ACT No. IX of 1997 AN ACT to amend Various Financial Laws BE IT ENACTED by the President, by and with the advice and consent of the House of Representatives, in this present Parliament assembled, and by the authority of the same, as follows: - (emendatati-art)

I assent.

(L.s.)

Ugo MIFSUD BONNICI

President

23rd May, 1997

ACT No. IX of 1997

AN ACT to amend Various Financial Laws

BE IT ENACTED by the President, by and with the advice and

consent of the House of Representatives, in this present Parliament

assembled, and by the authority of the same, as follows: -

This Act may be cited as the Financial Laws (Amendment)

Act, 1997, and shall come into force on such date as the Minister

responsible for fmance may by order establish, and different dates may

be so established for different provisions and different purposes thereof.

The Income Tax Act shall be amended as follows:-

the Income Tax Act

(a) for paragraph (c) of subsection (1) of section 4 thereof

there shall be substituted the following:-

n(c) (i) dividends, premiums, interest or discounts,

not being accrued income earnings as defined in sub-

paragraph (ii) of this paragraph; and

(ii)

the accrued income earnings arising

(1) upon the transfer of securities prior to

their redemption; and

(2)

upon the redemption of such securities.

For the purposes of this sub-paragraph

"accrued income earnings" means -

(i) in the case of any prescribed securities issued

with a term exceeding twelve calendar months, the

amount equivalent to the mathematical calculation of

the interest or other income accrued on the security based

on -

I assent.

(a) the time it is held by the transferor from

the last coupon payment, or

Ugo MIFSUD BONNICI

(L's.)

(b) the time it is held by the transferor from

President

the date of acquisition of the security,

23rd May, 1997

as the case may be. For the purposes of this calculation

it shall be presumed that the interest or other incom;

being so calculated has accrued evenly from the last

ACT No. IX of 1997

coupon payment or throughout the life-span of the

relative security, as the case may be;

AN ACT to amend Various Financial Laws

(ii) in case of securities issued with a term not

BE IT ENACTED by the President, by and with the advice and

exceeding twelve calendar months, the excess, if any,

consent of the House of Representatives, in this present Parliament

of the transfer value or redemption value, as the case

assembled, and by the authority of the same, as follows:-

may . be, over the acquisition value, all values inclusive

of accrued interest, if any;

1. This Act may be cited as the Financial Laws (Amendment)

Shon title and

Act, 1997, and shall come into force on such date as the Minister

commencement.

"redeinption" includes a cancellation by the issuer of a

responsible for finance may by order establish, and different dates may

security;

be so established for different provisions and different purposes thereof.

"securities" includes bonds, debentures, notes, loan

2. The Income Tax Act shall be amended as follows:-

Amendment of

s~ock, certificates of deposit, commercial paper, treasury bills,

the Income Tax Act

discount securities, and other similar instruments having a

(Cap. 123).

(a) for paragraph (c) of subsection (1) of section 4 thereof

fixed or determinable date of redemption, which create or

there shall be substituted the following:-

acknowledge indebtedness in favour of the holder;

"(c) (i) dividends, premiums, interest or discounts,

"transfer" includes any assignment, sale, partition,

not being accrued income earnings as defined in sub-

d~nati?n, sale by ins~alments, transfer causa mortis and any

paragraph (ii) of this paragraph; and

alienation under any title, but does not include a redemption;";

(ii)

the accrued income earnings arising

paragraph (a) of section 41 thereof shall be amended as

(b)

follows

upon the transfer of securities prior to

(1)

their redemption; and

(i) in sub-paragraphs (ii) and (iii) thereof, immediately

after the words "or premiums payable" wherever these occur,

(2)

upon the redemption of such securities.

there shall be inserted the words "as defined in paragraph ( C)

of subsection (1) of section 4 of this Act,";

(ii) for sub-paragraph (iv) thereof there shall be

substituted the following

"(iv) interest, discounts or premiums payable as

defined in paragrapb ( c) of subsecti.on (J) of section 4 of

this Act, in respect of a public issue in Malta by a

company, entity or other legal person howsoever

constituted and whether resident in Malta or otherwise;";

(iii) in sub-paragraph (v) thereof, for the words

"collective investment scheme;" there shall be substituted the

words "collective investment scheme; and";

(iv) immediately after sub-paragraph (v) thereof there

shall be added the following sub-paragraph

"(vi) accrued .income earnings as defined in

paragraph (c) of subsection (1) of section 4 of this Act

in respect of securities issued by any entity referred to

and as specified in sub-paragraphs (ii), (iii) and (iv) of

paragraph (a) of this section;"; and

(c) immediately after section 41 thereof there shall be added

the following new section;

41A. The Minister may make regulations determining

how the investment income provisions contained in sections

modifications. 32 to 41 of this Act shall apply in relation to particular

securities, making such modifications to the operation thereof

as he may deem necessary in respect of particular securities.".

The Malta Treasury Bills Act shall be amended as follows

(a)

in section 4 thereof

(i) for the words "shall be a bill in the prescribed form",

in subsection (1) thereof, there shall be substituted the words

"shall be a bill or a note in the prescribed form";

(ii) in subsection (3) thereof, immediately after the

words "or a multiple of one thousand liri" there shall be added

the words "or for any other sum as the Minister may by notice

in the Gazette direct";

(b) in paragraph (b) of section 5 thereof immediately after

the words "at fixed rates of discount" there shall be added the

words "and, or, fixed rates of interest"; and

(c)

section 7 thereof shall be deleted.

The Central Bank of Malta Act shall be amended as follows

(a)

in subsection (1) of section 15 thereof:-

(i) for the words "grant to any bank incorporated in

Malta" in paragraph (k) thereof, there shall be substituted

the words "grant, at its discretion, to any bank or financial

institution in Malta"; and

(ii) in paragraph (1) thereof, the words "with banks

incorporated in Malta" shall be deleted; and

(b)

in section 37 thereof:-

(i) for the words "to open and maintain reserve

deposits on account" in subsection (1) thereof, there shall

be substituted the words "to maintain reserve deposits";

(ii) for the words "has agreed" in subsection (2)

thereof, there shall be substituted the words "may agree";

and

(iii) in subsection (4) thereof, the words "to meet

temporary deficiencies in its working balances with the

Bank" shall be deleted, and the second proviso shall be

deleted.

The Malta Stock Exchange Act, shall be amended as follows

(a) for the definition of "securities" in section 2 thereof,

there shall be substituted the following:-

" "securities" means securities as defined in Article 2

of the First Schedule to this Act, issued or to be issued by a

company, a corporate body established by law, the

Government of Malta or other issuers";

(b)

section 11 thereof shall be repealed;

(c)

In the Statute contained in the Schedule thereto:-

(i) immediately after the definition of "Committee"

in paragraph (i) of article 2 thereof there shall be added the

following definition:-

" "securities" means:-

(a) Shares, stocks, bonds, debentures,

certificates of deposits, notes and other like

instruments denoting ownership or creating or

acknowledging indebtedness

Provided however that securities shall not

mean

(.1) any instrument acknowledging or

creating indebtedness for, or for money

borrowed to defray, the consideration

payable under a contract for the supply of

goods or services;

(2) a cheque or other bill of exchange,

a banker's draft or a letter of credit; or

(3) a banknote, a statement showing

a balance in a current, deposit or savings

account or (by reason of any financial

obligation contained in it) to a lease or other

disposition of property, or an insurance

policy.

(b) Units in a collective investment scheme

as defined in the Investment Services Act, 1994.

Ac. No. XIV of \994 .

(c) Warrants, options, certificates or other

instruments, including any record whether or not

in the form of a document, entitling the holder to

subscribe for, acquire, sell or otherwise dispose

of, underwrite or convert any instrument or an

interest in any instrument falling within this

definition or for any currency.

(d) Certificates or other instruments which

confer property rights in respect of any instrument

falling within this definition.

(e) Futures and foreign exchange contracts

entered into for investment purposes or foreign

exchange acquired or held for investment

purposes.

Rights under a contract for differences

(f)

or under any other contract the purpose or intended

purpose of which is to secure a profit or avoid a

loss by reference to fluctuations in the value or

or other factor designated for that purpose in the

contract."; and

in paragraph (i) of article 3 thereof for the words

(ii)

"shall consist of licensed stock brokers:" there shall be

substituted the words "shall consist of stock brokers licensed

by the Council in terms of section 9 of the Act to carry out

the functions of a broker for the purchase or sale of quoted

securities:" .

The Controlled Companies (procedure for Liquidation) Act. AJne~entoftlle

1995 shall be amended as follows:-

(a) section 9 thereof shall be renumbered as subsection (1)

thereof and immediately after subsection (1) as renumbered there

shall be added the following two subsections:-

"(2) The Minister may appoint a Secretary to the Board

for such period as the Minister may establish in the

Secretary's letter of appointment. which. period shall not

exceed three years.

(3) The Secretary shall perform all functions which

are vested at law in the Registrar of Courts."; and

immediately after section 17 thereof there shall be

(b)

added the following section

"Minister may

The Minister may make regulations not

inconsistent with any of the provisions of this Act for

the carrying out of the provisions of this Act.".

7. In paragraph (a) of subsection (12) of section 122 of the

Companies Act, 1995, immediately after the words "securities in a public

company which are quoted on the Malta Stock Exchange" there shall

be inserted the words "and in respect of which securities arrangements

have been made for the maintenance by the Malta Stock Exchange of

the relevant register of holders thereof'.

Passed by the House of Representatives at Sitting No. 68 of

Monday, 19th May, 1997.

Myriam Spiteri Debono

Speaker

RICHARD J. CAUCHI

Clerk to the House of Representatives.

Mitbugh f1-I $tamperija tal-Gvem - P,·jllted at IIu: GOl'cmmem Priming Prl.',(s