SAVINGS BONDS ACT

SAVINGS BONDS

CHAPTER 222

SAVINGS BONDS ACT

To make provision for the issue, promotion and management of savings

bonds.

(22nd December, 1970) *

ACT XXXII of 1970, as amended by Acts XXIX of 1979, XXXI of 1981,

XIII of 1983 and XVI of 1997; Legal Notice 411 of 2007; and Act XXVI of

2014.

The short title of this Act is the Savings Bonds Act.

In this Act, unless the context otherwise requires -

"the Account" means the Savings Bonds Income Account held

with the Bank under article 11;

"the Bank" means the Central Bank of Malta established by the

Central Bank of Malta Act;

"bond" means a savings bond issued under this Act;

"financial year" has the same meaning as it has for the purposes

of the Constitution;

"the Fund" means the Savings Bonds Fund established under

article 10;

"the Gazette" means the Malta Government Gazette;

"the Government" means the Government of Malta;

"holder" in relation to a bond means the person or persons in

whose name or names the bond appears in the register;

"House" means the House of Representatives of Malta;

"interest date" in relation to a bond means the date on which

interest is payable thereon;

"Minister" means the Minister responsible for finance;

"prescribed" means prescribed by regulations made under this

Act;

"register" means the register of bonds kept for the purposes of

this Act under article 7 thereof; and

"registered" shall be construed accordingly.

(1) Subject to the provisions of this Act, it shall be lawful

for the Minister to authorise the issue of savings bonds up to an

amount not exceeding eleven million, six hundred and forty-six

thousand and eight hundred and sixty-six euro and ninety-nine

cents (11,646,866.99) or such higher amount as the House may

from time to time by resolution approve.

(2)

The Minister may authorise different issues of bonds or

*See Government Notice No. 990 of 22nd December, 1970.

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successive issues in respect of a particular issue of bonds provided

the total amount at any one time outstanding shall not in the

aggregate exceed the amount or amounts authorised to be issued by

this article.

(3) Any act done and any preliminary expenses incurred in

connection with the issue, promotion and administration of bonds

before the coming into force of this Act shall have the same effect

and validity as if such acts had been validly done and such

expenses been lawfully incurred under this Act; and any act or

thing so commenced but remaining unfinished at the date of the

coming into force of this Act may be continued under this Act as if

such act or thing had been initiated under this Act.

(1) Where the issue of bonds has been authorised in

accordance with article 3, it shall be lawful for the Bank, subject to

the provisions of this Act and of any regulations made thereunder

and under and in accordance with such directions as the Minister

may give, to issue, promote and administer bonds for and on behalf

of the Government.

(2) Any one issue authorised as aforesaid shall remain open for

subscription until such date as the Minister may determine by

notice published in the Gazette not later than one month before

such date or until it has been fully subscribed, whichever is the

earlier event.

(3) Applications for the purchase of bonds shall be lodged with

the Bank or with such agents as may be appointed by the Bank.

The purchaser of a bond shall be entitled to obtain from the

Bank a bond book made out in such form as the Bank may

determine and in which shall be entered the name and address of

the holder of the bond or bonds to which the bond book relates and

all relevant transactions relating thereto and appearing in the

register.

Save as may otherwise be prescribed, bonds shall not be

transferable.

(1) The Bank shall cause a register to be kept of all bonds

and of the transactions relating thereto and shall cause such entries

to be made therein as may be necessary to show the names,

addresses and other relevant details of the holders of the bonds

registered therein.

(2) Save as may otherwise be prescribed, no person shall be

entitled to any bond or to any payment thereunder unless he is the

holder thereof.

(1) The register shall be closed throughout the twenty-

eight days immediately preceding each interest date in respect of

bonds having the same interest date.

(2) Bonds purchased during the period in which the register is

closed in respect of them shall not be registered before the register

re-opens

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Provided that the closing of the register shall not affect the

running of interest and bonds purchased during the period aforesaid

and registered thereafter shall earn interest as if they had been

registered on the date of purchase.

The entries in the register relating to the holders of bonds

and to transactions concerning the bonds registered therein shall be

conclusive evidence of the facts, matters and particulars to which

those entries relate; and a document purporting to be issued by the

Bank certifying that it is a true copy of such an entry in the register

as aforesaid shall be receivable in evidence in any judicial

proceedings and shall, until the contrary is proved be evidence of

the contents of the entry in the register of which it purports to be a

true copy.

(1) There shall be established a fund to be called the

Savings Bonds Fund, and there shall be paid into the Fund all

proceeds derived from the sale of bonds and there shall be paid out

of the Fund all repayments of bonds.

(2) The fund shall be held and administered by the Bank in

accordance with such directions as the Minister, after consultation

with the Bank, may give.

(3) The repayment of all bonds outstanding at any time, the

payment of any interest and, if bonds are issued at a premium, of

any premium thereon, and all payments due under this Act are

guaranteed by the Government and such moneys as may be

required to effect any payment as aforesaid under the said

guarantee shall be a charge on the Consolidated Fund and be

payable out of the said Consolidated Fund and the assets of the

Government.

(1) All dividends, interest and other revenue derived from

investments or other employment of moneys in the Fund made

under article 10(2) shall be paid into an account to be called the

Savings Bonds Income Account and to be held with the Bank.

(2) There shall be charged upon and paid out of the Account

without any further appropriation other than this Act -

(a) all expenses relating to the promotion and

administration of the bonds and all other charges

connected therewith, including all preliminary

expenses incurred or paid before the coming into force

of this Act; and

(b) all interest payable in respect of bonds.

(1) Without prejudice to the provisions of article 10(3), if

at any time during any financial year the amount to the credit of the

Account is insufficient to meet the expenses and charges due on the

said account in accordance with article 11(2), the Minister may

advance to and the Bank shall pay into the said Account such sum

or sums as may be necessary to meet the expenses and charges

aforesaid under such terms and conditions as the Minister, after

consultation with the Bank, may determine.

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(2) If on the last day of any financial year there is a surplus in

the Account, the Minister may, after consultation with the Bank,

direct the transfer of the surplus or of any part thereof to the

Consolidated Fund

Provided that no such transfer as aforesaid may be directed

by the Minister unless the liquid assets of the Fund together with

the estimated market value of the investments held by the Fund as

on that day and any transfer of surplus from the Account into the

Fund under this proviso exceed by at least fifteen per cent the

amount of bonds outstanding on that day; and in any such case any

surplus in the Account shall either be retained in the Account or

transferred to the Fund, or partly so retained and partly so

transferred, as the Minister may, after consultation with the Bank,

direct.

The Bank shall keep or cause to be kept proper accounts

and other appropriate records relating to the issue, promotion and

management of bonds and all such accounts and records shall be

audited by the Auditor General.

The Bank shall, not later than three months before the

beginning of each financial year, submit to the Minister an estimate

of expenditure expected to be incurred in that year on the issue,

promotion and management of bonds and an estimate for the same

period of the receipts expected to accrue to the Account.

(1) The Bank shall, not later than three months after the

close of each financial year, submit to the Minister

(a) a statement of the assets and liabilities of the Fund as

on the last day of the financial year to which the

statement relates;

(b) a statement of the position of the Account as on the

day aforesaid;

(c) a statement of the amount of bonds outstanding on the

day aforesaid, showing the bonds issued and repaid

during the year; and

(d) a list of the securities and other investments held by

the Fund as on the day aforesaid, showing in respect of

each such security or investment and nominal value,

the purchase price and the latest known market value

thereof.

(2) The statements and the list aforesaid shall be duly signed

for and on behalf of the Bank and shall be certified by the Auditor

General.

(3) The Minister shall cause the statements and the list

submitted to him under this article to be published in the Gazette

not later than one month after he has received them.

(4) Nothing in the foregoing provisions of this article shall be

construed as precluding the Minister from requiring the Bank to

submit to him such further information and documents relating to

bonds and to the management thereof as he may deem necessary or

expedient.

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(1) In respect of each issue of bonds authorised by him,

the Minister shall, before any such bonds are issued, specify by

direction the matters mentioned in subarticle (2) and cause such

direction to be published in the Gazette.

(2)

The matters to be specified under subarticle (1)

(a)

the rate of interest payable on the bonds;

(b)

the date of maturity of the bonds;

(c)

the rate at which the bonds are repayable on maturity;

(d)

the dates in each year on which the interest on the

bonds is payable; and

(e) the commission payable on the sale of the bonds.

No interest shall be payable on any bond after the date of

its maturity.

A bond may be encashed at par before the date of its

maturity on the expiration of one month after the receipt of an

application in writing made at any time by the holder to the Bank

for such encashment

Provided that a holder encashing a bond before the

expiration of six months after the date of purchase shall forfeit all

interest that may have accrued thereon, and any interest that may

have already been paid thereon shall be deducted from the par

value of the bond.

(1) On maturity, the holder of a bond may convert the

bond into another bond or bonds issued under this Act if the

prospectus relating to such issue so stipulates.

(2) Such conversion shall be effected on the terms and

conditions as may be attached to the new issue and in such manner

as may be provided in the prospectus of the new issue or as may be

prescribed.

Where the Bank is unable, for any reason, to obtain a valid

discharge for any payment falling to be made to any person in

respect of a bond, it may, unless otherwise provided by or under

this Act, open an account in a bank in Malta for the benefit of the

person to whom payment appears to be due and may, until payment

can be effected to the said person or until a valid payment can

otherwise be made, retain the amount due in the said account.

For the purposes of the Criminal Code any document

issued under this Act entitling a person to any payment under this

Act or to any other document entitling a person to any such

payment shall be deemed to be a document upon the presentation of

which a payment may be obtained within the meaning of article 167

of the said Code, and the provisions of that Code shall apply

accordingly.

The Minister may make and, when made amend, repeal or

re-enact regulations concerning all matters necessary or expedient

for giving effect to any of the provisions of this Act and, without

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prejudice to the generality of the foregoing, to make provision for

(a)

the manner of purchase of bonds;

(b)

the maximum holding of bonds by any person;

(c)

the eligibility of persons to be holders of bonds;

(d)

the cases and manner in which persons may be

registered as joint holders of bonds;

(e) the replacement of lost documents and issue of

duplicate bond books;

(f) the manner of payment of interest;

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

bonds in the case of persons under a disability and in

case of the transmission of bonds of a deceased holder;

(h) all matters required or authorised by this Act to be

prescribed and matters in respect of which the Act

provides that they are subject to, or are made saving

the provisions of, any regulations made under this Act;

(i) all matters incidental to or connected with any matter

hereinbefore mentioned.

(1) No person who is appointed to discharge any duty in

connection with bonds shall disclose the name of the holder or the

amount which he may hold except for the purposes of this Act or

unless required to do so under any law for the time being in force.

(2) Any person who contravenes the provisions of this article

shall be liable on conviction to a fine (multa) not exceeding two

hundred and thirty-two euro and ninety-four cents (232.94).

(1) The Government, the Bank and any person acting

under their authority shall not be liable in respect of any payment

made or act done in accordance with the provisions of this Act or of

any regulations made thereunder unless it is shown, in respect of

any such person as aforesaid, that he acted in bad faith; and any

payment made as aforesaid shall, saving the provisions of this Act

concerning the rights of third parties, be deemed to be a valid

payment and the receipt by the person to whom the payment is

made shall constitute a full discharge of the Government and the

Bank for the amount so paid.

(2) Where a warrant for any payment in respect of a bond is

issued as payable to some person who is neither the holder nor a

person otherwise entitled by or under this Act to receive such

payment, then if it is shown that -

(a) the warrant was issued in good faith and without

negligence, and

(b) the issue of the warrant to that person is attributable to

some act or omission on the part of the holder or of the

person otherwise entitled to receive payment,

the warrant shall, saving the provisions of this Act concerning the

rights of third parties, be deemed to have been duly issued to the

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person entitled to receive payment.

Nothing contained in article 24 shall operate so as to

prevent the recovery by any person of any money lawfully due to

him from the person to whom that money was paid or from any

person claiming under such person or so as to affect the rights of

any person in respect of any bond against a third party.

All documents and instruments made or used under the

provisions of this Act or of any regulations made thereunder shall

be exempt from duty on documents.