Securities Depository Center Celebrates 2nd Anniversary
Date: 11/05/2001
The Securities Depository Center (SDC) celebrates it 2nd Anniversary on May 11,2001. In accordance with the 1997 Securities Law and the restructuring process of Jordan’s Capital Market, the SDC was established to provide settlement, clearing and a depository for all transactions that take place on the Stock Exchange. The SDC is an independent, non-profit institution that oversees the settlement and transfer of the ownership of securities, including stocks, bonds and mutual funds.
The main functions of the SDC are the registration of securities and transfer of ownership. The registration includes client identification to ensure accurate records are maintained. In addition, electronic deeds are issued. These deeds contain all of the details regarding the transactions. The SDC is also in charge of transferring the ownership of stocks in the case of inheritance or if there is an exchange of stocks between family members.
"The Securities Depository Center is one of the Capital Market main institutions and an essential one in the continued development of Jordan’s Capital Market. It is like a bank for all securities, including stocks, bonds and mutual funds. The SDC, ensures a safe and smooth transaction and settlement between the buyer and seller on the Stock Exchange," stated H.E. Dr. Bassam Saket, Executive Chairman of the Jordan Securities Commission.
In its first two years the SDC has implemented several new procedures to raise the efficiency and security of the SDC. A few of those initiatives include establishing a surveillance department to oversee all transactions and implementing electronic deeds.
At the end of the trading day, the SDC receives an electronic daily report from the ASE with all of the transactions that took place during that day. Once the file is obtained by the Securities Depository Center, they will issue the electronic deed in the purchaser’s name. The deed contains the name of the issuer, the name of the buyer, their investment numbers (SDC number) and the transactions that occurred. The SDC will then, deliver the conratct to the issuers to ensure that the ownership is authentic.
"The SDC has made great strides in the first two years and we are expecting even more during the next two years. Currently we are on target to be compliant with international practices in the near future," stated Samir Jaradat, CEO of the SDC.
Currently the SDC is working on a five-stage plan to create the safest most efficient method for trading stocks that complies with international standards. Those stages include:
| Stage One | : | The Registry System- This will register securities and issue electronic contracts to establish accurate shareholder registers. |
| Stage two | : | Depository System- This will record each trade on the shareholders register. |
| Stage Three | : | Clearing System- This will prepare the trade contract between brokers. |
| Stage Four | : | Settlement System- This will ensure the delivery of payment before a contract is issued. |
| Stage Five | : | Other Services- This would include creating stock dividends, mergers and acquisitions. |
Installation of the system and reaching the final stages of the SDC will allow us to finally complete our objective of creating a viable, fair and efficient securities market in Jordan and generate domestic and international investor confidence," Jaradat went on to say.
During the two years of operation, the SDC has simplified the processes of transferring the ownership of stocks. This procedure has established a reputation, both internationally and locally, as a safe and effective method for trading stocks. As well as, created public and investor confidence in Jordan’s Capital Market. This restructuring process has ensured the Jordanian clearance and settlement system operates with maximum efficiency and minimum risk.
A seven-member Board of Directors oversees the SDC. Those board members represent public shareholding companies and the financial companies that are licensed financial intermediaries.
