Financial Leasing Act, 2013
Act 8 of 2013
- Published on 18 November 2013
- Assented to on 11 November 2013
- Commenced on 18 November 2013
- [This is the version of this document at 31 December 2015.]
Part I – Preliminary
1. Short titleThis Act may be cited as the Financial Leasing Act, 2013.
2. InterpretationIn this Act,—"asset" means an asset which is the subject of a financial lease and include any movable tangible asset but does not include—(a)any improvements made to land other than fixtures or immovable property attached to land which can be removed from the land without substantial destruction to such fixture or immovable property;(b)money, shares, investments, securities, any financial instruments or any other movables whose fee circulation in Seychelles is restricted by law;"administrator", in relation to a financial leasing institution, means any person who is a director or managing director of such institution, or in the case of a branch of a foreign financial leasing institution, the person designated as managing agent pursuant to section 313(1) of the Companies Act;"assigned capital", in relation to a branch of a foreign financial leasing institution, means unimpaired capital assigned to the branch by its head office;"assignment" means the transfer of rights and obligations, including the right to title and ownership of assets under a financial lease to a third party and includes assignment of rights and rent receivables;"bank" and "banking business" have the meaning given to them under the Financial Institutions Act, 2004;"Board" means the Board of the Central Bank;"close relation", in relation to an administrator or a natural person holding a substantial interest in a financial leasing institution, means spouse, parents, children or dependant relatives of such administrator or natural person;"Central Bank" means the Central Bank of Seychelles as established by section 3 of the Central Bank of Seychelles Act, 2004;"Companies Act" means the Companies Act 1972;"control", in relation to a financial leasing institution, means the relationship between the financial leasing institution and any body corporate in which the financial leasing institution—(a)directly, indirectly or acting through one or more persons owns, controls or has the right to vote 20 percent or more of its voting shares or has the right to elect a majority of its directors; or(b)exercises such a controlling influence as the Central Bank may determine;"deposit" has the meaning given to it under section 2 of the Financial Institutions Act, 2004;"director" has the meaning given in section 2(1) of the Companies Act, and in relation to a branch of a foreign financial leasing institution includes the person designated as managing agent pursuant to section 313(1) of the Companies Act;"financial lease" means an agreement between the lessor and the lessee as defined under section 4 ;"financial leasing institution" means an institution licensed or authorised under this Act to conduct financial leasing business;"financial leasing licence" means a licence to conduct financial leasing business granted under this Act;"foreign financial leasing institution" means an overseas company registered under section 310 of the Companies Act which is established under the laws of a country other than Seychelles and issued with a financial leasing licence under this Act;"Governor" means the Governor of the Central Bank of Seychelles appointed under section 6 of the Central Bank of Seychelles Act, 2004;"group of closely-related customers" means—(a)two or more persons who, unless it is shown otherwise, constitute a single risk because one of them, directly or indirectly, has control over the other or others;(b)two or more persons among whom there is no relationship of control as defined in paragraph (a) but who are to be regarded as constituting a single risk because they are so interconnected to the event that if one of them were to experience financial problems the other or all of the others would be likely to encounter repayment difficulties;"lessor" means a person licensed or approved, to conduct financial leasing business and who transfers the right to possession and use of an asset under lease to a lessee;"lessee" means a person who acquires a right to possession and use of an asset under the lease for an agreed period of time in exchange for agreed lease payments;"local financial leasing institution" means a financial leasing institution established under the laws of Seychelles;"Minister" means the Minister for the time being responsible for finance;"net profits" means profits after providing for management charges and taxation;"substantial interest" means holding solely or jointly with another person directly or indirectly, 10 percent or more of the capital or of the voting rights of a company or undertaking or, directly or indirectly, exercising and control influence over the control of the company or undertaking as the Central Bank may determine;"subsidiary" means any body corporate in which another person or group of persons jointly holds(a)directly or indirectly 50 percent or more of the voting shares; or(b)a substantial interest that permits such other person or group of persons to exercise effective control over the management or policies of the subsidiary;"supervisory matters" includes matters relating to money laundering and terrorist financing;"supplier" means a person who supplies an asset for the purpose of a financial lease, and transfers title to the asset to the lessor for delivery to the lessee;"supply agreement" means an agreement entered into by a lessor with a supplier for the supply of an asset by the supplier under a financial lease;"third party" means a person who is not a party to the financial lease in relation to the asset.
3. ApplicationThis Act shall apply to any financial leasing business if the—
Part II – Formation of financial lease
4. Financial lease
5. Form of contract
6. Subject matter of financial leaseThe asset subject to a financial lease may be either existing goods, owned or possessed by the lessor, or goods to be manufactured or acquired by the lessor from a supplier for the purpose of making an agreement with the lessee.
7. Financial lease paymentsThe payment for use of a leased asset in a financial lease may be calculated primarily on the basis of amortisation of the whole or substantial part of the value of the leased asset and a profit therefor for the lessor, and the manner of financial lease payments may be determined or agreed between parties.
8. Irrevocability and independenceWhere a financial lease and supply agreement have been created and the asset subject to the financial lease has been entered into and accepted by the lessee, the lessee’s duties toward the lessor shall become irrevocable.
9. Delivery and acceptance of the asset
10. Freedom of contractUnless otherwise provided in this Act or any other law, the lessor and lessee may derogate from or vary the effect of this law in determining the contents of a financial lease.
Part III – Rights, obligations and duties
11. Rights and obligations of the lessor
12. Duties of the supplier
13. Rights and obligations of lessee
14. Return of assetUpon the expiration of the financial lease or its prior termination under this Act, the lessee shall return the asset to the lessor in such condition as is specified in section 13(2), unless the lessee has accepted to purchase the asset or retain it for a further period. Where the lessee fails to return the asset, the lessor shall have a right to recover possession of the same.
15. Supply agreement
16. Termination or variation of conditions of a supply agreement
17. Non-liability of lessor for loss in relation to the asset
18. Priority of lessor’s claim against third party and insolvency of a lesseeThe title or interest of the lessor or the lessor's assignees in any leased asset under a financial lease shall prevail at all times against claims by a third party including a creditor of the lessee, except as against a purchaser in good faith for value of the asset under a non-registered lease.
19. Third party claims and insolvency
20. Lessee’s trustees in bankruptcy or creditors
21. Transfer or assignment of financial lease
22. Transfer of lessee’s rights in the assetA lessee shall not, except with the written permission of the lessor and subject to any rights of third parties, transfer the right to the possession and use of an asset under a financial lease to any other person.
23. Removal of leased asset from Seychelles without lessor’s permission
24. Priority of liensWhere an asset which is the subject of a financial lease becomes attached to immovable property; and where the lessee under a financial lease has creditors, the creditors of the lessee and the holders of the interest in land to which the asset becomes affixed take the rights subject to the financial lease and cannot attach the lessee's interest.
25. Default by lesseeWhere a lessee fails to comply with certain terms and conditions of the financial lease in such circumstances as would amount to a substantial failure of such lease, the lessor may, subject to the provisions of section 26—
26. Accelerated payment or termination with notice to leave
28. Recovery of payment due under the financial lease
29. Savings of other remediesThe provisions of section 28 shall be in addition to and not in derogation of any other remedy that may be available to a lessor in law, for the recovery of possession of any asset or any money due under a financial lease.
Part IV – Registration of financial lease and leased assets
30. Registration of financial lease
Part V – Licencing
31. Financial leasing licence required
32. Approval to accept deposits
33. Licence application
34. Granting of licence
36. Approval required for banks to engage in financial leasing as part of its banking licence
37. Annual licence fee
38. Licensee to comply with rules, directions, and instruments
39. Approval for branches
40. Restriction on use of words
41. Revocation of licence of approval
42. Power of the Central Bank to prohibit operations of licensee
43. Urgent action
45. Suspension of business on revocation of licence of approval
46. Surrender of licence
47. Revocation and variation of approval for branch business
48. Effect of carrying on financial leasing business without a licence
49. Inspection of financial leasing institutions
Part VI – Prudential requirements
50. Prudential requirements
51. Other dutiesIt shall be the duty of every financial leasing institution to ensure that—
Part VII – Accounts, audit information and inspection
52. Annual balance sheet, etc
54. Audit committee
55. Publication and display of balance sheets, etc
57. Periodic statementsEvery financial leasing institution shall submit periodic statements to the Central Bank in such form as the Central Bank may determine.
58. Disclosure requirementsFinancial leasing institutions shall regularly notify its customers of the terms and conditions associated with transactions, including the annual rate of interest, fees and other costs in clear and easily understood language in any directions issued by the Central Bank.
59. Inspection of financial leasing institutions
Part VIII – Powers of the Central Bank and officers
60. Persons qualified to be administrators
61. Central Bank to be notified of change in administratorsA financial leasing institution shall, upon a change of its administrators, notify the Central Bank within 21 days of the change or of being made aware of the change, whichever is the latest.
62. Administrator to declare personal interest
63. Bribery and collusionAn administrator, officer, employee or agent of a financial leasing institution shall not ask for or receive, consent or agree to receive, any gift, commission, emolument, service, gratuity, money, property or thing in value, for his or her own personal benefit or advantage or that of any of his or her close relations, for permitting or procuring or endeavouring to permit or procure for any person any financial lease from the institution.
64. Acquisition of substantial interest
66. Ban on receipt of deposits
67. Disclosure of information restricted
68. Confidentiality of information
69. Exchange of information
70. Publication of information by Central BankThe Central Bank may publish in whole or in part at such time as it may determine any information or data furnished under this Act, except that no information or data shall be published which might disclose the individual affairs of a financial leasing institution or of a person whose interests are protected under section 67 unless the consent of every such person has been obtained in writing prior to that publication or the data is already in the public domain.
71. Central Bank’s power over unsafe practices
72. Suspension unaffected by appealThe filing of an appeal under section 71(4) shall not effect a suspension of any measures imposed by the Central Bank.
73. Prohibited operations
74. Approval to transfer assetsA financial leasing institution shall not—
75. General directionsThe Central Bank shall have the power to issue such general directions, as may be considered necessary for the purpose of ensuring that financial leasing institutions maintain efficient standards in carrying out their duties, including directions on the following matters—
Part IX – Miscellaneous
76. Administration of abandoned propertyThe Central Bank may prescribe matters in relation the administration of abandoned properties acquired by deposit-taking financial leasing institution's conduct of business.
78. Penalty for offence
79. Protection from suitThe Central Bank or any member of its Board nor any officer, employee or agent of the Central Bank shall be subject to any action, claim or demand by or liability to any person in respect of anything done or omitted to be done in good faith under, or in execution or intended execution or in connection with the execution of, any power or duty conferred on the Central Bank by or under this Act.
80. Review by courtThe acts, directions, orders, determinations or decisions of the Minister or the Central Bank under this Act shall be subject to judicial review.
81. RegulationsThe Central Bank may, in consultation with the Minister, make regulations for the better carrying out of objects and purposes of this Act including—
82. Rules of court
83. Non-application of ActExcept where it is otherwise expressly provided in this Act or any other written law, the provisions of this Act in whole or in part shall not apply to such persons as may be prescribed by regulations.
84. Compounding of offences
85. Application of Companies ActExcept where expressly stated in this Act, nothing in this Act affect the operation of the Companies Act in respect of the incorporation and winding up of any financial leasing institution to which that Act and this Act apply.
History of this document
31 December 2015 this version
18 November 2013
11 November 2013
|Financial Leasing (Capital Adequacy and Reserve Fund) (Amendment) Regulations, 2018||Statutory Instrument 77 of 2018|
|Financial Leasing (Capital Adequacy and Reserve Fund) Regulations, 2014||Statutory Instrument 113 of 2014|
|Financial Leasing (Gearing) Regulations, 2018||Statutory Instrument 76 of 2018|
|Financial Leasing (Lease Classification and Provisioning) Regulations, 2014||Statutory Instrument 112 of 2014|
|Financial Leasing (Licensing) Regulations, 2014||Statutory Instrument 114 of 2014|
|Financial Leasing (Liquidity Risk Management) Regulations, 2018||Statutory Instrument 75 of 2018|