Locally, corporations often raise capital through debt by getting a loan or issuing a bond. Such bonds are issued and offered on the Malawi Stock Exchange[MSE].  This guide will therefore focus on raising capital on the MSE by means of public offering of bonds.

What is a Bond 

A corporate bond is a written acknowledgement of indebtedness offered or issued by a corporation in respect of a loan made or to be made to it. The bond is also an undertaking by the corporation to repay the amount borrowed by it [together with interest on the borrowed amount] over a period of time.

Put simply, the bond functions as a loan between an investor and the corporation where the investor agrees to give the corporation a certain amount of money payable on a specific date on condition that the corporation will be making periodic interest payments at an agreed rate in the period before the date of repayment. The date for repayment is usually called the maturity date.

Legal Framework for issuing and Listing of Bonds

The pieces of legislation that are key in listing bonds on the MSE are the Financial Services Act, the Securities Act, and the Companies Act as well as other regulations, rules and policies made pursuant to or under the Acts mentioned above.

What does Issuing a Bond mean?

Issuing a bond simply refers to a circumstance where a corporation offers or invites the public to provide a loan to it , in a bid to raise capital.  The offer specifically provides that the loan will be  repaid on a specific date with interest, at an agreed rate, paid periodically and in the period preceding the agreed date of repayment.

To Whom are Bonds offered to?

Bonds can be offered to the public or privately. Thus, a bond is a form of a security[1] which a company can offer to the public[2]. An offer to the public is defined broadly to include (1)  an offer of a security to a section of the public, (2) an offer to individual members of the public selected at random, or (3) an offer to a person if the person became known to the corporation offering such security as a result of an advertisement made by or on behalf of the said corporation which was intended to result in the public seeking further information about an investment opportunity. [3]

How are Bonds Offered?

A bond is offered for sale with a face value. This is also called the par value. Par Value  is the amount that the corporation must pay the holder of the bond at the end of the life cycle of the bond or upon reaching date of repayment.

What are the advantages of Issuing a Bond?

Raising Capital by issuing a bond presents many advantages to the corporation including (1) not parting with ownership of the corporation since it is a debt and no alteration is done to the ownership structure, (2) flexibility as it allows issuing of bonds of varying terms for various periods to a large pool of investors and not a single investor since there is  access to a large pool of investors with capital (3) liquidity and less risk and (4) from a taxation point, the periodic interest payments made to bondholders may be deductible from the corporation’s taxes.

Issuing bonds on the  MSE

The MSE has a debt market where bonds can be offered for sale by a corporation to the public. Before a corporation can make a public offer of bonds on the MSE debt market, certain requirements must be satisfied as outlined below.

Listing Admission Requirements

For a Corporation’s bonds to be listed on the MSE, the following requirements must be met:

• The company must be duly incorporated in the Republic of Malawi.
• The Company must be in compliance with the laws of the Republic of Malawi under which it was incorporated.
• The company must be authorized to issue debt securities by its Memorandum and Articles of Association.
• The company must obtain all necessary statutory and other consents for the issuance of such debt security such as consent from the Board of Directors where the Memorandum and Articles of Association require the same.
  

Listing Fees

At the initial issue of bonds on the MSE, a fee in the sum of MK 1, 650, 000.00 is payable by the company that intends to issue the bonds. For more information about listing fees, visit https://mse.co.mw/index.php?route=counter/debt/fees.

Conclusion

Most corporations raise capital or funds to finance its operations and growth by debt in the form of issuing bonds, which is security in the form of an undertaking by a corporation to repay the amount borrowed by it with interest over a period of time. Bonds may be issued publicly or privately. Issuing of bonds presents a number of advantages. In Malawi, the MSE has a debt market where public offers of bonds can be made upon satisfaction of certain requirements.

[1] See Section 2 of the Securities Act

[2] See Section 258 of the Companies Act, 2013

[3] See n2 above

This content appears as a courtesy of Ritz Attorneys at Law, a proud member of the China Collaborative Group (CCG Association). It is informational in nature and does not constitute legal advice or establish an attorney-client relationship between you and its author, publisher or any member of CCG. For more information, please visit https://ritzattorneys.com/.

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A design is defined as any feature of shape, configuration, pattern or ornament that is applied to any object by an industrial process and are judged solely by the eye. A design does not include any method of construction or feature which is dictated solely by the function which the object is to perform.

For a design to be registered, it must be new or original and must not be the same as a design which appears on the design register or has been published previously in Malawi. A design which differs with a previously registered design only in immaterial details or in variants commonly used in trade shall not be registrable.

Legal Framework for Registered Designs

Registered Designs are governed by the Registered Design Act [Cap 49:05].

Malawi is also a signatory to various international instruments including:
• The Paris Convention for the Protection of Industrial Property
• The Protocol on Patents and Designs within the Framework of the Industrial Property Organization for English-speaking Africa, 1984
• The Banjul Protocol
• The Madrid Protocol

Who may apply for Registered Design

The following can apply for registration of a design:
• The proprietor
• The author
• The assignee or legal representative of the proprietor

What Designs can be Registered

For a designed to be capable of registration, it must fulfil the following conditions:
• Be new or original
• Must be distinguishable by sight
• Must be distinguishable from known designs
• It must not merely be a feature that is commonly used in trade
• It must not be a feature that is solely dictated by the function that the product must perform
• Must not contain anything contrary to public order or contain any obscenity

What Designs Cannot be Registered

The following shall be excluded from registration under the Registered Designs Act:
• works of sculpture other than casts or models used or intended to be used as models or patterns to be multiplied by any industrial process
• wall plaques and medals
• printed matter primarily of a literary or artistic character, including book jackets, calendars, certificates, coupons, dressmaking patterns, greeting cards, leaflets, maps, plans, postcards, stamps trade advertisements, trade forms, and cards, transfers and the like.

What is the Procedure for registration of a design in Malawi

Registration of a Design in Malawi can be obtained by filing an application with the office of the Registrar General as follows:
• The appropriate from in accordance with the Registered Designs Act
• An Endorsement as to novelty
• Representations or specimens to be furnished with the application
• Power of attorney where applicable

The Registrar may then make the necessary searches as to novelty and registrability of the design.

What Rights are Conferred on Registration

The registration of a design under the Registered Designs Act shall give the proprietor or their successors the exclusive copyright in the design.
The proprietor shall have exclusive right to sell or use the said design in any trade or business.
The proprietor also has the right to assign or license the said design to third parties; such assignment may be registered with the office of the Registrar.

What is the Duration of Protection

Design registration is valid for a period of five years from the date of filing of the application and is renewable for two further terms of five years each.

How are Rights Enforced

Any action for infringement of a registered design shall be brought before the High Court where the applicant is at liberty to seek interlocutory remedies.

Conclusion

The law in Malawi allows for the registration of novel designs and vesting of rights in copyright, in their prospective proprietors. Said registration is valid for a renewable period of five years with infringers liable to suit in the High Court.

This content appears as a courtesy of Ritz Attorneys at Law, a proud member of the China Collaborative Group (CCG Association). It is informational in nature and does not constitute legal advice or establish an attorney-client relationship between you and its author, publisher or any member of CCG. For more information, please visit https://ritzattorneys.com/.

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DPB-the highlights

As stated, the DPB comprehensively incorporates most of the governing norms on data protection.

Comprehensive Incorporation of Core Principles on Data Protection

There are several internationally recognised core norms for data protection. These include Fair and lawful processing of personal information, Purpose specification, Minimality, quality, Openness and transparency, Data subject participation, Sensitivity, Security and confidentiality and Accountability.[1]

The DPB mandates data controllers to process information fairly, in a transparent manner and subject to the data subject giving consent.[2] This suffices as lawful processing of personal data under the DPB. Section 19 of the DPB also requires specific treatment for sensitive personal data. The DPB requires purpose specification for the processing of personal data, minimality, quality.[3] Data subject participation is guaranteed under part IV of the DPB which outlines the rights of a data subject. Data security is comprehensively regulated under Part V of the DPB. In all this, it is easy to appreciate how comprehensive the DPB is in embracing the international norms and standard on data protection.

Cross-Border Transfers of Personal Data

The DPB adopts a comprehensive framework for cross-border transfer of personal data.[4] This is a great step towards ensuring data protection in cross-border online transactions. This is because the DPB effectively provides a platform against which cross-border flows of personal data can be regulated. This can be sharply contrasted from the old Electronic Transactions and Cyber Security Act, which did not contain any provisions regulating cross-border flows of personal data in electronic transactions.

The DPB can be commended on many fronts including the condition of making data flows primarily subject to a decision on the adequacy of data protection in the foreign country to which the data will be transferred. [5]  The DPB is progressive in that data transfers can be authorised where the foreign country has a law, binding corporate rules, contractual clauses, code of conduct, or certification mechanism that afford an adequate level of protection.[6] This list is exhaustive enough to ensure sufficient facilitation of cross-border flows. In the absence of an adequate level of protection of any of the foregoing, a data transfer can be authorised under these conditions: if the data subject gives consent; if the processing is necessary for performance or conclusion of contract involving the data subject; and where consent cannot be practicably given, the transfer is nevertheless in the best interest of the data subject and the data subject would not have objected to it had he been asked.[7] These exceptions are broad enough to ensure the pace of international transactions is not unnecessarily hindered.

Data Protection by Design and Default

The DPB is also very progressive in that it accords the Authority with the power to publish directions on good practices and codes of conduct in data protection including the application of data protection principles by design and default in the processing of personal data.[8] Data protection by design is a concept that dictates that in light of progressive data protection regimes, companies must ensure that in their activities they incorporate data protection. Essentially since the companies must comply with data protection they must not wait for breaches before they address data protection but rather from the commencement of any action or process data protection must be incorporate and addressed.

On the other hand, data protection by default entails that for those computer products already released, there must be adherence to the highest standard of privacy to ensure data is kept safe and secure. Further, any data necessary for the operation of the product should only be kept for the minimum possible amount of time. The incorporation of these concepts in the DPB is a remarkable step in ensuring that privacy will be respected as technology gets more sophisticated.

The DPB clearly updates the data protection landscape in Malawi to comparable international standards.  This is indeed a shift in the right direction and will ensure that Malawi takes part in the information age. In my next article I shall explore some of the weaknesses in the DPB that may yet be improved to ensure comprehensive legislation is enacted.

Author: Gonjetso Dikiya LLB(Hons) University of Malawi; LLM candidate in Information and Communications Law, University of the Witwatersrand.

Head of Legal Services- Dispute Settlement Services

This content appears as a courtesy of Ritz Attorneys at Law, a proud member of the China Collaborative Group (CCG Association). It is informational in nature and does not constitute legal advice or establish an attorney-client relationship between you and its author, publisher or any member of CCG. For more information, please visit https://ritzattorneys.com/.

[1] Roos Anneliese ‘Core Principles of Data Protection’ 2006 CILSA 102-130.

[2] S. 18 of the DPB

[3] S. 23 of the DPB.

[4] Part VI of the DPB.

[5] S. 34(1)(a) of the DPB.

[6] S. 34(1)(a) of the DPB.

[7] S 36 of the DPB.

[8] S. 13 of the DPB

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A copyright is an exclusive property right that belongs to authors of any work by the mere fact of its creation.
Copyright law does not protect ideas, but the expression of ideas, the forms but a work shall be eligible for copyright irrespective of its form of expression, its quality or purpose for which it was created.

Legal framework for Copyright in Malawi

Copyrights are governed by the Copyright Act 2016.
Malawi is also a signatory to various international instruments including:

• Berne Convention for the Protection of Literary and Artistic Works
• Universal Copyright Convention (Geneva)
• Agreement on Trade-Related Aspects of Intellectual Property Rights

Procedure for Registration of a Copyright

There is no registration requirement for copyrights in Malawi. An author of any work shall, by the mere fact of its creation, enjoy an exclusive property right in the work.

Eligibility for Copyright Protection

Any Literary, dramatic, musical or artistic work shall not be eligible for copyright unless:

• it is original in character; or
• it is a derivative work including the following:

i. translations, adaptations, arrangements and any other transformations of original literary, dramatic, musical and artistic works

ii. collections of works, such as encyclopedias and anthologies, which, by reason only of the selection or arrangements of their contents, constitute intellectual creations.

Works not subject to Copyright Protection

Copyright protection does not extend to the following:

• written laws and decisions of courts and administrative bodies and to official translations news published, broadcast or communicated to the public by any other means; and
• a report made by a commission appointed by the Government or any agency and which the Government has made available to the public

Rights Conferred by Copyright Protection

Rights conferred by copyright protection are subdivided into two major groups, being, economic rights and moral rights.

Economic Rights

The author of any copyrighted material shall have exclusive right to the following:

• Reproduction of the copyrighted material;
• Distribution of the copyrighted material through sales, renting, licensing or lending;
• Public display of the copyrighted material;
• Public performance of the copyrighted material;
• Communication of the copyrighted material to the public; and
• Translation, adaptation, or any other transformation of the copyrighted material.

Moral Rights

The author of any copyrighted material shall have exclusive moral rights:

• The right to claim ownership of the work and to demand that his/her name be mentioned in a manner in line with proper usage; and
• Object to and seek relief from alternation or distortion of their work where such act would be prejudicial to his/her honour or reputation or where such alteration would lead to discrediting of the work.

Ownership of a Copyright

A person vested with copyright shall be the author of the work.
Where two of more persons are authors of the work, copyright shall vest jointly.
Where the work is created during the course of the author’s employment or is a product of commissioned work, the rights in the work shall vest in the employer or party that commissioned the work.

What is the Duration of Protection

Copyrights shall be protected during the lifetime of the author and fifty years after his/her death.
In cases of joint ownership, during the lifetime of the last surviving author and for fifty years after his death.
In cases where the author is anonymous, fifty years from the date such work was first published.

Infringement of a Copyright

A person infringes a copyright where they, without valid transfer or license, reproduces, duplicates, extracts or imitates such a work, or sell, lends or hands out the said work without consent of the copyright owner.

How are copyrights enforced

Copyright infringement is a criminal offence and on conviction, violators shall be liable to a fine of MK5,000,000.00 and to imprisonment for two years.
A civil action for copyright infringement can also be commenced by the owner of the copyright where they can obtain remedies as follows:

• Damages;
• Injunction;
• Account of profits or otherwise; and
• Forfeiture of all reproductions to the copyright owner or the government.

Conclusion

Works in Malawi are subject to copyright protection merely by virtue of their creation. Copyrights vest various rights in the creators of works and prohibits unauthorised distribution or reproduction of such works. Where such infringement occurs, the proprietor has various remedies in both criminal and civil courts.

This content appears as a courtesy of Ritz Attorneys at Law, a proud member of the China Collaborative Group (CCG Association). It is informational in nature and does not constitute legal advice or establish an attorney-client relationship between you and its author, publisher or any member of CCG. For more information, please visit https://ritzattorneys.com/.

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