LOCAL LOANS (REGISTERED STOCK AND SECURITIES) ORDINANCE

LOC A L L O A N S (RE G IS T E RE D STO C K AN D SEC U RITIES) [CAP. 161.

CHAPTER 161

LOCAL LOANS

(REGISTERED STOCK AND SECURITIES) ORDINANCE

To repeal and re-enact the law declaring the terms and conditions applicable to local loans

authorized to be raised by the Government of Malta and to make provision in this connection

for the creation and issue of registered stock in addition to the issue of securities in the form

of debentures.

4th December, 1959

Enacted by ORDINANCE XVIII of 1959, as amended by Acts: X of 1963, XXVII of 1971,

XXXIV of 1972, XVIII of 1991, XVI of 1997, IV of 1999, XII and XLII of 2014, XXI of 2015 and

XXIII of 2016.

The title of this Ordinance is Local Loans (Registered

Stock and Securities) Ordinance.

In this Ordinance, unless the context otherwise requires -

"Accountant General" means the Accountant General of the

Government of Malta;

"competent authority" means the Malta Financial Services

Authority established by the Malta Financial Services Authority

Act;

"debenture" means any debenture issued under the provisions of

this Ordinance;

"Malta" has the same meaning as is assigned to it by article 124

of the Constitution of Malta;

"the register" means the register of stock kept by the Accountant

General for the purpose of this Ordinance;

"registered stock" or "stock" means Malta stock issued under the

provisions of this Ordinance;

"Resolution Committee" means the Committee established

within the Malta Financial Services Authority through the Malta

Financial Services Authority Act and which is responsible for the

resolution of credit institutions and investment firms;

"security" means any debenture issued under the provisions of

this Ordinance;

"sinking fund" means a sinking fund established in terms of

article 25;

"special sinking fund" means a special sinking fund established

in terms of article 26(2);

"stockholder" means a person holding registered stock who is

entered as the owner thereof in the register.

This Ordinance shall be applicable only to loans raised

locally in Malta.

PART II

POWER TO RAISE LOANS

(1) Whenever under this Ordinance or by any enactment

authority is given to the Minister responsible for finance to raise

any sum of money by way of loan for any purpose mentioned in

this Ordinance or in that enactment, or whenever it is necessary or

convenient to raise any sum of money for the purpose of repaying

any loan raised by the Government under this Ordinance or any

other enactment, the Minister responsible for finance may, from

time t o time, raise s uch sum or any part thereof under the

LOC A L L O A N S (RE G IS T E RE D STO C K AN D SEC U RITIES) [CAP. 161.

provisions of this Ordinance in either of the following modes

(a) by the creation and issue of registered stock;

(b) by the issue of securities in the form of debentures.

(2) Each issue of registered stock or securities under this

Ordinance for the purpose of raising any specified sum of money

shall be deemed to be stock or securities issued in respect of a

separate loan notwithstanding that the sum of money so raised is

part only of a sum of money authorized by any other enactment to

be raised by way of loan.

(1) The Minister responsible for finance may, in pursuance

of the Recovery and Resolution Regulations made under the Malta

Financial Services Authority Act

(a) further to a recommendation by the competent

authority in consultation with the Resolution

Committee, raise a sum of money by way of loan for

the purpose of providing precautionary recapitalisation

measures in favour of credit institutions in view of

preserving financial stability; or

(b) further to a resolution action taken by the Resolution

Committee in consultation with the competent

authority, raise a sum of money by way of loan for the

purpose of providing public backstop measures; or

(c) in close cooperation with the Resolution Committee,

raise a sum of money by way of loan for the purpose of

providing extraordinary public financial support

through financial stabilisation tools.

(2) For the purpose of sub-article (1), the Minister is hereby

authorised to borrow sums of money on such terms and subject to

such conditions as the said Minister may approve under the

provisions of this Ordinance for such amount not exceeding any

amount which the House of Representatives may from time to time

by resolution authorise.

(1) The Minister responsible for finance may represent the

Republic of Malta when entering into the Loan Facility Agreement

with the Single Resolution Board in pursuance of Regulation (EU)

No. 806/2014 of the European Parliament and of the Council of 15

July 2014 establishing uniform rules and a uniform procedure for

the resolution of credit institutions and certain investment firms in

the framework of a Single Resolution Mechanism and a Single

Resolution Fund and amending Regulation (EU) No. 1093/2010.

(2) The Minister responsible for finance may, in terms of the

Loan Facility Agreement between the Republic of Malta and the

Single Resolution Board referred to in sub-article (1), raise a sum

of money by way of loan for the purpose of lending to the Single

Resolution Board an unsecured loan facility of up to sixty-six

million Euro (€66,000,000).

(3) For the purposes of sub-articles (1) and (2) the Minister

responsible for finance is hereby authorised to borrow sums of

L O CA L L O A N S (REG ISTERED STO C K AN D SEC U RITIES)

money on such terms and subject to such conditions as the said

Minister may approve under the provisions of this Ordinance for an

amount which in total does not exceed sixty-six million Euro

(€66,000,000).

The principal moneys and interest represented or secured

by any registered stock or securities issued under this Ordinance

are hereby charged upon and shall be payable out of the general

revenue and assets of the Government of Malta.

(1) The Minister responsible for finance shall, in respect of

each loan to be raised under this Ordinance, specify by direction

published in the Government Gazette -

(a)

the sum of money to be raised by that loan;

(b)

the mode or modes of raising the loan;

(c)

the rate of interest payable on the loan;

(d)

the dates in each year on which the half-yearly interest

of the loan shall be payable;

(e) the rate, if any, at which a half-yearly appropriation

out of the general revenue and assets of the

Government of Malta shall be made as a contribution

to the sinking fund established for the purpose of

redeeming that loan and the period within which such

contribution shall commence;

(f) the date of redemption of the registered stock or

securities to be issued for the purpose of raising that

loan and, where applicable, the method of redemption

of such stock or securities;

(g) whether the interest payable on any registered stock or

debentures issued under the authority of this

Ordinance shall be exempt from all or any of the taxes

and duties payable under any other law in force in

Malta.

(2) The date of redemption of any registered stock or securities

shall not be later than sixty years from the date of issue of such

stock or securities.

(3) Where the Minister responsible for finance deems it

expedient to reserve an option to redeem any registered stock or

securities at any date earlier than the date of redemption specified

for such stock or securities by the directions under sub-article (1),

he shall by such directions further specify the terms and conditions

on which such stock or securities may be redeemed at any earlier

date.

Upon the publication under article 6 of the directions of the

Minister responsible for finance in respect of any loan to be raised

under this Ordinance the Accountant General may, subject to the

provisions of such directions and to such further directions as the

Minister responsible for finance may give in that behalf, make all

such arrangements as may be necessary to raise that loan upon the

most favourable terms that can be obtained.

LOC A L L O A N S (RE G IS T E RE D STO C K AN D SEC U RITIES) [CAP. 161.

PART III

REGISTERED STOCK

The Accountant General shall keep a register in respect of

each issue of registered stock under this Ordinance in which all

such stock and all transfers of and all dealings in such stock shall

be registered and in which shall be entered all matters and things

which by this Ordinance are required to be entered in the register.

The Government shall be bound to pay to the person

registered for the time being as the stockholder the principal sum

represented by that stock and the interest due thereon, in

accordance with the provisions of this Ordinance, at the rate and on

the dates directed by the Minister responsible for finance under

article 6 or in pursuance of an option to redeem such stock reserved

in such directions.

For the purposes of this Ordinance, no person shall be

entitled to any registered stock unless he is registered as a

stockholder in respect thereof.

No person shall be registered as a first stockholder of any

registered stock except upon payment in full of the purchase price

of that stock.

Every stockholder shall be entitled to obtain from the

Accountant General a stock certificate in a form to be prescribed

and no stockholder, other than the first stockholder, of any stock

shall be entitled to obtain a stock certificate save upon payment of

the prescribed fee

Provided that one stock certificate only shall be issued in

respect of any one holding.

(1) Subject to the provisions of sub-article (3), the title of

any stockholder to any registered stock shall not be deemed for the

purposes of this Ordinance to be transferred to any other person

save upon the execution of such instrument of transfer as may be

prescribed and upon the registration of the transferee as the

stockholder under article 14.

(2) Interest which has fallen due in respect of any registered

stock at the date of any transfer of such stock but which has not

been paid to the stockholder for the time being, shall not be deemed

to be payable to a transferee of that stock unless the instrument of

transfer expressly provides for the payment of that interest to that

transferee.

(3) When the Accountant General is satisfied that a stockholder

has died he may, subject to the provisions of article 14 (b), cause

the stock of the deceased stockholder to be transferred into the

name of any person who proves to his satisfaction that he is

lawfully entitled to the stock on the death of the stockholder.

No person shall be registered as the transferee of any

registered stock for the purposes of this Ordinance unless -

(a) in the case of a transfer under article 13(1) he has

L O CA L L O A N S (REG ISTERED STO C K AN D SEC U RITIES)

surrendered to the Accountant General the stock

certificate and the instrument of transfer relating to

that stock and has paid the prescribed fee; or

(b) in the case of a transfer under article 13(3) he has

surrendered to the Accountant General the stock

certificate relating to the stock of the deceased

stockholder and paid the prescribed fee.

The register shall be closed for a period of twenty-one days

immediately preceding each date upon which interest on that stock

falls due and no transfer of that stock shall be registered during that

period.

The entries in the register kept under the provisions of this

Ordinance shall be conclusive evidence of the facts, matters,

particulars and transactions to which those entries relate

Provided that, notwithstanding the provisions of any other law, a

copy of any entry in the register certified under the hand of the

Accountant General to be a true copy of the original entry shall be

receivable in evidence in any judicial proceeding and shall, until

the contrary is proved, be deemed to be evidence of the contents of

the entry in the register.

PART IV

DEBENTURES

(1) Debentures shall be issued either as registered

debentures or as debentures payable to bearer.

(2) Every debenture shall be signed by the Accountant General

for and on behalf of the Government and shall, when issued, bind

the Government to pay the principal sum and the interest thereon in

accordance with the provisions of this Ordinance, at the rate and on

the dates specified in the directions by the Minister responsible for

finance under article 6 or in pursuance of an option to redeem such

debenture reserved in such directions.

(3) Debentures shall be issued in such form and in such

denominations as the Minister responsible for finance may direct.

(1) There shall be attached to every debenture coupons for

the payment of interest which falls due thereunder

Provided that the number of coupons attached to a

debenture on the date of its issue to any person may cover a period

shorter than that of the currency of the debenture if, in the opinion

of the Accountant General, it is inconvenient or inexpedient to

attach to the debenture coupons sufficient in number to cover the

entirety of the period of the currency of the debenture.

(2) If the number of coupons attached to any debenture on the

date of its issue to any person is insufficient to cover all payments

of interest due on that debenture after that date, the holder of that

LOC A L L O A N S (RE G IS T E RE D STO C K AN D SEC U RITIES) [CAP. 161.

debenture shall be entitled to a renewal thereof at such time and in

such manner and circumstances as may be prescribed.

(1) Every registered debenture shall, before being issued,

be registered by the Accountant General in a register to be kept for

that purpose and the name and address of the holder of each

registered debenture and all transfers of registered debentures shall

be noted on that register.

(2) Registered debentures shall be transferable by instrument in

writing in such form and subject to such conditions as may be

prescribed.

(1) Every debenture payable to bearer shall, before being

issued, be registered by the Accountant General in a register to be

kept for that purpose.

(2) Redemption moneys and interest moneys payable on any

bearer debenture issued under the provisions of this Ordinance

shall be payable only to a person who at the time that such moneys

are payable is, or at the time when he subscribed for or otherwise

acquired such debenture was, ordinarily resident in Malta.

(3) Every bearer debenture and coupon, and the right to receive

the principal amount and interest represented thereby, shall be

transferable by delivery.

PART V

PAYMENT OF INTEREST ON STOCK AND SECURITIES

So long as any interest is payable under this Ordinance in

respect of any stock or securities, the Minister responsible for

finance shall, in each half year ending with the date on which the

interest on such stock or securities falls due, appropriate out of the

general revenue and assets of the Government of Malta a sum

sufficient to meet all interest payable on that date and shall

authorize the Accountant General to pay such interest out of the

sum so appropriated.

(1) The interest due on any registered stock or securities

shall be payable half-yearly on the dates specified by the directions

of the Minister responsible for finance under article 6.

(2) Where any amount has become payable on any date as

interest due on any registered stock or securities, no interest on that

amount shall, after that date, be paid or payable by the Government

to any person in any circumstances.

No person shall be entitled to claim interest on any

registered stock or securities in respect of any period which has

elapsed after the earliest date on which demand could lawfully have

been made for the payment of the principal amount due on such

stock or securities.

L O CA L L O A N S (REG ISTERED STO C K AN D SEC U RITIES)

All payments of interest and all payments of the principal

amount due on any registered stock or securities shall be made by

the Accountant General out of the Consolidated Fund without the

need of any further appropriation other than this Act.

PART VI

SINKING FUNDS

(1) Within the period specified in the directions of the

Minister responsible for finance under article 6 as the period within

which contributions to the sinking fund for any loan shall

commence, the Minister responsible for finance shall appropriate

out of the general revenue and assets of the Government of Malta a

sum determined in accordance with the rate specified in those

directions as the contribution to the sinking fund established for the

purpose of redeeming that loan and shall thereafter make a like

appropriation in each half year ending with the date specified in

those directions for the payment of the half-yearly interest on any

stock or securities issued in respect of that loan.

(2) The Minister may further authorise the appropriation out of

the general revenue and assets of the Government of Malta a

contribution towards a special sinking fund established in

accordance with article 26(2).

(1) A separate sinking fund shall be established for each

loan raised under this Ordinance.

(2) A special sinking fund shall be established for the purpose

of the repurchase of loans raised under this Ordinance.

(1) All moneys appropriated under article 25 as

contributions to the sinking fund established for any loan shall be

placed at interest or invested in such stocks or securities or in such

other investments or classes of investments, including registered

stock or debentures issued under the provisions of this Ordinance,

as the Minister responsible for finance may from time to time

direct.

(2) The dividends, interest, bonus and other profit of any

investment of any part of any sinking fund shall be placed at

interest or invested as directed by the Minister responsible for

finance so as to form part of that sinking fund in like manner as

moneys appropriated under article 25 as contributions to the

sinking fund.

Notwithstanding anything to the contrary contained in this

Ordinance, if at any time the Accountant General is satisfied that

the sinking fund of any loan raised under the provisions of this

Ordinance will be sufficient with further accumulations of interest,

but without further payments of contributions, to enable the loan to

be redeemed at the time fixed for its redemption, he shall inform

the Minister responsible for finance accordingly and the Minister

LOC A L L O A N S (RE G IS T E RE D STO C K AN D SEC U RITIES) [CAP. 161.

responsible for finance is hereby authorized in such event to

suspend further payments of half-yearly contributions to that

sinking fund

Provided, however, that the contributions to that sinking fund

shall be recommenced if the Accountant General at any time

thereafter informs the Minister responsible for finance that he is no

longer satisfied that the sinking fund with further accumulations of

interest will be sufficient for the redemption of that loan.

There shall be paid out of the sinking fund all expenses

specifically incurred in, or incidental to, the investment and

management of that fund and the repayment of the loan for which

that fund was established.

Where no sinking fund is established or in the event of the

sinking fund established for any loan under this Ordinance being

found, at the time fixed for the repayment of that loan, to be

insufficient for such redemption, the loan shall be repaid or the

deficiency shall be made good out of the general revenue and assets

of the Government of Malta without any further appropriation other

than this Ordinance.

PART VII

CONVERSION OF LOANS

The Minister responsible for finance shall have and may

from time to time exercise the following powers and authorities or

any of them

(a) he may declare any stock or securities issued in Malta

under the provisions of this or any other law to be

convertible into registered stock or other securities to

be issued under the provisions of this Ordinance;

(b) he may authorize the creation and issue under this

Ordinance of such an amount of registered stock or

securities as may be necessary for the conversion of

the stock or securities in respect of which a declaration

has been made under paragraph (a);

(c) he may authorize the creation and issue under this

Ordinance of such registered stock or securities as may

be necessary for the purpose of paying any expenses

incurred in the creation and issue of registered stock or

securities under this article;

(d) he may declare that all privileges, exemptions and

immunities attaching by virtue of any law in force in

Malta to any stock or securities shall attach to any new

registered stock or securities issued under this

Ordinance in conversion of such earlier stock or

securities.

L O CA L L O A N S (REG ISTERED STO C K AN D SEC U RITIES)

Any conversion authorized under article 31 may be

effected either by arrangement with the holders of existing stock or

securities, or by purchase thereof out of moneys raised by the sale

of stock or securities, or partly in one way and partly in the other.

PART VIII

ISSUE OF DUPLICATES AND RENEWALS OF STOCK CERTIFICATES

AND SECURITIES AND EXCHANGE AND CONSOLIDATION

(1) The Accountant General may issue duplicate stock

certificates and duplicate securities in such circumstances as may

be prescribed.

(2) The Accountant General may issue renewals of stock

certificates and securities in such circumstances as may be

prescribed.

The Accountant General may, in such circumstances as

may be prescribed -

(a) issue a notice to the holder of any security directing

him to apply for a renewal of that security; and

(b) withhold payment of the interest or principal amount

due in respect of that security until the application for

renewal has been made and determined.

On application made by any person claiming to be the

holder of any registered stock or securities issued under this

Ordinance, the Accountant General may, if he is satisfied that the

applicant is the lawful holder of such stock or securities, and on

payment of the prescribed fee, exchange stock for securities or

securities for stock or securities of one kind for securities of the

other kind

Provided that -

(a) all stock and securities so given or taken in exchange

shall have been issued in respect of the same loan; and

(b) the nominal value of the stock or securities given by

the Accountant General in exchange shall be the same

as the nominal value of the stock or securities taken by

him in exchange.

Subject to such conditions as may be prescribed the

Accountant General may -

(a) on the application of a person claiming to be entitled

to any stock or securities, and

(b) on being satisfied of the justice of the claim of such

applicant, and

(c) on surrender of the stock certificate relating to such

stock or of such securities receipted in the prescribed

manner, and

LOC A L L O A N S (RE G IS T E RE D STO C K AN D SEC U RITIES) [CAP. 161.

(d) on payment of the prescribed fee,

consolidate or subdivide such stock or securities and issue to the

applicant one or more new stock certificates or securities as may be

required.

Where application is made to the Accountant General

under this Ordinance for the issue of a duplicate stock certificate or

a duplicate security or for the exchange, renewal, consolidation or

subdivision of any stock or securities, the Accountant General may

require the applicant, as a condition precedent to the grant of the

application, to execute a bond, in such form and subject to such

security as the Accountant General may direct, undertaking to

indemnify the Government against the claims of all persons

claiming under the original stock certificate or security or under the

stock or securities so exchanged, renewed, consolidated or

subdivided, as the case may be.

On payment by or on behalf of the Government to the

holder of a debenture of the amount expressed therein on or after

the date when it becomes due or on the renewal of a debenture

under article 33, or on the exchange of a debenture under article 35,

or on the consolidation or subdivision of a debenture under article

36, the Government shall be discharged in the same way and to the

same extent as if such debenture was a promissory note payable to

bearer.

Save as otherwise provided in this Ordinance the liability

of the Government shall -

(a) in respect of any registered stock or security redeemed

on or after the date on which payment of the principal

amount becomes due, be discharged after the lapse of

six years from that date;

(b) in respect of any security in place of which a duplicate

is issued under article 33, be discharged after the lapse

of six years from the date of the issue of such duplicate

or from the date of the last payment of interest on such

security, whichever date is the later;

(c) in respect of a security for which a renewed security is

issued under article 33 or in respect of stock or

securities in place of which new stock or securities are

issued upon an exchange under article 35 or upon a

consolidation or subdivision under article 36, be

discharged after the lapse of six years from the date of

the issue of the renewed security or of the new stock or

securities, as the case may be.

L O CA L L O A N S (REG ISTERED STO C K AN D SEC U RITIES)

PART IX

MISCELLANEOUS

The signature of the Accountant General may be printed,

stamped, engraved, or impressed by any mechanical process on any

stock certificate or debenture, and a signature so printed, stamped,

engraved or impressed shall be as valid as if it had been inscribed

in the proper handwriting of the Accountant General.

All documents or instruments made or used under the

provisions of this Ordinance shall be in such form as may be

prescribed and, notwithstanding the provisions of any other

Ordinance, shall be free from duty on documents.

(1) No person shall be entitled to inspect, or to receive

information derived from, any registered stock or security in the

possession of the Government or any register, book or other

document kept or maintained by or on behalf of the Government in

relation to registered stock or securities, save on payment of such

fee and save in such circumstances and on such terms and

conditions as may be prescribed.

(2) Nothing in this article shall apply to the Auditor General or

to the Commissioner of Inland Revenue.

(1) The Minister responsible for finance may make

regulations for the purpose of giving effect to the provisions of this

Ordinance.

(2) In particular and without prejudice to the generality of the

foregoing power, such regulations may provide for all or any of the

following matters

(a) the manner in which payment of interest in respect of

stock or securities is to be made and acknowledged;

(b) the issue of duplicate stock certificates and duplicate

securities;

(c) the renewal of stock certificates and securities;

(d) the manner of payment of interest to joint holders of

stock or securities;

(e) the circumstances in which alterations may be made in

the register;

(f) the payment of principal or interest and transfer of

stock and securities in the case of persons under a

legal disability;

(g) the disposal of unclaimed interest;

(h) the conditions subject to which stock or securities may

be exchanged, consolidated or subdivided;

(i) the fees to be paid in respect of anything to be issued

or done under the provisions of this Ordinance;

(j) all matters required by this Ordinance to be prescribed

and all matters incidental to or connected with the

matters hereinbefore enumerated.

LOC A L L O A N S (RE G IS T E RE D STO C K AN D SEC U RITIES) [CAP. 161.

Notwithstanding anything contained in this Ordinance, the

provisions concerning any registration and the issuing of stock

certificates shall not apply in the case of the issues of Government

registered stock and securities which may be traded on a recognised

stock exchange under the Financial Markets Act.