Pledging securities through the SDC directly

The SDC undertakes the task of placing a pledge upon deposited securities through the SDC directly not for the benefit of local banks using the Electronic Pledge System. Placing a pledge is carried out based on a request submitted to the SDC directly by the pledgor and pledgee.

Persons benefiting from the service

The pledgee and the investor (pledgor).

Conditions of obtaining the service
  1. The investor’s shares must be deposited at the central registry of the SDC and are not restricted by any of the ownership restrictions.
  2. The presence of pledgor and pledgee or their legal representative or authorized signatory to the SDC.
  3. Placing the pledge by signing the Pledge Form in front of an authorized SDC employee.
Required Documents
  1. A copy of valid identification documents of both pledgor and pledgee.
  2. In cases where there is a legal representative to conduct pledge transaction according to the power of attorney. The power of attorney must fulfill the conditions for its accreditation with the SDC.
  3. Covering letter issued by the pledgor and pledgee or their legal representative includes a request from the SDC to place a pledge on the securities according to the following:
    • The names of the pledgor and pledgee are contained in the supporting documents for each of them.
    • The SDC number for pledger.
    • The name and number of securities to be pledged.
    • Identifying the lawful rights that result from pledged securities, whether they are subject to the pledge or not, as the case may be.
    • Stock dividends or profits or refunds for the securities
    • Bonus shares.
    • Refund arising from redemption of the corporate bonds or Sukuk during its lifespan or on maturity date
    • Refund arising from decreasing the company’s capital as it is an excess cash.
    • Acknowledgement of the payment of stamps fees for the pledge operation to the Ministry of Finance without holding the SDC responsible.      
  4. A copy of receipt issued by Ministry of Finance verifies that the stamp's fees are paid.
  5. An address for notifications of both pledgor and pledgee
Procedures
  1. The pledgor and pledgee or their legal representative or authorized signatory to sign the Pledge Form (Shares, Corporate Bonds, Sukuk) in front of an authorized SDC employee.
  2. The SDC verifies the existence of a free balance registered in the name of the pledgor in the Central Registry that allows the pledge process to be carried out.
  3. The concerned employee collects the fees for executing the transaction.
  4. Executing the process of pledging securities by the SDC.
  5. Informing the pledgor and pledgee of executing the pledge process by virtue of a letter issued for this purpose indicated the address mentioned in the pledge form.
Estimated Time

One business day.

Location

Headquarter of the SDC.

Partner institutions

None.

Estimated Fees

The SDC shall collect (5) JOD for each placed pledge on securities.

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