Transcript SDC Basic Presentation

Overview
Presentation
Dead Sea , October 25th 2007
Samir Jaradat
CEO
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Depository Center, Jordan. All Rights Reserved.
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Construction Blocks
 Foundation
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Fundamentally Sound Building Blocks
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Quality Materials
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Constructed According to Standard Code
 Materials
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Legislative Blocks: Strong & Dynamic Rule of Law
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Regulatory Blocks: Securities Regulator
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Technical Blocks: Robust & Globally Compliant Technology Systems
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Operational Blocks: Exchange, Registry & Depository
© Securities
Depository Center, Jordan. All Rights Reserved.
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Establishment
 Public utility institution
 Established in the Kingdom by virtue of the Securities Law
 A legal entity with financial & administrative autonomy
 Subject to the Jordan Securities Commission’s monitoring
& supervision
 Commenced operation in May 1999
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© Securities
Depository Center, Jordan. All Rights Reserved.
3
Goals & Objectives
 Enhance the confidence of investors in securities & enable them
to follow-up their investments in securities with ease by
establishing a central registry to safe-keep the ownership of
securities
 Reduce risks related to settlement of trading transactions
executed through the Market by implementing by-laws,
instructions & procedures that are fair, fast & safe
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© Securities
Depository Center, Jordan. All Rights Reserved.
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Functions & Responsibilities
 Unique identification number for investors
 Central registry system
 Central depository system
 Safekeeping via Book-Entry
 Registered ownership
 Centralization of ownership restrictions
 Authenticated corporate actions
 Clearing & settlement
 Account level structure
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Depository Center, Jordan. All Rights Reserved.
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Risk Management
Markets have procedures, rules & regulations to protect
market-participants from loss to assure the smooth functioning
of the market & to maintain the confidence of investors
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Settlement Guarantee Fund
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Separate legal entity with financial autonomy
Fund membership is compulsory for brokers & dealers
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Settlement cap for market participants commensurate with posted
collaterals
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Settlement bank
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Buy-in & sell-out measures
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Immediate suspension of trading for defaulting brokers
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Strict licensing protocol for market participants (Zero Tolerance)
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Depository Center, Jordan. All Rights Reserved.
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Risk Management
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Unbiased corporate governance
Transparent, automated information dissemination
Established business continuity & contingency plans
Robust risk controls in the SDC operations
Movements are final & irrevocable (zero failed trades)
Compliance to G30 recommendations & best practices
State of the art Electronic Systems SCORPIO®
© Securities
 Clearing & Settlement System
Registry System
 Securities & Funds
 Shareholder Ownership Registry
 Delivery versus Payment
 Authentication of Ownership
 Final & Irrevocable Settlement
 Non-Trade Transfers (OTC)
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Investment Made Secure
● Regulation
 Sound regulatory framework & binding enforcement, with continued
progress
● Accessibility
 Jordan Capital Market is open to all international investors
 Repatriation of capital
 No restrictions on repatriation of funds into or out of Jordan
 Taxation
 No capital gains tax, this includes cash & stock dividends
 Currency
 The unit of currency in Jordan is the Jordanian Dinar (JOD), & the JOD
exchange rate is pegged to US Dollar
● Registration
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No physical certificates
Dematerialized shares
Settlement is effected on the basis of Delivery versus Payment
Ownership is updated on T+2 & backdated to T
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Depository Center, Jordan. All Rights Reserved.
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Investment Made Secure
● Ownership
 Registered under the name of beneficial owner name
 Nominee & street names does not apply
 Execution
Local brokers execute in the name of
 Beneficial owner
International broker
 Accounts
 Depository Account
 Trading Accounts
Custody Account
 Segregated Securities Accounts
● Settlement Cycle
 T+2 rolling settlement with multilateral netting
● Settlement Method
 Book-entry at the SDC
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© Securities
Depository Center, Jordan. All Rights Reserved.
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Investment Made Secure
● Cash & Clearing system
 Payments are processed through the "Real Time Gross Settlement
System-Jordan" (RTGS-JO), using SWIFT instructions to effect transfers
with immediate value
 Blocking
 Securities are blocked in the buyer’s & seller’s accounts on T+0 pending
successful cash settlement on T+2
 Turnaround Trades
 Allowed, provided the same broker is used in the same settlement cycle
 Numbering
 ISIN CODE
 CFI CODE
 Overdraft Restrictions
 Overdraft facility in Jordan can be offered to foreign investors for a
period not exceeding 15 days for settlement purposes
 Corporate actions
 Voluntary (Right Issue, Tender Offer)
 Non-voluntary (Dividends, Bonus, Stock split, … etc)
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Depository Center, Jordan. All Rights Reserved.
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Cooperation with Regional & International Organizations
● International Organization of Securities
Commissions
(IOSCO)
● World Federation of Euro-Asian Stock Exchanges (FEAS)
● Association of National Numbering Agencies (ANNA)
● Union of Arab Stock Exchanges
● Africa & Middle East Depositories Association (AMEDA)
● 9th Conference of Central Securities Depositories (CSD9)
● Association of Global Custodian
● Thomas Murray
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Depository Center, Jordan. All Rights Reserved.
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Vision
● Build World-Class Depository in the Middle East
● Book-entry Clearing & Settlement
● Implement True Delivery-versus-Payment (DvP)
● Adhere to best International Standards & Practices
● Contribute to Better & Enhanced Surveillance
● Introduce Risk Management Measures
● Promote Domestic & Foreign Indirect Investment in Jordan
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Depository Center, Jordan. All Rights Reserved.
13
Future Plans
In Progress
 Electronic Initial Public Offering e-IPO
 Members’ Area
 Some Required Enhancements
Disaster Recovery Site
Business Continuity Plan
Membership Structure
SCORPIO® System
 Advanced Settlement System
 Develop value added services
 Bonds Processing
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Planned
 Introduction to Securities Lending
 e-Payment System
 Advanced Accounting System
 Order Verification (Tight Coupling)
 SCORPIO® Web-Enabled
 Revise By-Laws
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Vote of Confidence
JORDAN
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Depository Center, Jordan. All Rights Reserved.
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Thank You
www.sdc.com.jo
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Depository Center, Jordan. All Rights Reserved.
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