(2) The Cabinet Secretary may issue national government securities on behalf of the national government for money borrowed by the national government in accordance with criteria prescribed by regulations approved by Parliament for the purpose of this subsection. (3) Any national government securities issued by the The Public Finance Management Act, 2012 75 Cabinet Secretary under this section shall be within the borrowing limits set out by the National Assembly under section 50(2). (4) The authority of the Cabinet Secretary to borrow money includes the authority to borrow money by issuing national government securities.

(5) National government securities may be issued in one or more series and in accordance with prescribed regulations. (6) An agreement to obtain a loan by a national government entity may be amended from time to time and where the amendment results in further indebtedness or prejudice to the entity that borrowed, the amendment shall be approved by Parliament. (7) The Cabinet Secretary shall ensure that every national government security issued under this section is given in the name of the Republic of Kenya.

(8) A national government security may be executed on behalf of the national government only by— (a) the Cabinet Secretary; (b) a delegate appointed by the Cabinet Secretary; or (c) a borrowing agent appointed for the purposes of this Act. (9) For the purposes of subsection (8), it shall be sufficient if the signature of a person who is required to execute a national government security under this section is reproduced on the security. (10) The Cabinet Secretary may authorise in writing the issue of a duplicate national government security to replace a national government security that is lost, damaged, or destroyed, but only if the Cabinet Secretary is satisfied that the loss, damage or destruction has occurred.

(11) Subject to any other legislation, secondary trading of national government securities shall be carried out only in such manner as may be prescribed by regulations made for that purpose and for purposes of this subsection “secondary trading” means any activity leading to a change in the ownership of a national government security before its redemption date. (12) Nothing provided in this section shall prevent, The Public Finance Management Act, 2012 76 government securities to be issued and exist in electronic form as a debt entry.

(13) If the proceeds of a national government security have not been collected by, or cannot be paid to, the holder of the security because the whereabouts of the holder or, if the holder has died, the whereabouts of the holder’s personal representatives, are unknown, the Cabinet Secretary shall arrange for the National Treasury to credit the amount of money due to the holder to an interest free account for the holder’s benefit. (14) If, after six years from the redemption date of a national government security, the proceeds of the security have not been collected by, or paid to, the holder or the holder’s personal representatives, the Cabinet Secretary shall return the uncollected amount to the National Exchequer Account to form part of the Consolidated Fund in accordance with regulations.

(15) The right of any person who has a legitimate claim to the proceeds of a security is not affected by the payment of the proceeds into the Consolidated Fund. (16) The Cabinet Secretary shall publish and publicise annually all payments made in terms of subsection (13). Exemption from stamp duty. Cap. 480. 54. Duty is not chargeable under the Stamp Duty Act for the issue of a national government security. Establishment of the office of Registrar of national government securities. 55. (1) There is established an office of the Registrar of the National Government Securities which shall be an office under the Public Debt Management Office.

(2) The office of Registrar of the National Government Securities shall be headed by the Registrar who shall be competitively recruited and appointed by the Cabinet Secretary. (3) The Registrar shall establish and maintain a register, to be known as the Register of the National Government Securities in which shall be recorded details of all securities issued by or on behalf of the national government. (4) Securities issued by or on behalf of the national government shall be published and publicised. (5) An entry in the Register relating to a national government security is evidence of the ownership of the security, unless the contrary is proved. The Public Finance Management Act, 2012 77

(6) The holder of a national government security recorded in the Register may, in writing, request the Registrar to amend the entry relating to the security. (7) If a request under subsection (6) is in accordance with guidelines given by the Cabinet Secretary for the purposes of this subsection, the Registrar shall, in accordance with the request, amend the entry in the Register relating to the security. (8) The Registrar shall provide the holder of a national government security with a consolidated statement in writing, showing all entries in the register relating to the security— (a) as soon as practicable after the security is issued; (b) at least once during each year the security is held; and (c) immediately after the security is redeemed.

(9) On receiving a written request from the holder of a national government security, the Registrar shall provide the holder with a statement showing all entries in the Register relating to the security. Power of national government to enter into derivative transactions. 56.(1) The national government may enter into derivative transactions, either directly or indirectly through an intermediary, but only within the framework and limits of the Budget Policy Statement and in a manner prescribed by regulations. (2) The Cabinet Secretary may, on behalf of the national government, in exceptional circumstances enter into a derivative transaction if it appears to that Cabinet Secretary to be in the public interest to do so and the transaction does not result in commitment that is beyond what is contained in the Budget Policy Statement.

(3) The Cabinet Secretary may enter into a derivative transaction on such terms and conditions, within the scope prescribed by the regulations approved by the National Assembly. (4) Money required to be paid by the national government The Public Finance Management Act, 2012 78 under a derivative transaction entered into under this section shall be a charge— (a) on the Consolidated Fund; or (b) on some other public fund established for the purpose of making such payments, if the Cabinet Secretary determines so. (5) Any expense incurred in connection with a derivative transaction entered into by the national government or by the Cabinet Secretary on behalf of the national government shall be a charge on the Consolidated Fund and no further appropriation than this section shall be required.