The General Assembly of the Securities Depository Center (SDC) discussed the center’s 2001 annual report and the SDC's accomplishments and future plans at its annual ordinary meeting held on June 20, 2002 .The annual report highlighted the SDC's cleansing process where the data and information of securities’ owners are checked in preparation of transferring and depositing the securities at the SDC.

Khalil Nasr, SDC Chairman, emphasized that updating the information and data related to the owners of securities is one of the essential conditions for depositing securities and moving from share transcripts to electronic registry. Nasr also highlighted the important steps undertaken last year to update shareholders’ information and data by educating investors of the importance of preserving their rights and updating their information and data at the Shareholders’ Sections at public shareholding companies. In addition, to coordinating with software vendors concerned with software related to Shareholders’ Sections to update those programs to match the technical specification of the SDC.

Samir Jaradat, CEO of the SDC, gave a brief presentation on the transfer of the shareholders’ registers, a phase that precedes the depositing of securities stage, and the building of the necessary software for cleansing the shareholders’ registers after their submission to the SDC on a softcopy in accordance with the SDC technical specifications. Nasr complimented several shareholding companies for their co-operation in this regard and hoped the rest to further co-operate with the SDC due to the importance of authenticating the data of their shareholders in preparation for depositing securities at the SDC in the future easily.

The annual report contains the accomplishments related to the SDC’s electronic systems which are an essential part of developing its operations. Local programs have been built to fulfill the requirements of the SDC’s operations in the transferring of shareholders’ registers phase and the cleansing of such registers.
 
The SDC database has been adopted as the Jordan Capital Market Database. This database contains information related to: public shareholding companies (issuers of securities), securities issued and investors in securities.

The SDC has, during 2001, numbered securities and its issuers in accordance with a formula that complies with the International Standard ISO-6166 since the SDC has become a member of the Association of National Numbering Agencies (ANNA).
 
The annual report contains the future plan of the SDC clarifying the Electronic Clearing and Settlement Procedures to be implemented during this year as a transitional phase to transferring the ownership of securities electronically and clearing and settlement of trading transactions on the basis of delivery versus payment. This principal is considered an important standard since its implementation increases confidence, security and safety in the Jordan Capital Market. Jaradat said that Electronic Clearing and Settlement is one of the important steps the SDC will adopt during this year since these procedures have certain advantages such as the development of the method of payment of the value of securities and decreasing risks associated with clearing and settlement of securities where cash settlement between brokers for securities traded at the Amman Stock Exchange will be made through the SDC directly by money transfers gradually. Nasr said that the SDC has finished the necessary by-laws and regulations where they will be distributed to the SDC members after their approval by the Board of Commissioners of the Jordan Securities Commission.

Jaradat said that the success of this phase depends on the co-operation of all those involved in the Jordan Capital Market and especially the public shareholding companies, brokers and investors. The Public Shareholding companies should inform the SDC of any changes that occur to the shareholders’ registers and brokers must identify their clients on the SDC database before entering any selling orders through the Trading System. The main responsibility lies with the investor, to authenticate and update all relevant identification information with the issuers of securities the investor owns.

Jaradat said that the electronic clearing and settlement stage is a transitional step necessary to enable the SDC to implement its final stage of depositing securities and transferring its ownership by book entry in the SDC registers and settling their value electronically. In this final stage the principal of delivery versus payment will be implemented where delivery of securities will be against final and irrevocable payment of funds, this requires that the proper legislation and risk management mechanisms be put in place.

Since the SDC is committed to the establishment of a safe and secure environment to attract investors and to establish a transparent, efficient and fair Capital Market in Jordan, thus the SDC has adopted the necessary software to comply with the requirements of the local market and the international standards which will place Jordan at par with developed international capital markets.
 
The General Assembly also discussed the SDC financial statements and the auditors report concerning the financial situation of the SDC in 2001.
 
The SDC General Assembly consists of public shareholding companies and financial services companies licensed to perform brokerage and custodial activities.