1) How is the Amman Stock Exchange (ASE) constituted and managed?
The Amman Stock Exchange (ASE) was established in March 1999 as a non-profit independent institution; authorized to function as a regulated market for trading securities in Jordan.
On February 20th 2017, the ASE has been registered as a public shareholding company completely owned by the government under the name "The Amman Stock Exchange Company (ASE Company)". The ASE Company shall be the legal and factual successor to the ASE.
The ASE Company is governed by a seven-member board of directors appointed by the Council of Ministers and a full time chief executive officer oversees day-to-day responsibilities.
The ASE Company aims to operate, manage and develop the operations and activities of securities, commodities, and derivatives markets inside and outside Jordan. The ASE Company seeks to provide a strong and secure environment to ensure the interaction of supply and demand forces for trading in securities in a proper and fair trading practices, and raising the awareness and knowledge of investing in the financial markets and defining the services provided by the ASE Company. To achieve its goals; the ASE Company sets its internal rules and regulations that will govern its management, also it will set the rules and regulations related to dealing in financial markets according to best international practices. The ASE Company can calculate indices for listed securities, sign agreements, strategic, commercial, investment alliances or partnerships with other securities and derivatives markets inside and outside Jordan, data venders, and any other party that deemed to be necessary. Furthermore the ASE Company cooperates and exchange information with other financial markets, regulators, government authorities, non-governmental institutions, and any other parties inside and outside Jordan.
It's worth mentioning that transformation the ASE to a company is expected to enhance the role that the ASE plays in serving the national economy, and will enable it to offer better services, attract new companies and new clients, as well as enter into regional and international agreements with various parties to increase its market share regionally and internationally.
2) What are the key legislation governing the operation of the ASE?
• Securities Law No. 76 for the year 2002
• Internal By-Law of the ASE for the year 2004
• Listing Securities Directives in the ASE for the year 2012
• Trading Directives for the year 2004
In addition, there are other regulations and instructions issued under the Securities Law for the year 2002.
3) What are the responsibilities of the Amman Stock Exchange (ASE)?
The Stock Exchange shall assume the necessary responsibilities and authorities to achieve its objectives, including the following:
1 – Lay out procedures and business methods that guarantee transparent trading and fair procedures for dealers in securities.
2 – Provide electronic and manual systems, means of connection and communication and equipped halls with the necessary technical tools and devices to trade in securities, and to perform its other activities.
3 - Monitor trading operations, and coordinate with the Commission on the follow up of such operations .
4 - Impose disciplinary sanctions upon its members and persons associated therewith for violation of the provisions of the Law and the regulations, instructions and decisions issued pursuant thereto and the provisions of the by-laws and instructions and decisions of the Stock Exchange.
5- Lay out the professional Code of Ethics for its members and improve the professional performance of them.
6- Establish standards of training, experience and administrative competence for its members and persons associated therewith.
7- Prepare reports and disseminate information on the Stock Exchange's activities.
8- Lay out and implement rules relevant to the use of the Stock Exchange utilities, facilities and services.
9- Establish cooperative relations with International Stock Exchanges, associations and organizations in the field of securities, and enter into agreements with them. Participate in specialized conferences and seminars.
10- Give its opinion on legislations relevant to the work of the Stock Exchange.
11- Own, lease and possess any movable and immovable properties as well as any rights, including intellectual property rights, which the Stock Exchange deems necessary or appropriate for performing its functions, and to dispose of said property and rights.
4) What are the aims of the Amman Stock Exchange?
The Amman Stock Exchange aims in particular at providing the necessary environment to ensure the interaction of supply and demand of the traded securities by strengthening the necessary bases for proper, transparent and fair trading.
5) What are the components of the ASE's organizational structure?
• Board of Directors.
• Chief Executive Officer (CEO).
• Deputy CEO.
• Heads and staff of departments and sections.
6) What are the departments forming the administrative structure of the ASE?
• Listing and Operations Department.
• Surveillance and Inspection Department
• Legal Department.
• Research and International Relations Department.
• Administration and Finance Department
• Information and Communication Technology Department
• Internal Auditing Bureau
• Awareness and Public Relation Bureau
There is more such information on the website of the ASE about the responsibilities of all departments that compose together the administrative structure.
7) Where and in which time zone is the ASE located?
The ASE's headquarters is located in Amman, Jordan at the following address:
Capital Market Building ??? Al-Mansour Bin Abi Amer Street
Al-Madina Al-Riyadiya District ??? Al-Abdali Area
Amman ??? The Hashemite Kingdom of Jordan
Tel: +962 6 5664109
Fax: +962 6 5664071
Amman 11121 Jordan
Time zone: (GMT+2) winter time, (GMT+3) summer time.
8) Are the securities traded in any exchange other than the ASE in Jordan?
In Jordan, there is currently one stock exchange for trading of the securities- the ASE. The Securities law No. 76 for the year 2002 allows to establish more than one exchange in Jordan.
9) What are the working days of the ASE?
The trading in the ASE is from Sunday to Thursday except for public holidays
Daily: 8:00 am- 4:00 Pm
Trading hours: 9.45 Am – 1:00 Pm
10) Who are the key participants in the ASE?
The participants in the ASE include the brokerage firms- members of the ASE, and custodian companies, as well as investors whether they are individuals, companies or funds.
11) What are the organizations and federations where the ASE participates?
1 - The Arab Federations of exchanges (AFE)
2 - The Federation of Euro-Asian Stock Exchanges (FEAS)
3 - The World Federation of Exchanges (WFE)
4- The Software and Information Industry Association (SIIA)
More, the ASE participates in Arab financial conferences and seminars. The ASE has assigned understanding memoranda and joint cooperation with a number of the World and Arab stock exchanges.
14) What types of licenses granted by the Securities Commission for the financial services companies?
- Investment trustee
- Investment management
- Financial counseling services
-Financial brokerage (broker and dealer).
- Margin account
- Issuance trusteeship.
- Custody services
- Issuance Management
15) How are the persons working in the financial services companies licensed?
The persons who work as the investment trustee, investment manager and financial advisor should be qualified financially. These persons must complies with the criteria laid down by the Commission with respect to education, good personality and the exams that test knowledge in the field of the Jordanian capital markets and organized activities and applied regulations.
16) What are the entities subject to the supervision of the Securities Commission?
1) The Amman Stock Exchange (ASE)
2) The Securities Depository Centre (SDC)
3) The issuers of securities
4) Licensed financial services companies and persons
5) Mutual funds and investment companies.
17) Who regulates the work of banks in Jordan?
The work of banks is regulated by the Central Bank of Jordan (CBJ) according to the Banking Law No. (28) For the year 2000. When the Bank performs its activities in the securities it is done by a subsidiary company licensed by the Securities Commission.
18) Are the standards of Basel applied?
Yes, the CBJ has laid down key criteria for the capital which are based on the risk assessment of the bank's assets in the Basel Convention where the lowest ratio of the capital of the Licensed Banks is 12%.
B. The Securities Depository Centre (SDC):
19) What is the role of the SDC?
The SDC is the only entity authorized under the Securities Act which is valid for undertaking the following tasks:
- Registration of the securities.
- Deposit the securities.
- Save and transfer of ownership of the securities.
- Conducting clearing and settlement of the securities.
20) What is the difference between the investor account maintained by the broker and the investor account at the SDC (central registry)?
21) What are exempted transfers?
22) Is there an electronic link for the trading between the ASE and the SDC?
Yes, the electronic link system was implemented in both the ASE and the SDC in order to improve the technical performance of the capital market institutions. Trading orders will be checked in terms of the percentage of securities ownership and accounts ownership as well as investors' and brokers' data.
23) How long does the process of settlement of securities trading?
The SDC implements of the settlement on the basis of "delivery versus payment" where the contracts are settled electronically based on T+2 (trading day + two working days).
24) How are the trades cleared and settled?
The transfer of ownership of deposited securities from the Seller's account to the Buyer's account is conducted via Book Entry as a result of the daily trading files submitted by the Amman Stock Exchange to the SDC. Securities remain suspended in the Buyer's account until the completion of the settlement process and full payment for their value. The SDC undertakes the clearing process to calculate the broker's Net to Pay or Net to Receive in accordance with all the trading contracts executed by subtracting the total value of the broker's purchases of securities for the trading day from its total sales for that trading day.
25) Is payment made against delivery?
Yes, payment of the value of sold securities is made against delivery.
26) What other procedures exist to reduce settlement risks?
The SDC issued procedures, rules and regulations to protect brokers from risks related to the settlement to assure the smooth functioning of the market:
• Settlement cap for market participants commensurate with posted collaterals
• Settlement bank.
• Buy-in & sell-out measures.
• Immediate suspension of trading for defaulting brokers.
• SDC/ASE Tight Coupled Environment.
• Operationally complaint with the recommendations of the Group of Thirty (G30) and best applied standards.
27) Can securities be registered in either physical or electronic form?
The Securities Depository Center retains electronic records of securities. The securities ownership will then be held and transferred through entries in the SDC's electronic registers.
28) How is the registration of ownership of securities?
The ownership of deposited securities is recorded on a database of the Securities Depository Center in the accounts of the securities concerned.
29) What are the procedures for monitoring compliance with the laws and regulations of securities ?
Financial services companies are subject to periodic inspection by the JSC and the ASE Inspection Division. The ASE and the JSC Capital Market Monitoring Division monitor the market for insider trading, market manipulation and other breaches. Hence; they monitor the listed and financial services companies and suspend their shares or activities , if necessary.
30) What are the procedures to be followed when any company wants to list its shares on the ASE?
Any security in the ASE is registered after fulfilling the following points:
• Registration of the concerned securities on the JSC
• Deposit the Securities at the SDC
• No restrictions on the transfer of securities ownership
• Existence of audit committee with the issuer according to the applicable Securities Law
• Issuer must sign a Listing Agreement with the ASE, which defines the rights and obligations of the parties
31) What are the conditions which make the shares of the listed company suspended by the ASE?
Under Article 14 of the Securities Listed Directives in the ASE for the year 2012, the listing of the company's shares shall be suspended as the following cases:
A. The listing of the company's shares shall be suspended in all cases determined by JSC.
B. The listing of the company's shares listed on ASE shall be suspended in any of the following cases:
1. In the case of companies that wish to reduce their capital, as of the working day following the date on which ASE is notified of the Minister of Industry and Trade's decision approving the reduction of capital and till all the procedures at JSC and the Securities Depository Center (SDC) have been completed, excluding such companies that perform this by purchasing the shares issued by them through the market.
2. In the case of merger, as of the date when ASE is notified of the merger decision approved by the Minister of Industry and Trade.
3. In the case of any contingency that substantially affects the sound dealing in securities or the company's financial position, until the procedures of disclosure to the mass of dealers are completed. The suspension shall be by a decision from the CEO if it is for a period not exceeding two days and by a resolution from the Board of Directors if the period exceeds two days.
4. At the request of the board of directors of the listed company indicating the justifications thereof. The suspension shall be by a resolution from the Board of Directors and for the period it deems appropriate.
5. Interruption of the normal activity of the company for a period exceeding three months without indicating the reasons justifying such interruption. The suspension shall be by a resolution from the Board of Directors and for the period it deems appropriate.
6. Issuance of a resolution from the company's general assembly to voluntarily liquidate it.
7. When the ASE is informed of the submission of an application for obligatory liquidation by a statement of claim to court.
C. The listing of the company's shares shall be suspended on the date of the meeting of the company's general assembly.
D. The Board of Directors may suspend the listing of the company's shares in the case of failure to provide ASE with the company's audited financial statements for two consecutive financial years.
G. The listing of any security on ASE shall be suspended if this is required by any legislation in force or upon a justified reason from the issuer or in the cases deemed necessary by ASE to protect the investors' interests.
32) What are the conditions which make the shares of the listed company delisted by the ASE?
Under Article 16 of the Securities Listed Directives in the ASE for the year 2012, the shares of the company shall be delisted as the following cases:
A. In case its legal status is changed.
B. When ASE is notified of the court's decision to refer the company to obligatory liquidation.
C. When ASE is notified of the voluntary liquidation decision passed by the company's extraordinary general assembly.
D. The continued suspension of their trading for a period exceeding two years.
33) How is the Jordanian market protected from insider dealing and other abuse?
The Securities Law defined the “insider” as a person who possesses Inside Information by virtue of his position or job, and defined “inside information” as a Information relating to one or several Issuers or to one or several securities which has not been made public and which, if it were made public, would likely affect the price of any such security. This does not include inferences drawn on the basis of economic and financial studies, research and analysis.
the Securities Commission regulates and controls the Jordanian capital market so as to ensure investor protection through the development of regulations, instructions and penalize all of the violators according to Article (110) of the Securities Law relating to violations and penalties (Chapter 11 - violations and penalties).
34) What is the “right issue”?
The right issue is a type of equity securities which gives the company's shareholders the right to subscribe in capital-increase shares intended to be issued by the company and allocated for its shareholder.
35) Who is the owner of the right issue?
The owner of the right issue is who possesses the company's shares at the end of the fifteenth day from the date of approval of the Board of Commissioners of the JSC on registration the shares of increase in capital through a private offering.
36) What types of securities are traded in the market?
The ASE trades on a verified range of securities such as stocks, bonds and right issues. Most of the traded securities are stocks. The listed shares are classified into three markets: the first market, the second market and the third market. The listed bonds are classified into three types: Treasury bonds, treasury bills and public and private institutions bonds. Further, the securities include right issues of the public shareholdings companies who wish to increase their capital through private offering directed to the company's investors.
37) How to get the information and all details of listed securities on the ASE?
The website of the ASE, ( www.exchange.jo ), includes all the listed securities and their detailed historical information.
38) What are the requirements for listing shares on the ASE?
A company seeking a listing for its securities must apply to the ASE which admits the securities to trading. This step comes after its registration for its issued securities by both the JSC and the SDC. The listing conditions vary depending on the market type where the company will be listed into whether the First, Second or Third Market.
39) What are the requirements for listing a company on the First Market on the ASE?
The requirements for the listing of a company in the First Market on the ASE include the following points:
A. A full year at least shall have elapsed during which its shares were listed on the Second Market.
B. The net shareholders' equity in the company shall not be less than (100%) of its paid-in capital.
C. The company must have realized net pre-tax profits in two financial years at least within the last three years preceding the listing transfer, provided the company's average net pre-tax profit for the last three years shall not be less than (5%) of the company's paid-in capital.
D. The ratio of the Free Float in the company to the number of the subscribed shares on the end of its financial year shall not be less than (10%) if its paid-in capital is less than (50) million Jordanian Dinars, excluding such companies whose paid-in capital equals or exceeds (50) million Jordanian Dinars.
E. The number of the company's shareholders on the end of its financial year shall not be less than (100) shareholders.
F. The company's paid-in capital shall not be less than (5) million Jordanian Dinars.
40) What are the requirements for listing a company on the Second Market on the ASE?
To list the company on the Second Market, the issuer has first to obtain the right of conducting the work. The company is transferred from the third market to the second market if the following conditions are fulfilled:
A. A full year at least shall have elapsed during which its shares were listed on the Third Market.
B. The net shareholders' equity in the company shall not be less than (50%) of its paid-in capital.
C. The percentage of the Free Float in the company shall not be less than (5%) of the paid-in capital of such companies whose paid-in capital is less than (10) million Jordanian Dinars, excluding such companies whose capital equals or exceeds (10) million Jordanian Dinars.
41) What are the requirements for listing a company on the Third Market on the ASE?
The company is transferred into the Third Market if it does not meet any of the conditions of listing to the First or Second Market, or if a listed company on the Second Market violates any conditions mentioned above (Q31;32)
42) When are the financial results of Jordanian listed companies announced to the public?
listed companies on the ASE is required to publish its audited annual financial statements within three months after the end of the financial year (which is December 31 for most Jordanian companies). It is also required to publish its preliminary results (which must have been subject to examination by its auditors) during 45 days of the end of financial year, Semi Annual financial reports are also required and must be published (following examination by the company's auditors) not more than one month after the end of the relevant period. Also the listed company must provide the ASE with a quarterly report reviewed by its auditors and compared with the same period of the previous fiscal year, within one month of the end of the relevant quarter.
43) What are other disclosures that the listed companies must make to shareholders or the market?
Issuers are required to disclose to the JSC without any delay:
(1) major changes to the company's assets, long or short term obligations, capital structure, and controllers (where the change is caused by a change in the shareholdings in the company);
(2) major deals concluded or cancelled;
(3) unusual ventures.
(4) Unexpected material losses.
(5) Major board resolutions and any resolution of the company's general assembly.
(6) Changes to Board personnel.
They must also disclose any other fundamental matter or major event that could potentially impact upon the company's profitability, financial position or share price. The JSC will make this information publicly available through notices at the ASE and at the JSC premises, and will require issuers also to publish the information.
44) Are there any Jordanian GDRs listed on foreign exchanges?
Yes, there are a limited number of Jordanian GDRs. For example there is a GDR for Arab Potash Company listed in London Exchange.
45) How are the securities traded?
The ASE provides electronic trading systems and modern, technical means of linking, where the securities are traded through trading transactions among the brokers for their own accounts or for their clients accounts after they enter the buy and sell orders to the electronic trading system in accordance with the authorizations received from their clients.
46) When does the Stock Exchange calculate a new price for the company's share?
This is achieved through the following cases:
1 - Increasing the company's capital by stock dividends.
2 - Increasing the company's capital by private offering.
3 - Reducing the company's capital by cancelling accumulated losses or cancelling issuance discount or by returning part of the capital to its shareholders.
4 - In case of Reservations.
47) What dose Floating means?
It is a mechanism where the opening price for the company's shares is determined by the forces of supply and demand. Hence; in this case, the brokers enter the buy and sell orders regardless the limits of the share price.
48) What are the cases where the company's share price floated?
1 - Merging
2 - Listing for the first time
3 - Liquidation
4 – Restructuring capital
5 – in case the company's share was not traded for more than 6 months.
49) Can the Internet be used to buy and sell stocks? What are the advantages?
Yes, some brokerage firms provide an Internet Trading service to its clients so that it provides them with the possibility to enter buy and sell orders by this service, and this comes after obtaining the necessary approvals from the concerned authorities. The Internet Trading is organized through “Directives for Internet Trading on the Amman Stock Exchange."
The Internet Trading service gives the investor the opportunity to enter his buy or sell orders by himself directly and quickly through the access made by his broker. This will enable the investor to follow up his entered orders instantly and directly, In addition to improve his investment decisions and opportunities.
50) Does the ASE publish the name of the beneficiaries in executed transactions?
The name of the investor is confidential information in the executed contracts and is not known or disseminated by the electronic trading system, where the system deals with the codes of clients' accounts only and what is disclosed later is the names of the investors who meet the conditions of disclosure.
51) How is the priority given for the orders entered?
All orders entered into the ETS will be displayed in the orders' book according to the priority of prices and precedence of entry.
The priority of execution will be for the buy order with a higher price and for the sell order with a lower price, and in case of price equality, the priority is given for executing the orders by the chronology of entering.
52) How can a foreign investor proceed to trade on the ASE?
Foreign investors should open an account for trading through a member firm of the ASE. Contact details for all members are available on the ASE's website ( www.exchange.jo ) . Also opening an account should include a written agreement between broker and client.
53) Who may enter buy and sell orders in the stock exchange?
Orders may be placed only by the ASE member firms, which must be licensed by the JSC to conduct financial brokerage activities. Some brokerage firms provide internet trading service to its clients, enabling them to carry out the process of entering the buy and sell orders through their own regulations provided to them on the internet.
54) What are the license requirements?
Applicants for a financial brokerage license must:
- be a private shareholding company, public shareholding company, or a limited liability company,
- meet the minimum paid-up capital requirements and present a bank guarantee to the JSC,
- A well qualified management which meets the required levels of expertise and proficiency.
- pay the license fee and annual license renewal fee in accordance with the applicable regulations.
55) Are individual brokers licensed?
Individual brokers employed by brokerage firms must be certified financial professionals, licensed by the JSC. To become a certified financial professional, applicants must meet standards set by the JSC and after passing a training and qualification course that includes a practical training on the electronic trading system used at the ASE.
56) How can foreign brokers or banks become members of the ASE?
Foreign brokerage companies or subsidiary companies of foreign banks may become a member of the ASE by applying for membership after obtaining a license by the Securities Commission.
57) Are the ASE members subject to capital adequacy and liquidity requirements?
The ASE members are required to meet paid-up capital and liquidity requirements set by the JSC and to commit to provide the Commission with a statement of financial affairs, capital adequacy and liquidity.
The broker must have sufficient liquidity in order to meet its obligations. To be licensed to work, the brokerage firms must provide the JSC with a weekly report of their financial position.
58) What are the commissions of dealing on the ASE?
Commissions for trading in equities usually vary between 0.0054 and 0.0074 of value traded. The commission will include (i) the brokerage firm's own commission, which falls between 0.004 and 0.006 of value traded; and (ii) a commission totaling 0.0014 of value traded payable to the key market authorities as to 0.0005 (JSC), 0.0005 (ASE) and 0.0004 (SDC) and levied by the broker on their behalf.
Commissions on bonds traded on the ASE vary between 0.00045 and 0.00095 of value traded. As with equities, this will comprise the brokers' commissions' (between 0.0003 and 0.0008 of value traded).
59) Is there any stamp duty or similar transfer tax?
Jordan imposes no such stamp duty taxes on transactions in securities.
60) Are there any restrictions on converting the proceeds of the sale of securities or on the income generated by them?
61) Are dividends and interest paid on securities subject to withholding tax?
No tax is imposed on distributed dividends. There is no capital gains tax.
62) Are there restrictions or limits on foreign participation in the listed companies?
Generally, there are no restrictions on foreign participation in the listed companies, but there are some restrictions on some certain sectors mentioned in “Regulating Non-Jordanian Investments Regulation for the year 2000", available at the following link: http://www.exchange.jo/ar/node/852
63) how can a foreign investor own a Jordanian securities?
The foreign investor is entitled to possess securities registered by their names so they can set a custodian licensed by the Jordan Securities Commission (JSC).
64) How can a foreign investor access the corporate actions?
Through the website of the ASE or by their broker or custodian.
65) What's the legal liability of the President and the Board of Directors of the company for their default negligence regarding the management of the company?
The President and the Board of Directors of the Public Shareholding Company are liable, jointly and severally to their shareholders for their negligence regarding the management of the company. However, in the case of liquidation and insolvency in assets where the company cannot fulfill its obligations because of the default by the president and the Board members or the General Manager or the auditors – the court shall decide for every liable of this insolvency to suffer the loss wholly or partially according to the case.
66) How are the Jordanian listed companies controlled?
The JSC regulates a “Public Take-over Bid”. which is any bid for the purchase or exchange of 40 % or more of the securities of one Issuer, or it is a general offer made publicly and directly to holders of a class of securities issued by a company to buy some or all of their holdings.
67) Are there investment companies and funds specializing in the Jordanian market? Are they in Jordan or offshore? And how are they regulated?
Yes. There is a group of licensed investment funds. They are operated in Jordan. And they are regulated according to the Securities Law and the related regulations and instructions.
68)What are the cases in which the Amman Stock Exchange (ASE) calculates reference prices for companies' shares, and the calculation methodologies?
1. Increasing a company's capital by private placement:
By the end of the fifteenth day following the Jordan Securities Commission (JSC) Board's approval date on registering a company's capital-increase shares; the ASE -pursuant to the Instructions of Dealing with Subscription Rights issued by the (JSC)- calculates reference prices for the company's share and for its subscription right as following :
Reference price of the company's share =
(The company's capital before increase × Closing price) + *Issuance proceeds
The new company's capital after increase
* Issuance proceeds = (The number of capital increase shares × Issuance price)
Reference price for the subscription right =
Reference price of the company's share - Issuance price
2. Increasing a company's capital by stock dividends:
By the end of the fifteenth day following the Jordan Securities Commission (JSC) Board's approval date on registering a company's capital-increase shares; the ASE calculates reference price for the company's share as following:
Reference price of the share = The company's capital before increase × Closing price
The company's capital after increase
3. Decreasing a company's capital by redeeming accumulated losses or issuance discount:
Reference price of the share = The company's capital before decrease × Closing price
The company's capital after decrease
4. Decreasing a company's capital by returning back part of the capital to shareholders as cash:
Reference price of the share =
(The company's capital before decrease × Closing price)- Cash returned to shareholders
The company's capital after decrease
5. A Stock split case :
Reference price of the stock = Closing price
The par value of the stock before the split
69) What are the tasks carried out by the custodian?
According to an agreement with his clients, the custodian conducts the following tasks:
• Saving Private Securities of its clients
• Organizing and keeping accurate records of its clients
• Delivery of Securities to the seller's broker and receive securities from the buyer's broker on behalf of its clients
• Sending periodic reports to its clients and informing them of all actions taken by securities issuers and related with benefits, profits and rights belonging to the Securities and then receiving of their own and voting on their behalf.
70) How is the work of local custodians regulated?
To obtain a license to provide custodial services, an applicant must meet similar licensing conditions as brokerage firms. In addition, a firm providing custodial services must meet a minimum share capital requirement of JD 1 million. A custodian must comply with specific custody rules including requirements to: (1) segregate client securities from its own; (2) not use client securities as security against its own commitments; and (3) not cancel the securities without the consent of the client.
71) Are brokers required to segregate clients' assets from their own?
The JSC has been formulating directives that oblige the brokers to segregate clients' assets from their own.
72) What is corporate governance?
It is a set of rules and principles that govern the relationship between the management of shareholding companies, shareholders and parties with interests associated with these companies as part of the regulatory, administrative, legal and financial frameworks, which defines the rights and duties and responsibilities in order to achieve the company's goals and objectives.
73) What are the bases of the rules of corporate governance ?
The rules of corporate governance become one of the most important topics on the economic level in the world. These rules are based on a number of legislations, including:
1 - Securities Law No. (76) For the year 2002.
2 - Companies Law No. 22 of 1997, as amended.
3 - Banking Law No. (28) For the year 2000.
4 - International principles set by the Organization for Development and Economic Cooperation.
5 - Corporate Governance Code issued by the Central Bank.
6 - Corporate Governance Code issued by the Securities Commission.
7 - Directory of Corporate Governance issued by the Insurance Commission.
8 Corporate Governance Code issued by the Companies Control Department.
74) Are the companies obliged with the rules of governance Code issued by the Securities Commission?
Yes, it was decided in the beginning that the application of these rules through the method of “commitment or the interpretation behind the lack of commitment," which means that the companies adhere to the rules in the guide. Hence, in case of not adhering to any of the rules, the company has to clarify the reasons that led to non-compliance with the rule in its annual report. However, this gives the companies more flexibility in practice and sufficient time to adapt to the requirements of the rules of governance in order to promote the awareness of these rules and achieve full compliance gradually.
75) What is the index?
The index is a tool that helps the investor to determine the general trend of stock prices whether increasing or decreasing and measures the changes during a certain period, compared with the other period. It is daily calculated on the basis of the sample of the company shares traded on the ASE; hence, it is considered when making and monitoring a portfolio for the investor.
76) What are the types of indicators that are applied on the ASE?
• Stock Price Index Weighted by Market Capitalization
• Stock Price Index Weighted by Free Float Market Capitalization
• Stock Price Market Index Weighted by Free Float Market Capitalization
77) What is meant by Free Float stocks?
Free Float is a number of company's shares available only for trading where the following stocks are considered unavailable for trading:
• Shares owned by the members of the Board of Directors
• Shares owned by the parent or subsidiaries or affiliates companies
• Shares owned by shareholders owning 5% or more of the company capital
• Shares owned by governments and public institutions
• Treasury stocks
78) What is the applied method to select the companies for the index sample?
A quarterly review for the index sample in March, June, September and January where the sample companies are chosen based on two criteria which are the market capitalization and the number of trading days.
79) What are the main differences between these indicators?
• Stock Price Index Weighted by Market Capitalization
It is a price index taking into account all shares listed for the company on the ASE, whether they are available for trading or not, and multiplied by its price; hence, the full market capitalization of the Company will be considered in calculating the index value .
• Stock Price Index Weighted by Free Float Market Capitalization
This index is calculated on the basis of the company's shares available only for trading (the ratio of free float) multiplied by its closing price; hence, the free float market capitalization are only taken into account when calculating the index value .
• Stock Price Market Index Weighted by Free Float Market Capitalization
It is an index based on the free float market capitalization of the company and measures the performance of each of the three markets (the First, Second and Third Market).
80) What are the available indicators on the market strength and performance?
The ASE publishes a number of financial indicators that measure the overall performance of the market in addition to the performance of key and sub sectors.
The ASE also prepares and publishes daily, weekly, monthly statistics for each market sector and a monthly statistical bulletin, all of which are available on the website of the ASE.
81) What is the formula for calculating the index?
To know the formula for calculating the index, please visit the following web site link http://www.ase.com.jo/en/methodology
82) Where can I find general information on (a) Jordan's economy, and (b) the Jordanian securities market?
The Central Bank of Jordan publishes a comprehensive monthly statistical bulletin including full details of the Jordanian economy. This is available from its website ( http//www.cbj.gov.jo ) in both Arabic and English. The Ministry of Finance also publishes in Arabic and English a monthly report on economic policy and government finance. Relevant information may also be obtained from the Ministry of Industry and Trade.
The JSC issues quarterly bulletins and an annual report.
The ASE publishes a monthly newsletter and statistical bulletin and an annual report, covering varied historical periods.
Available information from the ASE, JSC and Central Bank of Jordan and many other sources is published in both English and Arabic.
83) Where can I obtain historical and current prices for such securities?
For historical prices, please contact with the website of the ASE ( www.exhange .com). For current prices, the ASE website contains a ticker showing the prices of latest trades.
84) Where can additional information on Jordanian issues and issuers be found?
The ASE produces a Companies Guide, which is available through its website ( http://www.ase.com.jo/en/company_guide/information )
85) Is real time market information available?
the ASE website provides live and historical trading information, market watch screen (ASE live) and certain software to disseminate the information where it can be downloaded to your mobile devices in order to enable those who are interested to follow up the market activity and trading anytime and anywhere.
It is worth mentioning that the ASE has a large number of contracts on disseminating information with specialized companies called data vendors whether they are local, regional or global ones such as Reuters and Bloomberg. Under these contracts the ASE supplies the companies with live trading data in order to be analyzed and presented to the interested and investors.
86) Where can I find information about the Securities Law and the regulations and directives issued by the JSC, the ASE and the SDC?
The JSC, ASE and SDC publish all their rules and regulations in both English and Arabic on their websites.
87) How can I contact a broker/dealer in the ASE?
Contact details for all brokers and dealers are set out on the ASE's website ( http://www.ase.com.jo/en/contact-information ).