 |
Table of Contents
|
Introduction - Short Title and CommencementPart IDefinitionsPart IILicenses
Part IIIAudit and Periodic Filings
Part IVOther Provisions
The Dominion of MelchizedekBanking Act of 1991As Drawn and Approved by theHouse of Elders of theDominion of MelchizedekThe Banking Act of 1991 - The Dominion of MelchizedekShort Title and CommencementThe Banking Act of 1991 of the Dominion of Melchizedek, shall be more commonly known as the "Banking Act of 1991". Further, the Banking Act of 1991 will commence and shall come into force 90 days after ratification by the House of Elders of the Dominion of Melchizedek. The Banking Act of 1991 came into force and effect on January 1, 1992, and was amended in 1994. (see amendment below) Part IDefinitionsIn this Act, unless the context otherwise requires, the following terms shall have the meanings so indicated and set forth below. "Bank" - includes commercial, merchant, trading and savings banks; "Banking Business" - means the business of accepting deposits of money withdrawable or repayable on demand or after a fixed period or after notice and the employment of those deposits in whole or in part by lending or any other means for the account and at the risk of the person accepting such deposits; "Commercial and Trading Bank" - means any corporation, foreign corporation, statutory corporation, body corporate, authority or department of the public service which carries on banking business in the Dominion of Melchizedek, "DOM", and a substantial part of whose business in the DOM consists of the payment of bills of exchange drawn on it by persons having accounts in credit with it or by persons who have made arrangements to have their accounts with it debited with the amounts of bills of exchange drawn by them on it, but a corporation, foreign corporation, statutory corporation, body corporate, authority or department of the public service which makes payments for goods or services supplied to it by honoring bills of exchange drawn on it shall not for that reason only be taken to be a commercial and trading bank; the business of a commercial and trading bank shall not include the business of accepting deposits of money in amounts of less than five thousand dollars to be held, otherwise than for fixed terms, for the persons making the deposits with interest payable thereon; "Financial Institutions" - means any corporation, foreign corporation, statutory corporation, body corporate, authority or department of the public service which carries on banking business in the DOM, but which is not a commercial and trading bank or savings bank. "Savings Bank" - means any corporation, foreign corporation, statutory corporation, body corporate, authority or department of the public service which carries on banking business in the DOM and whose business consists of accepting deposits of moneys to be held, otherwise than for fixed terms, for the persons making the deposits, accumulating the interest payable on the deposits, so far as not withdrawn and returning the deposits and the interest payable thereon to the depositor, in the case of depositors who have died, to their personal representatives or the beneficiaries of their estates; Part IILicensesAuthority to Grant Licenses2.01 The Minister of Finance has the sole right to grant Bank License/s, regardless whether domestic or international. Documents to be Provided with Application2.02 The following list comprises supporting documents that must accompany applications for Banking License/s.
Denial of License and/or Revocation Thereof2.03 The Minister of Finance may deny a license application or revoke any such license only with cause. Licensee may request a judicial hearing in the High Court regarding this matter, should Licensee believe that any such action was unwarranted. The High Court shall have the final decision in overturning any revocation or denial action by the Minister of Finance. Restriction of Name "Bank" etc...2.04 The use of the word "Bank", "Thrift", "Savings & Loan", "Banc", "Banque", or any derivation or abbreviation thereof, is prohibited without authority from the Minister of Finance. Such authority is automatically extended with the extension of a Bank License. Authority to Change/Move Locations2.05 Any Bank may after 30 day prior notice being given to the Minister of Finance, change or move its place/s of business. A Bank may close a location upon 14 day prior notice. A Bank may open a new location provided the Minister of Finance is given notice of such location within 14 days of the establishment thereof. Foreign Exchange Transactions2.06 Banks may deal and participate in Foreign Exchange Transactions. Restriction on Change of Control of Bank2.07 Changes in Control of a licensed Bank, whether it be by change in stockholder/s or by change in directorship, is subject to prior approval of the Minister of Finance. Diversification of Bank/s2.08 Banks desiring to diversify into industries other than Banking related businesses, are required to seek prior approval of the Minister of Finance. Such authority shall not be unreasonably withheld. Investment in Subsidiaries2.09 Banks may invest up to 85% of their capital in the equity securities of subsidiary corporations. Unlicensed Transactions2.10 Any corporation or party doing business as a Bank without a license or authority is subject to both civil and criminal actions and penalties at the discretion of the Minister of Finance. Minimum Capital2.11 Banks are required to maintain an equity, exclusive of redeemable preferred stock due in less than five years, equal to at minimum, 8% of deposits including both time and demand deposits. Banks are also required to maintain an overall equity of at minimum, three percent, (3%) of gross capital/ assets. Minimum Liquidity2.12 Banks are required to maintain liquid Asset/Demand deposit/liability ratio of 15% minimum. Liquid Assets for this purpose shall be defined as readily marketable investments inclusive of commercial paper, certificates of deposits, bankers acceptances, cash, investment grade debt securities and other investments due in less than 90 days. Restriction on Dividends2.13 Banks are prohibited from declaring or paying any dividends, whether on preferred or common stock, if the result of which would impair the Banks capital. Affiliated Transactions2.14 Banks must obtain prior Minister of Finance approval for any transactions with affiliates which individually would exceed 45% of Assets. Circumvention by means of technicality is prohibited. Part IIIAudit and Periodic FilingsEligible Auditors and Examination3.01 Banks are to employ only auditors approved by the Minister of Finance, for public and governmental filings. Further, the Minister of Finance is empowered to audit the accounts, books, and records of any Bank, with or without prior notice being given. Requirement of Audited Annual Reports3.02 Banks are to file Audited Annual Financial Statements, prepared in accordance with generally accepted accounting principles, (International Accounting Principles as drawn and prescribed by the American Institute of Certified Public Accountants.) Semi-Annual Reports3.03 Banks are required to file with the Minister of Finance, Semi-Annual unaudited Financial Statements, prepared in accordance with generally accepted accounting principles. Filing Dates of Reports3.04 Annual Reports and Semi-Annual Reports required to be filed by Banks with the Minister of Finance are required to be so filed within 120 days of fiscal year end and within 90 days of the end of the Banks Semi-Annual period. Production of Documents3.05 The Minister of Finance may require production of any documentation related to the Banks' operations or otherwise. Part IV.Other ProvisionsUnsuitable Management4.01 The Minister of Finance may compel the resignation of any officer or director of a Bank, upon presentation of cause, only in the protection of depositors. Significant Shareholders'
prescribed form/s within 45 days thereof, to the Minister of Finance. In the event that such shares are held in the name of a Nominee, the ultimate holder need not be disclosed should such Nominee be a licensed Attorney/Solicitor representing such person. Regulatory Approval of Director Appointment/s4.03 The Minister of Finance requires the prior approval of the appointment of new directors of any existing Bank. Such approval may not be unreasonably withheld. Execution of Filings4.04 All filings with the Minister of Finance must be signed by the secretary, treasurer, and President of the respective Bank and must be prepared in the English Language. Secrecy and Privacy4.05 Pursuant to constitutional law and rights thereunder, Banks are prohibited from extending or providing in any manner, disclosures of information regarding any client or such clients accounts or business affairs, unless prior approval of and from such client is given to the Bank for the specific purpose. Violation hereof is subject to criminal prosecution. Business Hours of Bank/s4.06 The Minister of Finance only requires a Bank to be open for Business One day, (12 Hours), during any single 10 day period. The Minister of Finance requires that all Bank/s publish their respective hours for which they are open to conduct business. This publication is to be made available to all depositors and to all other interested parties. All Banks are required to file a copy of this publication with the Minister of Finance. Extended Holiday4.07 Banks may close for extended holiday beyond 10 days, upon 10 day prior written notice having been given to the Minister of Finance. Prosecution of Violations Hereunder4.08 The Minister of Finance may prosecute violations hereof in any court of law in the Dominion of Melchizedek. Amendment and Alteration of These Statutes4.09 The Minister of Finance may amend or alter these statutes only upon approval of the House of Elders. Voluntary Liquidation4.10 Banks may voluntarily liquidate upon 30 day prior notice to the Minister of Finance. Such Bank will be required to file dissolution documents on prescribed forms or in prescribed format, and to file final financial statements. Regulatory Seizure of Operations and Assets4.11 Minister of Finance may seize or take possession of any licensed Bank if it violates the statutes as promulgated hereunder flagrantly or violated minimum capital requirements and failed to cure such within a reasonable period of time. Mandatory Liquidation4.12 The Minister of Finance may require a Bank to liquidate on a finding of due cause meriting the action. Escheatment of Abandoned Property4.13 All abandoned property, asset bearing accounts, dormant for more than five years, securities with no current address for holder and any other "Lost" or "Abandoned" assets is/are to be transferred to the Minister of Finance for disposition. Other Matters4.14 This Act is drawn to supplement the Corporation Ordinance of the Dominion of Melchizedek. Any conflict is in favor of this Act. Application of These Statutes4.15 All Banks having been previously licensed by the Minister of Finance or its predecessor agency, shall be subject to the provisions of this Act, 120 days after implementation. Only those Banks whose original Charters and Licenses granted them exclusive authority and rights to "Grandfathering" under future legislation shall be entitled to such privilege, unless the Minister of Finance, at his sole discretion, determines otherwise on a case by case basis. Authority Hereof4.16 Only licensed Banks are subject to these statutes. Unlicensed Banks and corporations deemed to be conducting business which would otherwise be subject hereunder if so licensed, shall be deemed subject to these statutes. Public or Privately Held4.17 The Capital Stock of Banks may be Publicly or Privately Held (owned). For this purpose, Publicly Held is defined as a Bank having more than 50 shareholders of its capital stock. Depositor's Guaranty Fund4.18 The Minister of Finance may implement a program to insure depositors' monies. Banks may voluntarily apply for such insurance/guarantee. Such insurance is not required or compulsory. Application of the Securities Act of 19914.19 Banks are required to comply with the Securities Act of the Dominion of Melchizedek of 1991. Any conflict therewith shall be in favor of this Act. Minimum Capital Requirement4.20 Banks must possess minimum shareholders' capital/equity of $25,000 USD, prior to conducting any business. Further, a given Bank's investment in non-tangible assets may not exceed 15% of total capital. Appeal of Decisions to High Court4.21 Banks may appeal any Minister of Finance decision to the High Court of the Dominion of Melchizedek for review. Client's Statements4.22 Banks are required to provide account holders the option of receiving monthly account statements. Securities Underwritings4.23 Banks may underwrite securities offerings. Any such Underwriting must not exceed 200% of the respective institutions most recently reported Shareholders' Equity Capital, subject to Section 4.24 below. Securities Dealings4.24 Banks who possess Shareholders' Equity Capital in excess of $1,000,000 USD may deal in securities Trust Operations4.25 Banks may conduct trust services, provided such services are conducted in accordance with applicable statutes. Investment Advisory Services4.26 Banks may provide Investment Advisory Services.Foreign Offices/Branches4.27 Banks may open foreign representative offices in addition to foreign branches. The Minister of Finance is to be notified within 30 days of the establishment of any such foreign facility. Such notice should include the address, name of the manager, synopsis of intended business at such location. Administrative Services of Bank4.28 Banks may conduct administrative services and operations elsewhere outside of the Dominion of Melchizedek. Notification of Wrong Doing4.29 Banks must notify the Minister of Finance of any violation or conviction of wrong doing in any jurisdiction. Domestic and International Banking4.30 Banks licensed for domestic operations are prohibited from conducting international business without first obtaining a license therefor. International Banking4.31 Banks licensed for international Banking may conduct both domestic and international banking. Banks Business Authority4.32 Banks may make and do the following:
Restriction of Business Affairs4.33 Banks may not conduct any business which may from time to time be prohibited by the Minister of Finance. Banks, Definition Thereof and Application Hereof4.34 "Banks" include all Commercial Banks, Merchant Banks, Private Banks, and other common forms of "Banks". Preparation Hereof4.35 This Act has been drawn and prepared by order of the House of Elders. Fees - Collection Thereof4.36 The Minister of Finance shall possess the authority to charge and collect fees for
the purpose of granting licenses hereunder in addition to charging other fees necessary to
fund the administration hereof. The Minister shall have the authority to set fee rates and
to prepare such fee schedules. 1994 AMENDMENT TO BANKING ACT OF 1991 (Became effective March 15, 1995) Part I Definitions Class A banks shall be defined as banks having international and retail banking powers. Class B banks shall be defined as banks having limited and offshore banking powers. 1.01 Class A Banks Class A Banks incorporated after December 31, 1991 shall be required to maintain a minimum paid in capital of $5,000,000 USD or its equivalent in other currencies. Part II 2.01 Class B Banks Any bank that is licensed by the Minister of Finance as a Class B bank shall be prohibited from taking deposits from Melchizedekians and may not conduct its business within the Dominion of Melchizedek. 2.02 Class B conversion to Class A Any Class B bank may apply for a Class A license upon meeting the requirements of the Banking Act of 1991, including the $5,000,000 paid in capital requirement of this Amendment after first paying an additional licensing fee of $10,000 USD. Class B bank application for Class A license will be treated as a priority with a maximum of 30 day approval or denial period. 2.03 Class B exemptions Class B banks shall otherwise be exempt from the Banking Act of 1991. 2.04 Class B minimum capital Class B banks shall maintain a minimum paid in capital of $25,000 USD within 90 days
after the commencement of business. The $25,000 shall be deposited with the Central
Monetary Reserve of Melchizedek or a Class A bank approved by the Minister of Finance. |
