Common Platform Launch between ATHEX and CSE
Athens Exchange (ATHEX) and the Cyprus Stock Exchange (CSE) launching a Common Platform, supporting the markets for both exchanges. During the first day of operation, 7 CSE Members which had been previously accepted as Members of the Athens Exchange (ATHEX) - Remote Members had the opportunity to trade in securities listed on the ATHEX. At the same time, 9 ATHEX Members, which were recently approved as CSE Remote Members as well as 13 Custodian Organizations, had the opportunity to become fully active on the Common Platform. The Common Platform is the result of a long standing cooperation between the companies of the HELEX Group of Companies, with the Cyprus Stock Exchange and aims at the more efficient operation of the two markets through the use of common technical infrastructure and a compatible legal & regulatory framework. The launching of the Common Platform facilitates the common access of the participants to both markets at zero incremental cost, a fact that allows for the increase in transparency of the two markets, taking advantage of the comparative advantages of each Stock Exchange as well as the simultaneous decrease in operating costs through the use of economies of scale. The successful launching of the ATHEX-CSE Common Platform will facilitate and further promote the cooperation and initiatives for the business development of the two markets in the wider region of south-east Europe and the Mediterranean. The development of the Common Platform is being watched with interest by the regional exchanges ever since the initial public announcement of the ATHEX-CSE cooperation.
Publishing Board of Directors Ownership on Websites
The JSC Board of Commissioners decided to publish stocks ownerships by members of the boards of directors of public sharing companies in companies listed at the ASE on the Securities depository Center (SDC) website first www.sdc.com.jo and then on the Jordan Securities commission (JSC) website www.jsc.gov.jo and continuously update this information.
This decision stems from the importance of giving speedy access of information and data to investors and to disclose it directly and not to leave it up to members of the companies' boards of directors to disclose their ownership of stocks or any change that occurs to or not disclosing it at all and thus be held in violation. Moreover, this procedure, in addition to the periodic disclosure that is undertaken by the JSC in line with instructions, provides immediate information about the names of members of the boards of directors of listed companies and their stocks ownership instead of leaving the disclosure of their names and their ownership to the annual report that is issued by the company at the end of the year.
Securities Depository Center introduces new services to investors
A new free of charge service introduced by the Securities Depository Center (SDC) enables investors in Jordanian securities to inquire about and view the balances of their holdings through the SDC website www.sdc.com.jo . Investors can also follow up on their investments and view their deposited securities balances account statements and transactions executed there to, all at the levels of the investors account maintained by the broker. The investor will also view all the data and information entered by his broker such as the permanent address and his address with the broker, in addition to the ownership details including the current balance, free balance and the ownership restrictions (such as pledge, lien), the details of the trades executed by the broker whether buy or sell, the number of shares, average price, amount, date and time of execution as well as other transactions.
Monetary Handling Instructions
The Jordan Securities Commission (JSC) issued an announcement to financial brokerage companies in the ASE informing them of the need to abide by the stipulations of Article (3) of the Standards of Financial Adequacy Instructions of 1995 in terms of the new accounts receivables that arise as of 4/6/2006. The aforementioned Article (3) stipulates that a broker is bound to collect the accounts receivables “client receivables” resulting from the purchase of securities within a period of one week from the date of incurring the debt. The announcement said that the JSC will begin to undertake legal penalties against companies in violation of the Instructions as of 4/6/2006, but did not require brokers to collect their clients' receivables that have been incurred prior to this date. On the other hand, the JSC issued the new Standards of Financial Adequacy Instructions of 2006, the new Instructions will be effective as of the beginning of 2007, but were issued on 24/5/2006, seven months before they take effect, so that companies can correct their status to meet the requirements of the new instructions. The most significant aspects of these instructions include the regulation of monetary handling method of payment or paying the value of securities purchased by clients who opt to purchase securities using monetary handling method, through which the buyer pays beforehand and then repays any remaining amounts the next day of the purchase in line with an agreement. The Instructions stipulate that a broker must verify the availability of sufficient funds for the client interested in the purchase and the ownership of the client interested in selling securities prior to effecting the sale. Moreover, the Instruction committed the financial broker to segregate between the company's funds on one hand and his clients' assets on the other, and to place the clients' funds in a separate account from that of the company's. This will facilitate the supervision and protection of investors' assets and make sure that no brokerage company use clients' funds for company affairs or purchase for its portfolio.
Directives for Purchase Public Shareholding Companies' their Shares (Treasury Stocks)
The JSC Board of Commissioners issued new directives for regulating the public shareholding companies' purchase of their shares (Treasury Stocks). The new directives were issued in accordance with the Securities Law number 76 of the year 2002, which stated that the number of purchased shares must not exceed (5%) of the company's subscribed shares, that this percentage may reach up to (10%) upon JSC's approval, that the amount allocated to treasury stocks must not exceed the company's total retained earnings and voluntary reserves, and the volume of daily demand must not exceed (2%) of the number of the company's subscribed shares in the single trading session, and that the purchase duration does not exceed (30) days from the date of the start of the first purchase. The directives prohibit the purchase of treasury stocks by block deals and these shares do not have any dividend right and are excluded from participation and voting in the company's General Assembly meetings. Moreover, the directives state that the period of keeping the treasury stocks must not be less than six months from the date of the first purchase and not more than eighteen months from that date. The new directives are issued as part of the JSC's continuous review of regulations and directives that control the capital market in order to develop and update them in a manner that enhance the general investment climate in the Kingdom. These directives took into consideration the needs and the interests of the public in the capital market as well as the interests of public shareholding companies and their shareholders.
Directives for Dealing with Subscription Rights
The JSC approved the directives for dealing with subscription rights, which came into effect on April 1. The directives give the shareholders of the issuing company the right to subscribe in the capital increase that are to be issued by the company. According to the directives, the subscription right is considered a security subject to trading at the ASE. This directives aim to preserve the rights of investors who were not able to subscribe and to protect them by upholding their right to do as they wish with their right to subscribe in capital increase, either by selling it at the ASE within a period of five working days from the date of having the right, as stated in the new directives, or by subscribing in the capital increase of shareowners as they stand at the end of the fifteenth day from the date of the approval of the JSC Board of Commissioners' of registering the capital shares. These directives also contribute to providing cash for investors, strengthening the capital market, and raising the level of its performance.
New Margin Finance Instructions
The JSC Board of Commissioners approved the new Margin Finance Instructions to be effective as of mid March 2006. The new instructions come with the JSC's aims to improve the capital market and regulate the financial relationship between brokers and clients. The directives of Licensing of Financial Services Companies and Certified Financial Professionals for the year 2005 had specified two main methods for dealing between the financial brokers and their clients, which are the margin finance and the cash dealing. The JSC licenses financial brokerage firms to undertake margin financing on the basis of specific conditions that include a specific capital requirements and a letter of guarantee, as well as the necessary technical and administration capabilities of the financial brokerage firm to undertake this activity. According to the new directives the financial broker finances part of the value of his client's securities by the guarantee of these securities. The new directives also enable the provision of facilitations for clients by guaranteeing the securities within specific financing ceilings provided by the broker to his client, on condition that it does not exceed one million JD per client.
New Instructions for Issuing and Registering Securities
The Jordan Securities Commission's Board of Commissioners approved new instructions for issuing and registering securities, replacing the previous instructions as of 1/12/2005. The new instructions were issued as part of the regular review and in light of the scientific practice that the JSC under takes in line with the Securities Law number (76) of the year 2002.The new instructions include core amendments, most important of which are:
1. Distinguishing between public issuance and public offering of securities, whereby public issuance means that the issuing party offers to sell new issues of securities, while public offering means that the issuing party offers to sell securities resulting from other than public issuance. The purpose of this distinction is to include stocks resulting from changing the legal status of the issuing company, as well as stocks resulting from privatizing public sector projects and institutions within the concept of the public offering of securities, which requires the preparation of prospectus for stocks intended for sale.
2. Amending the right date for stock dividends to be effective at the end of the fifteenth day from the date of the JSC's approval of registering the securities instead of the tenth day from that date. This gives shareholders time to make their investment decisions about stocks offered or stocks distributed to them, which emanated from capitalization the company's profits and reserves.
JSC Commits Companies to Register Capital Increase Within a Specific Period of Time
In line with the provisions of Article (12Q) of the Securities Law number (76) of the year 2002, JSC commits companies to complete issuance procedures at the JSC and the SDC within a maximum period of ten working days from the date of closing the subscription in the case of private placement for shareholders or specific parties ,and within a maximum period of twenty working days in the case of other issuances, the JSC Board of Commissioners decided that issuing companies must complete procedures for subscribed shares at the SDC that will provide, as of the beginning of January 2006, the technical and technological capability for public shareholding companies for an immediate authentication of subscripted shares at the SDC as they develop through a special system for issuer. The decision also committed the issuer to complete issuing procedures during the subscription period whether the subscribed shares were fully covered or not.
SDC develops System for Securities Issuers
The Securities Depository Center (SDC) developed the electronic system that is designed for the usage of securities issuing parties in private subscriptions. This move stems from the SDC's policy to develop the Jordanian Capital Market, particularly in relation to the fast and accurate registration of securities. The move also aims at enabling public shareholding company that offer shares for private subscription to document these subscriptions directly at the SDC database, which in turn speeds the process of registering shares offered for raised capital at the SDC. This system also aims to save time and effort for the public shareholding company in the preparation of the subscribers record and avoiding mistakes during this process, in addition to having utmost speed in the registration of the new shares at the SDC and being informed first hand on the progress of this subscription. This will in turn contribute to organizing private subscriptions, as the SDC is planning to create a record for the shareholders who have the right to subscribe in the new shares as they stand at the end of the fifteenth day from the date of JSC's approval of the irregistration. The system will calculate the number of shares in which a shareholder is allowed to subscribe according to the capital increase percentage, which will enable the company to enter the record of shareholders and register the number of shares subscribed to by each shareholder as it develops. The system will not accept entering numbers of shares more than a shareholder is allowed to subscribe in. The role of company will be limited to entering the number of subscribed shares and the date of subscription.