LOCAL LOANS (REGISTERED STOCK AND SECURITIES) ACT

This Act may be cited as the Local Loans (Registered Stock and Securities) Act.

In this Act, unless the context otherwise requires-
"bearer bond" means a bearer bond issued under the provisions of this Act;
"Central Bank" means the Central Bank of Nigeria;
"register" means the register of stock kept by the Central Bank;
[1976 No. 32. 1979 No. 63.]
"Minister" means the Minister for the time being charged with responsibility for matters relating to finance;
"registered stock" or "stock" means Nigeria stock issued under the provisions of this Act;
"security" means a bearer bond;
"stockholder" means a person holding registered stock who is entered as the owner thereof in the register.

(1) Whenever by any Act, whether enacted before or after the date on which this Act comes into operation, authority has been or is hereafter given to raise any sum of money by way of loan for any purpose mentioned in that Act, or whenever it is necessary to raise any sum of money for the purpose of repaying any loan raised by the Government under this or any other Act the Minister may, from time to time, raise such sum or any part thereof under the provisions of this Act in any one or more of the following modes-
(a) by the creation and issue of registered stock;
(b) by the issue of securities in the form of Government promissory notes;
(c) by the issue of securities in the form of bearer bonds.
(2) Each issue of registered stock or securities under this Act 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 authorised by any other Act to be raised by way of a loan.

The principal moneys and interest represented or secured by any registered stock or securities issued under this Act are hereby charged upon and shall be payable out of the general revenue and assets of Nigeria.

(1) The Minister shall, in respect of each loan to be raised under this Act, specify by directions published in the Federal 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 on the loan shall be payable;
(e) the rate of which a half-yearly appropriation out of the general revenue and assets of Nigeria shall be made as a contribution to the sinking fund established for the purpose of redeeming that loan and the date from which such contributions shall commence;
(f) the date of redemption of the registered stock or securities to be issued for the purpose of raising that loan;
(g) whether the interest payable on any registered stock, Government promissory notes or bearer bonds issued under the authority of this Act shall be exempt from all or any of the taxes and duties payable under any other enactment in force in Nigeria.
(2) In the case of a loan appropriated and applied or to be appropriated and applied for lending to the Government of a State such directions shall not require the Government of the Federation to establish a sinking fund but shall specify-
(a)
that the terms and conditions for such lending have been approved in accordance with paragraph (b) of section 3 of the Loan (Internal Borrowing) Act; and
[1958 No. 18.]
(b) the rate at which a half-yearly appropriation out of the general revenue and assets of each State concerned is required.
(3) 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.
(4) Where the Minister 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 subsection (1) of this section, 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 section 5 of this Act of the directions of the Minister in respect of any loan to be raised under this Act, the Central Bank may, subject to the provisions of such directions and to such further directions as the Minister 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.

The Central Bank shall keep a register in respect of each issue of registered stock under this Act 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 Act are required to be entered in the register.

The Government of Nigeria 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 Act, at the rate and on the dates directed by the Minister under section 5 of this Act or in pursuance of an option to redeem such stock reserved in such directions.

For the purposes of this Act, 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 stock holder 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 Central Bank a stock certificate and no stock holder, other than the first stock holder of any stock shall be entitled to obtain a stock certificate save upon payment of the prescribed fee.

(1) For the purposes of this Act, the title of any stock holder to any registered stock shall not be deemed to be transferred to any other person save upon the execution of an approved instrument of transfer and upon the registration of the transferee as the stock holder under section 13 of this Act.
(2) Interest which has fallen due in respect of any registered stock but which has not been paid to the stock holder 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.

(1) No person shall be registered as the transferee of any registered stock except upon surrender to the Central Bank of the stock certificate and the instrument of transfer relating to that stock and upon payment of the prescribed fee.
(2) The Central Bank may register a lien on any registered stock in accordance with such provisions as are prescribed by regulation and upon payment of the prescribed fee.
(3) With effect from the 1st day of May, 1949, any such lien which is registered under the Act shall have priority over any lien not so registered.

The register shall be closed for a period of 21 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.

(1) The entries in the register kept under the provisions of this Act shall be conclusive evidence of the facts, matters, particulars and transactions to which those entries relate.
(2)
Notwithstanding the provisions of any other enactment, a copy of any entry in the register certified under the hand of the director of domestic operations of the Central Bank to be a true copy of the original entry shall be receivable in evidence in any judicial proceeding unless a judge shall otherwise direct.
[1976 No. 32.1979 No. 63.]

(1)
Every bearer bond shall be signed by the director of domestic operations of the Central Bank for and on behalf of the Government of Nigeria and shall, when issued, bind the Government of Nigeria to pay the principal sum and the interest thereon in accordance with the provisions of this Act, at the rate and on the dates specified in the directions by the Minister under section 5 of this Act or in pursuance of an option to redeem such bond reserved in such directions.
[1976 No. 32. 1979 No.3.]
(2) Bearer bonds shall be issued in such denominations as the Minister may direct.

(1) There shall be attached to every bearer bond coupons for the payment of interest which falls due thereunder:
Provided that the number of coupons attached to a bearer bond on the date of its issue to any person may cover a period shorter than that of the currency of the bond if, in the opinion of the Central Bank, it is inconvenient or inexpedient to attach to the bond coupons sufficient in number to cover the entirety of the period of the currency of the bond.
(2) If the number of coupons attached to any bearer bond on the date of its issue to any person is insufficient to cover all payments of interest due on the bond after that date, the holder of that bond shall be entitled to a renewal thereof at the prescribed time and in the prescribed manner and circumstances.

So long as any interest is payable under this Act in respect of any stock or securities, the Minister 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 Nigeria a sum sufficient to meet all interest payable on that date and shall authorise the Central Bank 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 under section 5 of this Act.
(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.

All payments of interest and all payments of the principal amount due on any registered stock or securities shall be made at the Central Bank in Lagos:
[1976 No. 32.]
Provided that the Central Bank or any person authorised by the Central Bank in that behalf may pay any such interest or principal amount at any other place, whether within or without Nigeria, in pursuance of any arrangement which the Central Bank may make for that purpose.

After the date specified in the directions of the Minister under section 5 of this Act as the date from which contributions to the sinking fund for any loan shall commence, the Minister shall, 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, appropriate out of the general revenue and assets of Nigeria 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.

A separate sinking fund shall be established for each loan raised under this Act.

(1) All moneys appropriated under section 22 of this Act as contributions to the sinking fund established for any loan shall be paid to the Central Bank and may then be invested in such stock or securities or in such other investments or classes of investments as may be approved by the Minister.
(2) The Central Bank may from time to time, with the approval of the Minister, vary any investment made under subsection (1) of this section or may realise and reinvest any moneys invested under that subsection.
(3) The dividends, interest, bonus and other profits of any investment of any part of any sinking fund shall be invested by the Central Bank so as to form part of that sinking funds in like manner as moneys appropriated under section 22 of this Act as contributions to that sinking fund.

Notwithstanding anything to the contrary contained in this Act, if at any time the Central Bank is satisfied that the sinking fund of any loan raised under the provisions of this Act 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, it shall inform the Minister accordingly, and the Minister is hereby authorised in such event to suspend further payments of half-yearly contributions to that sinking fund:
[1976 No. 32.]
Provided, however, that the contributions to that sinking fund shall be recommenced if the Central Bank at any time thereafter informs the Minister that it 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.

In the event of the sinking fund established for any loan under this Act being found, at the time fixed for the repayment of that loan, to be insufficient for such redemption, the deficiency shall be made good out of the general revenue and assets of Nigeria.

The Minister 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 Nigeria under the provisions of this or any other Act to be convertible into registered stock or other securities to be issued under the provisions of this Act;
(b) he may authorise the creation and issue under this Act 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) of this section;
(c) he may authorise the creation and issue under this Act 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 section;
(d) he may declare that all privileges, exemptions and immunities attaching by virtue of any enactment in force in Nigeria to any stock or securities shall attach to any new registered stock or securities issued under this Act in conversion of such earlier stock or securities.

Any conversion authorised under section 28 of this Act 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.

(1) The Central Bank may issue duplicate stock certificates and duplicate securities in such circumstances as may be prescribed.
(2) The Central Bank may issue renewals of stock certificates and securities in such circumstances as may be prescribed.

The Central Bank 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 Act, the director of domestic operations of the Central Bank 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;
(b) the nominal value of the stock or securities given by the Registrar 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 Central Bank 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
(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 Central Bank under this Act 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 Central Bank may require the applicant, as a condition precedent to the grant of the application, to execute a bond with or without sureties 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 bearer bond of the amount expressed therein on or after the date when it becomes due or on the renewal of a bearer bond under section 30 of this Act, or on the exchange of a bearer bond under section 32 of this Act, or on the consolidation or subdivision of a bearer bond under section 33 of this Act, the Government shall be discharged in the same way and to the same extent as if such bearer bond were payable to bearer.
[1976 No. 32.]

Save as otherwise provided in this Act 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 section 30 of this Act, 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 section 30 of this Act, or in respect of stock or securities in place of which new stock or securities are issued upon an exchange under section 32 of this Act, or upon a consolidation or subdivision under section 33 of this Act, 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.

(1) If within six months of the death of a person who was entitled to registered stock, the nominal or face value of which does not in the aggregate exceed five hundred naira, probate of the will or letters of administration of the estate of such person is not produced to the director of domestic operations of the Central Bank, he may, after such inquiry as he may deem necessary, determine who is the person entitled to such stock or to administer the estate of the deceased and may-
[1976 No. 32. 1979 No. 63.]
(a) where any such stock relates to a loan due for repayment, authorise the registration of the name of such person in substitution for the name of the deceased in the register of stock and the payment to such person of the amount due in respect of that stock;
(b) where any such stock relates to a loan not due for repayment, authorise the registration of the name of such person in substitution for the name of the deceased.
(2) Upon the payment or renewal of any promissory note in accordance with subsection (1) of this section, the Government shall be discharged from all liability in respect of the note so paid or renewed; and any substitution of names made under that subsection shall, for the purposes of any claim against the Government, be deemed to have effected a valid transfer of the stock in respect of which it was made.
(3) Any creditor or claimant against the estate of the deceased may recover his debt or claim out of money paid to any person under subsection (1) of this section and remaining in his hands unadministered in the same manner and to the same extent as if the said person had obtained letters of administration of the estate of the deceased, and nothing in this section shall affect any claim of an executor or administrator or other representative of the deceased against such person other than a claim to recover amounts lawfully paid by him in due course of administration of the estate of the deceased.
(4)
The director of domestic operations of the Central Bank may, for the purposes of an inquiry under this section, exercise all or any of the powers of a commissioner under the Commissions of Inquiry Act as if he were a commissioner appointed thereunder by a commission issued by the Minister.
[Cap. 36 of 1958Edition.]

The signature of the director of domestic operations of the Central Bank may be printed, stamped, engraved, or impressed by any mechanical process on any stock certificate, or bearer bond 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 chief accountant of the Central Bank.
[1976 No. 32. 1979 No. 63.]

Save as otherwise provided in or under this Act, no notice of any trust in respect of any registered stock or securities shall be receivable by the Central Bank or by the Government.

All documents or instruments made or used under the provisions of this Act shall be in such form as may be prescribed and shall be free from stamp duty, anything in any other Act to the contrary notwithstanding.

(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 section shall apply to the Auditor-General for the Federation or to the Deputy Commissioner of Income Tax.

(1) The Minister may make regulations for the purpose of giving effect to the provisions of this Act.
(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 circumstances in which promissory notes must be renewed before further payment of interest thereon may be claimed;
(c) the issue of duplicate stock certificate and duplicate securities;
(d) the renewal of stock certificates and securities;
(e) the manner of payment of interest to joint holders of stock or securities;
(f) the circumstances in which alterations may be made in the register;
(g) the payment of principal or interest and transfer of stock and securities in the case of persons under a legal disability;
(h) the disposal of unclaimed interest;
(i) the conditions subject to which stock or securities may be exchanged, consolidated or subdivided;
(j) to enable holders of registered stock to be described in the register as trustees and either as trustees of any particular trust or as trustees without qualification and for the recognition of powers of attorney granted by holders of stock so described;
(k) the fees to be paid in respect of anything to be issued or done under the provisions of this Act;
(l) all matters required by this Act to be prescribed and all matters incidental to or connected with the matters hereinbefore enumerated.
(3) Nothing in any regulation made hereunder shall, as between any trustees or as between any trustees and beneficiaries under a trust, be deemed to authorise the trustees to act otherwise than in accordance with the rules of law applying to the trust and the terms of the instrument constituting the trust; and neither the Government nor the Central Bank nor any person holding or acquiring any interest in any registered stock shall by reason only of any entry in the register of stock or of anything in any document or instrument relating to registered stock, be affected with notice of any trust of the fiduciary character of any stock holder or of any fiduciary obligation attaching to the holding of any registered stock.

Nothing contained in this Act shall affect the provisions of the General Loan and Stock Act.