Operational Development to the Settlement Cycle

التاريخ
Ref. : 8/11/3770
Date: 03/08/2017

Memo No.
(82/2017)

Brokers & Custodians, Members of the SDC

Subject: Operational Development to the Settlement Cycle
 
Later to the SDC’s previous memos and coordination with its members of Custodians and Brokers related to the new development to the Settlement Cycle, which includes the involvement of the Custodians through settling the trades of their clients directly with the SDC on a Delivery Versus Payment method.
   
And Since the SDC has already published earlier the first draft of the amended legislations (The Registration, Deposit and Settlement of Securities Instructions and The Internal Bylaw of the Settlement Guarantee Fund) and completed gathering the fee back from its participants of Brokers and Custodians related to this project.
   
We would like to inform you that the Board of Commissioners of the Jordan Securities Commission has approved the new legislations related to introducing this new Settlement Process which are included in the Registration, Deposit and Settlement of Securities Instructions of the year 2017 and The Internal Bylaw of the Settlement Guarantee Fund of the year 2017, noting that the enforcement date for the mentioned legislations will be decided by the SDC’s board of Directors depending on the readiness and completion of all the required procedures thereto.
   
We would also like to highlight in the summary below the final approved basis of this new project:
   
1. At the end of each trading day, the SDC will initiate a “Settlement Contract” for each trading contract executed for a custody account, and the concerned custodian and broker will be able to view the details of this settlement contract.
2. The custodian will have the ability to accept or reject the Settlement contract above mentioned in article (1) by (15:00 pm) on (T+1), and should the custodian take no action to accept or reject it, the Settlement contract shall be considered rejected.
3. If the Settlement Contract is accepted by the Custodian within the specified time set forth, he will be responsible before the SDC for the settlement of this contract duly, and becomes obliged to deliver the Securities or Pay the cash as the case may be in accordance with the procedures that govern the Clearing and Settlement Process, on a final and irrevocable basis by (T+2).
4. If the Settlement Contract is rejected as set forth, the concerned Broker will be responsible before the SDC for the settlement of the trading contract duly, and remains obliged to deliver the Securities or Pay the cash as the case may be in accordance with the procedures that govern the Clearing and Settlement Process.
5. The Financial Settlements with the Custodians for the accepted Settlement contracts shall be conducted in accordance with the procedures set for Financial Settlements for the trading contracts via money transfers using SWIFT messages affected through the SDC’s settlement account with the Central Bank of Jordan using the RTGS-JO.
6. The SDC’s licensed members of Custodians shall become members of the Settlement Guarantee Fund, and are required as informed to provide the SDC with the guarantees as approved by the SDC’s board of Directors (Standing Instructions/Bank Payment Orders).
   
Noting that the final date for implementation will be announced once determined by the SDC’s board of Directors.


Kind Regards,

Khalil Naser

Chief Executive Officer
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