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Short title.
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1. This Ordinance may be cited as the Local Treasury Bills Ordinance.
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Power to borrow by the issue of Treasury Bills, & c.
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2.
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(1) The Minister in charge of the subject of Finance whenever authorized thereto by a resolution of Parliament may direct the Deputy Secretary to the Treasury to borrow by the issue in Sri Lanka of Sri Lanka Government Treasury Bills, sums not exceeding She staunch specified in such resolution ; and the Deputy Secretary to the Treasury may also, with the approval of the Minister in charge of the subject of Finance, borrow from time to time by the issue of such Treasury Bills, such sums as may be required to pay off at maturity, bills already lawfully issued by him and outstanding.
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(2) All acts or things necessary for the purpose of, and in connection with, the issue and repayment of Treasury Bills under this Ordinance shall be done on behalf of the Deputy secretary to the Treasury by the central Bank.
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(3) Treasury Bills may be issued either as bills in the form of written certificates or as Scripless Treasury Bills.
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(4) Any application or bids for the purchase of Treasury Bills may having regard to the interests of the national economy be restricted to primary dealers and designated non-dealer bidders.
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Principal of bills.
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3. The principal moneys represented by the Treasury Bills issued under the provisions of this Ordinance are hereby charged upon and shall be payable out of the Consolidated Fund and assets of Sri Lanka.
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Proceeds of bills.
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4. The proceeds of the issue of the Treasury Bills shall be paid into the Treasury.
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Amounts and period of currency of bills.
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5. Every Treasury Bill issued under this Ordinance shall be for the sum of one thousand rupees or a multiple of one thousand rupees and shall be payable at par at such time or times as the Minister in charge of the subject of Finance shall before the issue of such Treasury Bills fix and determine but not later than one year from the date of issue.
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6. There shall be appropriated out of the Consolidated Fund the necessary sum to pay the principal represented by the Treasury Bills, and the Deputy Secretary to the Treasury shall pay the said principal when the Treasury Bills fall due ;
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Provided however that if the day on which a Treasury Bill falls due is a day on which the Central Bank is not open for business, payment shall be made in accordance with such procedures as may be prescribed.
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Treasury Bills other than scripless Treasury Bills
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7.
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(1) Every Treasury Bill issued under this Ordinance, other than scripless Treasury Bill, shall bear the signature in feasible of the Deputy Secretary to the Treasury.
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(2)Title to every Treasury Bill, other than a Scripless Treasury Bill shall be transferable by endorsement and delivery of the Bill
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(3) With respect to every Treasury Bill other than a Scripless Treasury Bill
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(a) no endorsement of the Treasury Bill shall be valid unless made by the signature of the holder written on the reverse of the Bill in one of the spaces provided for that purpose, or in a separate assignment or other instrument attached thereto which is in a form prescribed by regulation and issued by the Central Bank;
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(b) a person shall not, by reason only of his having endorsed or endorsed and delivered a Treasury Bill be liable to pay any money due thereon.”.
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Central Bank to supervise or to monitor the transactions of primary dealers and non dealer bidders. Issue of Scrip less Treasury Bills.
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7A. Without prejudice to anything contained in this Ordinance particularly the provisions of sections 8, 9, 10 and 11, the Central Bank shall regulate, supervise and monitor the primary dealers and the designated non dealer bidders with respect to their transactions in Treasury Bills issued in the form of written certificates.
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Issue of Scripless Treasury Bills.
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7B. The Minister may, by notification published in the Gazette and in two local newspapers in Sinhala, Tamil and English, notify the public of a day, from which, Treasury Bills may be issued in the form of Scripless Treasury Bills.
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Conversion of Treasury Bills issued in the form of written certificates.
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7C.
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(1) The Central Bank may by notification published in the Gazette and in two local newspapers in sinhala’, Tamil and English, require the holders of Treasury Bills issued in the form of written certificates having a specified date of maturity, if they so desire, to surrender such Bills for conversion into Scripless Treasury Bills in accordance with such procedure as may be prescribed. Such Treasury Bills shall upon conversion into Scripless Treasury Bills be deemed to be Scripless Treasury Bills issued under this Ordinance.
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(2) Nothing contained in subsection (1) shall be construed as affecting or discharging the liability of the Government under this Ordinance in respect of a Treasury Bill which is not converted into a Scripless Treasury Bill as provided for in subsection (1).
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Issue trading and maintenance of records of scripless Treasury Bills.
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8
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(1) The Central Bank shall have the authority to take any section necessary for the issue and trading of Scripless Treasury Bills in accordance with the provisions of this Ordinance. Without limiting the generality of the foregoing, the Central Bank shall have the authority to undertake and carry out the following:-
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(a) the making and maintaining of entries in the records of the Central Bank to record the issuance and trading of Scripless Treasury Bills ;
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(b) the maintenance of accounts to record the ownership or custodial holdings of Scripless Treasury Bills or interests therein, for or on behalf of direct participants or the Central
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(c) fee appointment from time to time of direct participants referred to in section 9, and the regulation, supervision or monitoring of such direct participants with respect to their transactions in Scripless Treasury Bills and the performance of their duties as direct participants;
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(d) the appointment from time to time of dealer direct participants referred to in section 10, and the regulation, supervision or monitoring of such dealer direct participants with respect to their transactions in Scripless Treasury Bills and the performance of their duties as dealer direct participants;
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(e) the appointment from time to time of interdealer brokers, and the regulation, supervision or monitoring of such interdealer brokers with respect to their brokering of Scripless Treasury Bills and the performance of their duties as interdealer brokers;
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(f) the appointment from time to time of primary dealers, and the regulations, supervision or monitoring of such primary dealers with respect to their transactions in Scripless Treasury Bills and the performance of their duties as primary dealers;
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(g) the appointment of designated non-dealer bidders and the regulation, supervision or monitoring of such non-dealer bidders with respect to their transactions in Scripless Treasury Bills and the performance of their duties as non-dealer bidders;
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(h) the formulation of a code of conduct for the promotion and development o an orderly market for Scripless Treasury Bills.
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(2) The Central Bank may, to the extent not otherwise provided for In sections 3, 9, 10, and 11, issue directions to direct participants or any category thereof to provide for the following: –
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(a) the manner in which the accounts of customers of dealer direct participants are to be maintained and administered;
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(b) the period within which the maturity proceeds paid on Scripless Treasury Bills in such accounts shall be paid to customers or persons entitled thereto;
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(c) the fees that may be charged for maintaining and administering such accounts;
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(d) the regulating supervising or monitoring of direct participants s, dealer direct participants, interdealer brokers or primary dealers.
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(e) the manner means by which Scripless Treasury Bills, or interest is therein, may be purchased, sold, transferred, pledged or encumbered ; and
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(f) the furnishing of information to the Central Bank, the manner, means and periods at which such information shall be furnished to the Central Bank.
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9.
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(1) The Central Bank, may in writing appoint any primary dealer or other person to be a direct participant who shall be entitled to maintain accounts in respect of Scripless Treasury Bills as are specified in subsection (2).
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(2) A direct participant shall maintain in a depository referred to in the Monetary Law Act, Securities Accounts to hold Scripless Treasury Bills and other scripless securities to which such direct participant has title and to record the interest of such direct participant in Scripless Treasury Bills and other Scripless securities in accordance with the rules and regulations made under the Monetary Law Act.
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(3) The Central Bank shall pay to a direct participant the maturity proceeds on Scripless Treasury Bills in respect of which such direct participant is recorded as owner in accounts maintained by a direct participant under subsection (2) on the day such maturity proceeds become payable.
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(4) The Central Bank may inspect and take copies of any books, records or accounts maintained by a direct participant relating to or affecting any Scripless Treasury Bills held in its own account or in the case of a dealer direct participant, with respect to its own account as well as those held in customers’ accounts. The direct participant and its officers, directors, employees, servants and agents shall furnish to the Central Bank all such books, records correspondence or any other document 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 in respect of issue of Scripless Treasury Bills. The provisions of this section shall apply to any book, record, accounts and correspondence maintained in an electronic form.
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(5) In the event of the Government incurring any liability or making payment of any maturity proceeds with respect to a Scripless Treasury Bill and where such liability arises or such payment is made in consequence or by reason of any default of a direct participant or a dealer direct participant, such participant shall be liable on demand by the Government, to indemnify the Government with respect to such liability or payment.
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(6) For the purpose of this section ”default” includes-
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(a) any negligence or failure on the pan of a direct participant or a dealer direct participant in carrying out of any function or the discharging of any duty assigned to or imposed on, him ,by this Ordinance or by any other written law in relation to any matter dealt with by this Ordinance; and
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(b) any act or omission on the part of direct participant or dealer direct participant which constitutes an offence under this Ordinance or any other written law in relation to any matter dealt with by this Ordinance
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(i) whether or not there has been any prosecution in respect of such offence; or
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(ii) whether such act or omission was by the direct participant or the dealer direct participant or by any director, officer, employee or agent of such direct participant or dealer direct participant.
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Dealers direct participant.
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10.
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(1) The Central Bank may appoint in writing any direct participant to be a dealer direct participant
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(2) A dealer direct participant shall, in addition to maintaining accounts required to be maintained under subsection (2) of section 9, maintain in a depositary referred to in the Monetary Law Act, accounts in respect of each of its customers to hold Scripless Treasury Bills and other scripless securities to which each such customer has title and to record the interests of each such customer in Scripless Treasury Bills and other scripless securities in accordance with the regulations and rules made under the Monetary Law Act.
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(3) The Central Bank shall pay to a dealer direct participant, in addition to the payments referred to in subsection (3) of section 9, the maturity proceeds on Scripless Treasury Bills in respect of which a customer or such dealer direct participant is recorded as owner in accounts maintained by such dealer direct participant under subsection (2), on the day such maturity proceeds become payable.
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(4) No person other than a dealer direct participant may transact in Scripless Treasury Bills on behalf of any other person. Any person other than a direct participant and the Central Bank desiring either to make a transfer or to take a transfer of Scripless Treasury Bills shall do so only through a dealer direct participant.
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(5) A dealer direct participant shall maintain books and records to enable it to perform and discharge its duties and functions under this Ordinance and to discharge its obligations to its customers and shall comply with directions, if any, issued by the Central Bank for such purpose.
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(6) Upon receipt by a dealer direct participant of any amount by way of payment from the Central Bank in terms of subsection (3) in respect of Scripless Treasury Bills held in a customer account, the dealer direct participant shall pay such amount, within the time specified in any direction issued by the Central Bank, to the customer or to any other party entitled to such payment by law or in terms of a written agreement to which the dealer direct participant and the customer are party.
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(7) If a dealer direct participant is unable, for any reason to effect payment to a customer or to a party entitled to payment in terms of subsection (6), within the time specified in any directions issued by the Central Bank, the dealer direct participant shall within such period as may be specified in such directions, transfer the sum remaining unpaid to a prescribed account of the Central Bank and shall provide the Central Bank with such information as may be required by the Central Bank with regard to the payment and the customer or other party, as the case may be.
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(8) The sums of money transferred to a prescribed account of the Central Bank in terms of subsection (7) shall be paid to persons entitled thereto and any monies lying unclaimed shall be dealt with or disposed of by the Central Bank in such manner as is prescribed by regulations made for such purpose.
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(9) A dealer direct participant shall, except to the extent required for the proper conduct of its business and administration, maintain confidentiality in respect of accounts maintained for a customer and any matter connected therewith and shall not disclose to any person except to the Central Bank, any information relating to an account of a customer unless authorized to do so in writing by the customer, or except where it is required to do so under any law or by an Order of Court.
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Transfer of Scrip less Treasury Bills.
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11.
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(1) Where a transfer of title to a Scripless Treasury Bill is made by a dealer direct participant from or into an account maintained for a customer under subsection (2) of section 10, or an interest of any customer in a Scripless Treasury Bill is recorded or any amendment or variation is made in respect of any such interest in any Scripless Treasury Bill in such account, such dealer direct participant shall issue to such customer a confirmation in accordance with such directions as may from time to time be issued by the Central Bank,
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(2) The provisions of subsection (1) shall not be construed as derogating from any obligation imposed under the Monetary Law Act on the provider of depository facilities for Scripless Securities, to issue statements or confirmations in respect of accounts maintained in such depositary and in the event of any conflict or inconsistency between a statement or confirmation so issued by the depositary and the statement or confirmation issued under subsection (1), the statement or confirmation issued by the depositary, shall prevail.
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(3) Subject to the provisions of any applicable written law, a dealer direct participant shall be wholly responsible and liable to customers in respect of all transfers taken or made by such customer through such dealer direct participant.
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(4) The confirmation referred to in subsection (1) shall not be capable of being negotiated and shall be used solely as evidence of dealings between such dealer direct participant and the customer in respect of Scripless Treasury Bills to which it relates.
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(5) The Central Bank may permit any notification, confirmation, acknowledgment or receipt required under this section to be issued in a non written form and to be transmitted or delivered by wire, telephone, satellite cable or any other such electronic, magnetic or optical media, as may be specified from time to time, by the Central Bank in that behalf.
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(6) An electronic record of a Scripless Treasury Bill or any notification, confirmation, acknowledgment, receipt or other document or record issued or maintained for the purposes of this Ordinance in an electronic form, shall not be denied legal effect, validity or enforceability solely on the grounds that such Scripless Treasury Bill is maintained in an electronic form or that such notification confirmation, acknowledgment, receipt or other document or record is issued or maintained in electronic form and such notification confirmation, acknowledgment, receipt or other document may be tendered in evidence in proceedings before any court or tribunal in accordance with Part II and Part III of the Evidence (Special Provisions) Act, No. 14 of 1995 or any other law for the time being in force in relation to the tendering of computer evidence before any court or tribunal.
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Power of Central Bank exercised officers & c.
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12. Whenever by any provision of this Ordinance any power, duty or function is by authorized or required to be exercised or performed by the Central Bank, such power, duty or function may be exercised or performed by an officer of the Central Bank or any other person authorized in writing in that behalf by the Monetary Board of the Central Bank.
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13. No suit or prosecution shall lie against the Government, the Monetary Board or any officer or servant of the Central Bank in respect of any payment made, or any act which, in good faith is done, or purported to be done, under this Ordinance, by the Government the Monetary Board or any such officer or servant of the Central Bank.
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14.
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(1) Any person who-
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(a) fails to comply with any provisions of this Ordinance or any regulation, order, or direction given there under ;
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(b) furnishes for the purposes of this Ordinance any information which Is, or any return the contents of which are, to Ms knowledge fate or Incorrect;
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(c) with intent to deceive-
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(i) makes or causes to be made a false entry ; or
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(ii) omits to make, or causes to be omitted, any entry ; or
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(iii) alters, conceals or destroys or causes to be altered, concealed or destroyed any entry,
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in any of the records of the Central Bank, or in any books, records or accounts of any direct participant, or any primary dealer,
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shall be guilty of an offence under this Ordinance.
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(2) Any person guilty of an offence under this Ordinance shall be liable on conviction after summary trial before a Magistrate, to imprisonment for a term not exceeding five years or to a fine not exceeding ten million rupees or where the offence has resulted in monetary loss or monetary gain or a loss or gain which is quantifiable in monetary terms to any person, to a fine equivalent to twice the value of such loss or gain or to both such imprisonment and fine.
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Offences of directors and officers.
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15. Where the person convicted of an offence under this Ordinance is a body corporate, every person who at the time of the commission of the offence was a Director or an officer of the body corporate shall be deemed to be guilty of that offence unless he proves that the offence was committed without his knowledge, or that he exercised all due diligence to avoid the commission of such offence.
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Transactions in Scripless Securities.
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15A. The Scripless Treasury Bills issued under this Ordinance shall be transferred pledged, encumbered, lent, borrowed or otherwise transacted in, as provided by regulations and any transfer, pledge, encumbrance, loan, borrowing or any other transaction effected accordingly shall be valid and effectual notwithstanding any other written law relating to transactions in Treasury Bills issued in the form of written certificates.
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15B.
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(1) The Central Bank may with the consent of Court having regard to the circumstances in which an offence under this Ordinance was committed, compound such offence for a sum of money not exceeding rupees five million or where the offence has resulted in monetary loss or monetary gain or a loss or gain which is quantifiable in monetary terms to any person for a sum of money equivalent to one and a half times the value of such loss or gain.
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(2) The compounding of an offence under this section shall have the effect of an acquittal.
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16.
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(1) The Minister in Charge of the subject of Finance may make regulations for the purpose of giving effect to the provisions of this Ordinance.
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(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: –
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(a) the terms of issue of Treasury Bills, Under this Ordinance
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(b) the mode and manner in which Treasury Bills, may be issued ;
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(c) the appointment of primary dealers and the conditions to be observed by, and the privileges entitled to, and the duties to be performed, by the primary dealers ;
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(d) the appointment of direct participants, dealer direct participants and interdealer brokers, and their regulation, supervisions or monitoring;
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(e) the issue, holding and administration of Scripless Treasury Bills under this Ordinance;
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(f) the manner in which Treasury Bills including Scripless Treasury Bills, or interests therein, may be purchased, sold, transferred, pledged or encumbered;
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(g) the procedures and conditions applicable to the primary issue of, and subsequent transfers and other transactions relating to Treasury Bills.
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17. In this Ordinance unless the context otherwise require –
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“aggregate customers” account means the single account maintained by a dealer direct participant with the Central Bank in accordance with subsection (2) of section 10
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“Central Bank” means the central Bank of Sri Lanka established by section 5 of the Monetary Law Act;
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“customer” in relation to a dealer direct participant means any person who purchases or sells or otherwise acquires or disposes of Scripless treasury Bills or an interest therein through such dealer direct participant or who negotiates with such dealer direct participant for the possible acquisition or disposition of such bill or interest and shall include where the context so permits a legal representative of such customer or of the estate of such customer;
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“dealer direct participant” means any direct participant appointed by the central Bank in writing under subsection (1) of section 10 to be a dealer direct participant;
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” designated non-dealer bidder” means any investor institution other than a primary dealer that is specifically designated in writing by the Central Bank as eligible to’ bid directly at Central Bank auctions of Treasury Bills;
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“direct participant” means any primary dealer or other person, appointed by the Central. Bank in writing under subsection (1) of section 9 to be a direct participant;
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” interdealer broker” means any person or firm, appointed to be an interdealer broker by the Central Bank pursuant to subsection (1) (e) of section 8 ;
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“Monetary Law Act” means the Monetary Law Act, (Chapter 422) as amended from time to time and shall include any enactment, that replaces such Act “in relation to the matters contained therein and where any section is specifically referred to in this Ordinance the reference shall be taken to include corresponding sections in the subsequent enactment;
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“securities account” shall have the same meaning as in the Monetary Law Act (Chapter 422).
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“own Scripless Treasury Bill account” , with reference to a direct participant moans the single account maintained by a direct participant with the Central Bank, in accordance with subsection (2) of section 9, to hold Scripless Treasury Bills in his own account.
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“pledge” includes a pledge of, or any security Interest in, Scripless Treasury “Ellis & s collateral for loans or advances, or to secure deposits Of public moneys or the performance of an obligation ;
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” primary dealer ” means any commercial bank, company, or other person appointed by the Monetary Board as a primary dealer for the purpose of dealing with the Central Bank as a counterparty in the primary and secondary markets for Treasury Bills;
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“records of the Central Bank” includes records maintained on behalf of the Central Bank by any person appointed for that purpose by the Monetary Board and includes records kept, stored or transmitted in the form of computer film disks, tapes or other magnetic, electronic or optical media;
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” Scripless Treasury Bill” means a treasury bill issued in the form of entries in the records of the Central Bank and not embodied in or represented by, a. certificate or other physical instrument;
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“Treasury Bill” means a Treasury Bill issued under this Ordinance and includes a Scripless Treasury Bill.
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