Emerging Jordan 2004
Date: 07/04/2004
| What is the main task of the Securities Depository Center (SDC)? |
| Jaradat: Our mission has been to build a Central Registry and a Depository for securities owners and to conduct clearance and settlement of trading contracts executed at the ASE through applying the delivery versus payment principle. Our aim is to have a system that is able to accommodate high trading and settlement volumes and will enable us to enforce transparency and have a fair and efficient equity market in Jordan that will inspire domestic and international investor confidence. |
| You have now built the bi-lingual Securities Operation Registry Processing & Information Online (SCORPIO) system. What are its key features? |
| Jaradat: SCORPIO is not a single system but a number of systems or modules for registration, depository, Clearing & Settlement and also provides mechanisms for risk management and surveillance of Clearing & Settlement. Its modules include a shareholder registry system together with family, inheritance, rejected deeds, clearing and settlement, auditing, report, brokers, issuers, custodian, JSC surveillance and auditing systems, which taken together enable the SDC to provide investors with a wide range of services. SCORPIO complies with International Best Practice and can communicate with all participants through the WAN already in place in the Jordanian capital market. In future it will be possible to link it with any trading system because of the STP (straight through processing) module. SCORPIO can also do cash settlement in any currency, and this allows an investor to trade in dollars and settle in Jordanian dinars or vice versa, and in other currencies if this is required by the capital market. |
| Why did you decide to build your own system rather than use an off the shelf? |
| Jaradat: While all trading systems are basically the same any depository system must take into consideration the elements of the local capital market structure such as the companies law, the banking law and the capital market laws and the existing practice in the country. With off the shelf software you have to do so much modification to meet local conditions that you might as well do it yourself. We also felt that developing SCORPIO in Jordan would be an important boost for local IT development. |
| What was the major challenge you faced in building the system? |
| Jaradat: The Jordanian Capital Market has been in operation for the past 23 years and this made it necessary for the SDC to be developed in stages to enable it to accomplish its mission without affecting the operation of the Market. You can say that we had to change the tyres while the car was moving and modify the SDC’s systems without disturbing the market. |
| What new services can we expect to see from the SDC? |
| Jaradat: We plan to introduce bond processing, lending and borrowing, a new version of the Pledge and Lien System and we will also connect to the Central Bank of Jordan’s Real Time Gross Settlement System (RTGS). At the same time, we are not ignoring the beneficial owner or shareholder, who is our ultimate customer, and we are designing smart card communication that will allow individual shareholders, both inside and outside Jordan, to look at their holdings and the transactions carried out by their financial brokers. In the longer term we plan to offer transaction statement, market activity analysis and portfolio valuation and Market-to-Market services. |
| Does the SDC have a regulatory role? |
| Jaradat: We are regulated and supervised by the JSC but in turn we supervise or audit our participants. So the JSC regulate and audit the brokers to see that they are in harmony with its rules and regulations concerning the orders of the clients and we do the same from our business point of view so, if a shareholder has a complaint about an issuer, we have the right to audit his books. We are also absorbing the major role that an issuer can play and giving them more time to concentrate on their shareholders and serve them in other areas that were previously neglected. |
