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Financial Institutions (Amendment) Act 1999

SOLOMON ISLANDS

THE FINANCIAL INSTITUTIONS (AMENDMENT) ACT 1999

(NO. 11 OF 1999)

Passed by the National Parliament this thirtieth day of November 1999.

Assented to in Her Majesty's name and on Her Majesty's behalf this tenth day of December 1999.

Date of commencement: date of publication in the Gazette.

AN ACT TO Amend the Financial Institutions Act 1998.

ENACTED by the National Parliament of Solomon Islands.

ARRANGEMENT OF SECTIONS

SECTION:

1. SHORT TITLE
2. AMENDMENT OF SECTION 2 OF ACT NO. 3 OF 1998
3. AMENDMENT OF SECTION 3
4. AMENDMENT OF SECTION 5
5. AMENDMENT OF SECTION 9
6. AMENDMENT OF SECTION 16
7. AMENDMENT OF SECTION 18
8. AMENDMENT OF SECTION 24
9. AMENDMENT OF SECTION 27
10. AMENDMENT OF SCHEDULE.

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Short title.

1. This Act may be cited as the Financial Institutions (Amendment) Act 1999.

Amendment of section 2 Act No. 3 of 1998.

2. Section 2 of the Financial Institutions Act 1998 (hereinafter referred to as the "principal Act") is hereby amended in the following respects –

(a) in subsection (1) –

(i) in paragraph (b) of the definition of "banking business", by inserting the words "may additionally be authorised to engage in by the Central Bank" after the words "paragraph (a),";

(ii) by deleting the words "EDP service" occurring immediately after the definition of "director", and substituting therefor the words "EDP Servicer";

(iii) by inserting immediately after the definition of "officer", the following new definition –

"pyramid selling scheme" means a scheme which constitutes primarily an opportunity for participants to sell an investment opportunity to other participants in the scheme; and which is or is likely to be unfair to many of the participants in the scheme in that -

(a) the financial rewards of many of those participants are dependent on the recruitment of additional participants (whether or not at successively lower levels); and

(b) the number of additional participants that must be recruited to produce reasonable financial rewards to participants in the scheme is not attainable or is not likely to be attainable, by many of the participants in the scheme;’; and

(b) in subsection (2) by deleting the words "such advertisement." and substituting therefor the words "such advertisement; or advertises, promotes or operates a pyramid selling scheme.".

Amendment of section 3.

3. Section 3 of the principal Act is hereby amended in the following respects –

(a) by deleting subsection (1) and substituting therefor the following new subsection –

"(1) No person shall carry on banking business in Solomon Islands unless such person is a financial institution licensed under this Act."; and

(b) in subsection (7) by inserting the words "or establishing a representative office in Solomon Islands pursuant to section 24(3)" after the words "section 5".

Amendment of section 5.

4. Section 5 of the principal Act is hereby amended in the following respects –

(a) in subsection (1) by deleting the word "company" and substituting therefor the word "person";

(b) by inserting immediately after subsection ('07 the following new subsection. –

"(1A) No person other than a body corporate shall be issued with a license to carry on banking business pursuant to this Act.";

(c) in subsection (3) by deleting the word "company" and substituting therefor the word "person";

(d) by inserting immediately after subsection (7), the following new subsection –

"(7A) A license shall not be issued pursuant to paragraph (a) of sub-section (7) unless the Central Bank is satisfied in respect of the matters set out in subsection (5) and, where the applicant is a foreign financial institution, the matters set out in subsection (6)"; and

(e) in subsection (10) by adding, the words "and as prescribed by regulations" after the word "approve".

Amendment of section 9.

5. Paragraph (v) of subsection (8)(a) of section 9 of Amendment of the principal Act is hereby amended by deleting the words "the financial institution is unable" and substituting therefor the words "he is unable".

Amendment of section 16.

6. Paragraph (b) of subsection (1) of section 16 of Amendment of the principal Act is hereby amended by deleting the word "company" and substituting therefor the word "comply".

Amendment of section 18.

7. The proviso to subsection (4) of section 18 of the principal Act is hereby amended by deleting the word "revised" and substituting therefor the word "revived".

Amendment of section 24.

8. Subsection (2) of section 24 of the principal Act is hereby amended by inserting the words ‘with the word "bank" (or its derivative) in its title' after the words "Solomon Islands".

Amendment of section 27.

9. Section 27 of the principal Act is hereby amended by inserting the words "on conviction" after the word "liable".

Amendment of schedule.

10. The Schedule to the principal Act is hereby amended in the following respects –

(a) by deleting the words "Australian Guarantee Corporation (SI) Limited" and substituting therefor the words "A.G.C. Finance (SI) Limited"; and

(b) by addling the word "Limited" after the words "National Bank of Solomon Islands".

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