MALTA TREASURY BILLS (DEMATERIALISATION) REGULATIONS (dematerialisation)

SUBSIDIARY LEGISLATION 133.02

MALTA TREASURY BILLS

(DEMATERIALISATION) REGULATIONS

2nd April, 2007 *

LEGAL NOTICE 59 of 2007, as amended by Legal Notice 74 of 2015.

The title of these regulations is the Malta Treasury Bills

(Dematerialisation) Regulations.

In these regulations

"Accountant General" refers to the office as established by the

Accountant General Ordinance;

"appointed dematerialisation date" means the appointed date

when Treasury bills are registered on the Central Securities

Depository. The Minister shall, by notice in the Gazette, give

notification of such appointed dematerialisation date;

"authorised intermediary" means an investment firm authorised

by the competent authority, or by a foreign authority to provide

services referred to in Section (1)(b) and (2) of the Annex to the

European Council Directive 93/22/EEC of the 10 May 1993 within

the meaning of Article 15 of the Directive;

"business day" means a day other than a Saturday, a national or

public holiday listed in articles 2 and 5(1) of the National Holidays

and other Public Holidays Act, a bank holiday as declared under

article 3(2)(b) of the Banking Act, or a day when the Trans-

European Automated Real-time Gross settlement Express Transfer

System (TARGET), owned and operated by the Eurosystem, is

closed for business as may be published on the European Central

Bank’s website;

"Central Securities Depository" has the same meaning as

assigned to it by article 2 of the Financial Markets Act;

"competent authority" means the person or body appointed by

the Minister to carry out the functions of competent authority under

the Financial Markets Act;

"cut-off price or rate" means the minimum price or maximum

rate set by the Accountant General at which bids are accepted;

"Exchange" means the Malta Stock Exchange established under

article 24 of the Financial Markets Act;

"recognised investment exchange" means a person in respect of

whom the competent authority has issued a recognition order in

terms of the Financial Markets Act;

"Treasury bills" means dematerialised securities with a maturity

not exceeding twelve months from the date of the bill.

*See Government Notice 250 of 2007.

(1) Treasury bills are registered on the Central Securities

Depository.

(2) The Accountant General may, at his discretion, list on a

recognised investment exchange such Treasury bills.

(1) Treasury bill tranches are identified by the issue date

and the respective maturity date.

(2) The Central Securities Depository shall assign an

International Security Identification (ISIN) Code to each Treasury

bill tranche.

(1) An indicative issuance calendar of Treasury bills shall

be published on a monthly basis in the Gazette and by such other

means as may be determined by the Accountant General.

(2) The calendar shall list the maturities of the Treasury bill

tranches to be issued during the following month, the date of the

auction and any such other information as may be determined by

the Accountant General.

The Accountant General shall determine the nominal

amount of Treasury bills to be issued in the periodic auctions, as

well as the term and mode of issue of such Treasury bills, in

accordance with such authorisation as may be issued from time to

time by the Minister.

(1)

Treasury bills may be issued

(a) at a fixed price or fixed rate of discount, or

(b) by a competitive auction after an invitation to bid, or

(c) by a non-competitive auction.

(2) Treasury bill auctions are held on a weekly basis or as may

otherwise be determined by the Accountant General.

(3) When Treasury bills are issued at a fixed price or fixed rate

of discount, such price or rate shall be fixed by the Accountant

General.

(4) Save as provided in subregulation (5), the Accountant

General shall invite applications or tenders for Treasury bills by

giving notice in the Gazette not less than three business days prior

to the final date on which applications or tenders will be received

by the Accountant General. Such notice shall specify the date of the

auction, the deadline for submission of bids, the period for which

the bills are to be issued, the settlement date and the mode of

payment of bills.

(5) Notwithstanding the provisions of subregulation (4), the

Accountant General reserves the right to invite a select group of

institutional investors to participate in special tenders whereby

such investors will be requested to submit their bids within such

number of hours as may be stipulated in the invitation. These

special tenders shall be settled on the day of the tender or on such

other day as may be set by the Accountant General in the invitation

to bid.

(1) Treasury bills are zero coupon securities and are issued

at a discount with the interest being deducted from their nominal

value.

(2) The computation of discount or interest shall be in

accordance with such methodology as shall be notified to the

market by the Accountant General from time to time.

(1) The minimum amount of the bids tendered shall be

such amount as may be determined by the Accountant General from

time to time.

(2) The Accountant General reserves the right to set a different

minimum amount of bids for different maturities.

(1) Bids shall be made on the prescribed application form,

by fax on a number registered with and recognised by the Treasury,

by e-mail or by such other means as may be determined by the

Accountant General.

(2) Separate applications or tenders shall be made for bids at

different prices or rates as applicable.

(3) Only bids which reach the Treasury by the prescribed time

on the tender date will be accepted.

(4) Only offers with a definite price or rate, as applicable, will

be considered.

(5) The Accountant General shall not be bound to accept any

applications unless payment in respect of the application is made as

may be specified on the form of application.

(1) In the case of a competitive auction, placements shall

be made in accordance with a system whereby bids are sorted in

ascending order of rates or descending order of prices, whichever is

applicable.

(2) The Accountant General reserves the right to determine a

cut-off rate or price, as applicable, on the basis of the bids received.

Applications at a rate equal or lower than such cut-off rate (or at a

full, unless the total amount of such bids exceeds the amount which

the Treasury has decided to issue. In the latter case, bids at the cut-

off price or rate, as applicable, shall be allotted on a pro-rata basis.

All accepted bidders shall pay the bidding price or the price as

calculated from each respective rate as specified in their bids.

(3) The Accountant General reserves the right to reject all bids

without assigning any reason therefore.

Upon acceptance, the successful and unsuccessful bidders

shall be notified of their allotment or rejections by not later than

the following business day.

(1) Settlement of the amount allotted to each successful

bidder shall take place not more than three business days after the

auction date as may be determined by the Accountant General.

(2)

Payment and settlement shall be made on the date on which

the relative Bills are dated, by not later than such time and in

accordance with such procedures as the Accountant General may

determine. The value date of the payment instrument shall be the

issue date of the Treasury bill.

(3) When the date of the auction or settlement falls on a public

holiday, such auction and relative settlement shall take place on the

first business day immediately before.

(1) Bills are redeemed at nominal value upon maturity.

(2) The principal sum of matured bills shall be payable to the

registered holder as appearing in the Central Securities Depository

on the maturity date specified in the bills by crediting directly a

bank account as may be specified by the respective holder.

(3) Treasury bills maturing on a public holiday shall be

redeemed one business day before their maturity date.

The Accountant General may, at his discretion, redeem

bills on a date prior to maturity through buy-back arrangements on

such terms as may be negotiated on a voluntary basis between the

Treasury and the respective Treasury bill holders. The Accountant

General reserves the right to determine whether such buy-back

arrangements are to be offered to all Treasury bill holders through a

public announcement or selectively on a bilateral basis.

(1) Transactions in Treasury bills in the secondary market

shall be subject to the rules of the recognised investment Exchange

where they are admitted to listing and trading.

(2) Settlement of secondary market transactions in Treasury

bills shall be effected in accordance with the prevailing clearing

and settlement rules of the recognised investment Exchange where

the Treasury bills are admitted to listing and trading.