For the first time in Jordan, the Securities Depository Center (SDC) began using electronic deeds on October 22. The first day implementing electronic deeds, issued 538 deeds, shortening the clearing time of a stock by one day and all brokers have completed their financial settlements on time.
The electronic deeds will create a more efficient and accurate trading environment and will replace the contracts that were previously done manually, reducing the possibility of human error.
With the new system, brokers will enter the information about their clients in an electronic data bank, before trading on the Amman Stock Exchange (ASE). Once the information has been entered, the client will be assigned a number that identifies him. Jordanians will use their national number; foreign investors and corporations will be assigned a 10-digit number.
The electronic deeds allow transactions to be made confidentially, since the buyer does not know the seller's name and the seller does not know the buyer's name. At the end of the trading day, the SDC will receive an electronic daily report from the ASE with all of the transaction that take 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 assigned numbers and the transactions that occurred. The SDC will then deliver the contract to the issuers to ensure that the ownership is authentic.
“After 21 years of trading, the electronic deeds will be a breakthrough for Jordan's capital market. Making a transaction is safer than ever before,” stated Samir Jaradat, CEO of the Securities Depository Center.
The SDC was created in 1999 as part of the restructuring process of Jordan's capital market. It is a private, non-profit institution that oversees the settlement and transfer of the ownership of securities. 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.
During the first year 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. The restructuring process has ensured the Jordanian clearance and settlement system operates with maximum efficiency and minimum risk. — ( Jordan Times )
© 2000 Mena Report (www.menareport.com)