5. Amendment of section 21D of the principal enactment

Official English translation. Where it differs from the Sinhala or Tamil text, the Act itself says which text prevails.

Section 21D of the principal enactment is hereby repealed and the following section substituted therefor :—

21D. (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 Bonds as specified in subsection (2).

(2)

A direct participant shall maintain in a depository referred to in the Monetary Law Act,

Securities Accounts to hold Scripless Treasury

Bonds and other scripless securities to which such direct participant has title and to record

“Direct participants.

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the interests of such direct participant in scripless treasury bonds and other scripless securities in accordance with such rules and regulations made under the Monetary Law Act.

(3)

The Central Bank shall pay to a direct participant the sum due as the principal, interest and redemption proceeds, if any, on Scripless

Treasury Bonds in respect of which such direct participant is recorded as owner in accounts maintained by such direct participant under subsection (2), on the day the sum due as principal, interest, or redemption proceeds, if any, become payable.

(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 Bonds, 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 or dealer direct participant and its officers, directors, employees, servants and agents shall furnish to the Central Bank, all such books, records, correspondence or any other documents 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 Scripless Treasury Bonds. The provisions of this subsection shall apply to any books, records, accounts and correspondence maintained in an electronic form.

(5)

In the event of the Government incurring any liability or making payment of any sum due as principal, interest or redemption

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proceeds with regard to Scripless Treasury

Bonds, 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.

For the purpose of this subsection “default”

includes—

(a)

any negligance or failure on the part of a direct participant or a dealer direct participant in the carrying out of any function, or the discharging of any duty, assigned to, or imposed on, him by this Ordinance or by any other law in relation to any matter dealt with by this Ordinance ; and

(b)

any act or omission on the part of a 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 :—

(i)

whether or not there has been any prosecution in respect of such offence ; or

(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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Read on from s 6