature of the holder written on the reverse of the bond in one of the spaces provided for that purpose, or in a separate form prescribed by regulation;
(b) a person shall not, by reason only of his having endorsed or endorsed and delivered a treasury bond issued in the form of a written certificate be liable to pay any money due either as principal or as interest thereon.
21C.
(1) Notwithstanding any other provisions of this Ordinance the Minister in charge of the subject of Finance, may by an order published in the Gazette direct the issue of scripless treasury bonds. Such scripless treasury bonds shall be issued and maintained in accordance with the provisions of this section and sections 21D, 21E, and 21F of this Ordinance.
(2) The Central Bank shall have the authority to take any action necessary for the issue and trading of scripless treasury bonds in accordance with the provisions of this Ordinance. Without limiting the generality of the foregoing, the Central Bank shall the authority to undertake and carry out the following:-
(a) the making and maintaining of entries in the records of the Central Bank to record the issue and trading of scripless bonds;
(b) the maintenance of accounts to record the ownership or custodial holdings of scripless treasury bonds or interest therein, for or on behalf of direct participants or the Central Bank;
(c) the appointment from time to time of direct participants referred to in section 21B, and the regulation, supervision or monitoring of such direct participants with respect to their transaction in scripless treasury bonds and the performance of their duties as direct participants;
(d) The appointment from time to time of dealer direct participants referred to in section 21F, and the regulation, supervision or monitoring of such dealer direct participants with respect to their transactions in scripless treasury bonds and the performance of their duties as dealer direct participants;
(e) the appointment from time to time of interdealer brokers, and the regulation, supervisions or monitoring of such interdealer brokers with respect to their brokering of scripless treasury bonds and the performance of their duties as interdealer brokers;
(f) the appointment from time to time of primary dealers, and the regulation., supervision or monitoring of such primary dealers with respect to their transactions in securities and the performance of their duties as primary dealer;
(g) the appointment of designated non-dealer bidders and the regulation, supervision and monitoring of such non-dealer bidders with respect to their transaction in securities and the performance of their duties as non-dealer bidders;
(h) the formulation of a code of conduct for the promotion and development of an orderly market to scripless treasury bonds.
(3) The Central Bank may be the extent not otherwise provided for in sections 21c, 21d, 21e, and 21f issue directions to direct participants or any category thereof, to provide for the followings:-
(a) the manner in which the accounts of customers of dealer direct participants are to be maintained and administered;
(b) the times at which principal and interest payments, and any redemption proceeds are to be credited to such accounts;
(c) the fees that may be charged for maintaining and administering such accounts;
(d) the regulating, supervising or monitoring of direct participants, dealer direct participants, or interdealer brokers;
(e) the manner and means by which scripless treasury bonds, or interests therein, may be purchased, sold transferred, pledge or encumbered.
21D.
(1) The Central Bank may appoint in writing any primary dealer or other person to be direct participants. Each direct participants shall be entitled to maintain with the Central Bank its own scripless treasury bond account, as specified in subsection (2) of this section.
(2) A direct participants shall maintain a single account with the Central Bank for holding scripless treasury bonds, on its own accounts. Such accounts shall be maintained by the direct participants in the form and manner specified in writing by the Central Bank from time to time.
(3) The Central Bank shall maintain records of the accounts of a direct participants, and such records shall be conclusive and the same shall be binding on the Central Bank and the direct participants.
(4) the Central Bank shall pay, on the date they become payable , all amounts either or principal, interest or redemption proceeds, owing on scripless treasury bonds to directs participants in accordance with the accounts of scripless treasury bonds maintained by them with the Central Bank, whether those accounts are in respect of scripless treasury bonds held on their own account or , in the case of dealer direct participants in respect of such treasure bonds hells on their own accounts. And in respect of such treasury bonds held in aggregate customers accounts. Such payments shall be made by such means and in such manner as may be specified by the Central Bank.
(5) A direct participants shall furnish to the Central Banks such returns, details, particulars or information with respect to its own scripless treasury bonds accounts and, in the case of a dealer direct participants, with respect to its own scripless treasury bonds accounts and its aggregate customers accounts, as the central Bank may from time to time specify.
(6) The central Bank may, through any of its officers authorized in writing by the Monetary Board, inspect and take copies of any books, records or accounts maintained by a direct participants relating to or affecting any scripless treasury bonds including any scripless records or accounts with respect to scripless treasury bonds held in its own accounts or in the case of a dealer direct participants, with respect to scripless treasury bonds held in its own account as well as those held in its aggregate customers accounts. The direct participants, and its officers directors, employees, servants and agents shall furnish to the Central Bank all such books records correspondence or any other documents as may be required by the Central Bank, and shall provide the Central Bank with all such assistance as it may require to perform the duties imposed on the Central Bank by this Ordinance with respect to scripless treasury bonds.
(7) In the events the Government incurs any liability or makes payment of any interest principal or redemption proceeds with respect to a scripless treasury bond, and such liability arises or such payments is made ,in consequence, or by reason, of any default of a direct participants or a dealer direct participants, such participants shall be liable on demand by the Government, to indemnify the Government with respect to such liability or payment.
21E. Writing any direct participant to be a dealer
(1) the Central Bank may appoint in direct participant.
(2) A dealer direct participant shall maintain with the Central Bank in addition to, and separate from, its own a scripless treasury bond account an aggregate customers account within shall be a single aggregate account in respect of all transfers effected under subsection (3) of this section through such dealer direct participant. The aggregate customers accounts shall be maintained by the dealer direct participant in such from and manner as may be specified from time to time in writing by the Central Bank.
(3) Only dealer direct participants may transact in scripless treasury bonds on behalf of others. Any person other than a direct participant and the Central Bank, desiring either to make a transfer or take a transfer of a scripless treasury bond shall do so only through a dealer direct participant.
(4) A dealer direct participant shall maintain an account in respect of each of its customers, and any other books, records and files relating to its customers as may be necessary or appropriate to enable to perform his duties under this Ordinance.
(5) A dealer direct participant shall issue to each of its customers a monthly or other periodic statement or statements in respect of such customers scripless treasury bonds on or before the date or dates that may be specified therefor by the Central Bank. Each such form, and shall contain such information, as the central bank may specify.
(6) Upon receipt by a dealer direct participant of such payments from the Central Bank as are referred to in subsection (4) of section 21D, of amounts owing or scripless treasury bonds held in the dealer direct participant's aggregate customers account, the dealer direct participant shall pay to the party or parties entitled thereto, on the date they become payable an amount either of interest or principal or redemption proceeds payable on such scripless treasury bonds. Such payments shall be by such means, and made at the time and such manner, as may be specified by the Central Bank.
(7) The scripless treasury bonds transected by a dealer direct participants in respect of any transfer deducted through him under subsection (3) of this section shall be transacted in the manner, and for the purposes, provided for in this section and section 21F.
(8) The accounts maintained by a dealer direct participant under subsection (2) and (4) of this section, shall in so far as it relater to a customer, be confidential as between the dealer direct participant and the customers and shall, notwithstanding anything in section 54 of this Ordinance, not be disclosed to any person except to the Central Bank or to the this, executors or assigns of the customer or as otherwise required by law unless such disclosure id authorized in witching by the customer.
(9) A dealer direct participant shall be wholly responsible and liable to a customer in respect of all transfers takes or made by such customer through such dealer direct participant.
21F.
(1) A dealer direct participant shall maintain an account in respect of every transferor and transferee of scripless treasury bonds other than the central Bank, or a direct participant who is a party to any transfer effected through such dealer direct participant in accordance with subsection (3) of section 21E except where in respect of a transferee, a customer's account is maintained by another dealer direct participant in which case the first-mentioned dealer direct participant shall have the scripless treasury bonds transferred into the transferee's accounts with the second-mentioned dealer direct participant.
(2) Where a transfer of scripless treasury bonds in made by any person in accordance with subsection (3) of section 21E the dealer direct participant through which the transfer is effected shall forthwith issue, in the form and manner specified from time to time by the Central Bank-
(i) to the transferor, a confirmation or acknowledgement receipt in respect of the transfer; and
(ii) to the transferee, a confirmation or acknowledgement receipt in respect of the transfer, if such dealer direct participant maintains an account in respect of the transferee's treasury bonds;
(3) The confirmation or acknowledgement receipt referred to in subsection (2) of this section shall not be capable of being negotiated and shall be used solely between the dealer direct participant who issued it and the customer to whom it was issued, as evidence of the transfer of scripless treasury bonds under subsection (3) of section 21E to which it relates.
(4) Where the amount in the aggregate customers account maintained by a dealer direct participant with the Central Bank affected by a transfer effected through the dealer direct participant in accordance with subsection (3) of section 21E, the dealer direct participant shall communicate forth with to the Central Bank, information of any change in such amount caused by such transfer.
(5) The Central Bank may, permit any notification or confirmation or acknowledgement receipt required under this section to be in non-written form and 4o be transmitted or delivered by wire, telephone, satellite, cable or any other such electronic, magnetic or optical media, as may be specified, by the Central Bank.'.


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