SDC Instructions to Shareholders Sections Elucidate Investor Rights

Date: 08/01/2001

The Securities Depository Center (SDC) has recently issued new instructions to Shareholders Sections at public shareholding companies that stress the rights of the investor in the Jordanian equity market, said the CEO of the SDC on Sunday.

"SDC is the only agency in the Kingdom authorized to conduct the activities of registration of securities, transfer of their ownership and settlement of the value of securities between financial brokers," said Samir Jaradat, CEO of the SDC.

The SDC has issued regulations and procedures necessary for the achievement of its objectives. This is necessary for the development of the SDC’s stages until the SDC is able to reach the book entry stage and apply the principle of delivery versus payment (DvP), in addition to the safekeeping of securities, according to Jaradat.

"The SDC will start depositing securities and the data related to them in accordance with procedures that will be provided to public shareholding companies once all the SDC’s programs are complete." Jaradat told the Jordan Times.

The SDC is being built on the basis of three stages, two of which have already been implemented. The third is expected to be implemented in the second half of 2001.

The stages are:

Client identification:

Financial brokers in the SDC’s electronic system enter information and data pertaining to dealers in securities and the SDC issues electronic deeds to update the shareholders' registers.

Issuance of Electronic Deeds:

By adopting the transfer deeds issued by the SDC, all the information and data contained in deeds is recorded in the shareholders’ registers at the public shareholding companies.

Depositing Securities:

During this stage, which depends on the information and data of the owners of securities and updating the shareholders’ registers, securities will be deposited at the SDC.

"The primary reason for the establishment of Shareholders Sections at public shareholding companies is to protect the rights of securities owners and to preserve their property," said Jaradat.

One of the main objectives of the regulations and procedures of the SDC is to protect investors in the capital market. The new procedures can be found in the SDC’s “Regulations on the Registration of Securities, Transfer of their Ownership and Settlement of their Value” manual.

"The investors can obtain a copy from their financial brokers or registrar of the company." Said Jaradat.

The Jordan Securities Commission regulates the SDC which was established under the Securities Temporary Law No. 23 of 1997. In May 1999, it started functioning as a private, non-profit institution, independent financially and administratively.