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How can I purchase and sell securities at the stock exchange?
Sale and purchase of securities are made through a securities intermediary. The client can not personally carry out the securities purchase process. However, this process is made by a securities intermediary at the stock exchange, according to sale or purchase orders to be issued by the client. In this respect, the clearing company deducts the financial value of the transactions, in question, from the account of the purchasing intermediary and adds this value to the account of the selling intermediary.
How the delivery versus payment DVP process is made? And what are the DVP advantages?
Delivery process is made by and between the selling intermediary and the purchasing company against certain payment. MCDR withdraws the monetary value of the purchase transaction made in the stock exchange from the settlement account of the purchasing company in the clearing bank. At the same time, MCDR withdraws the purchased quantity of securities from the selling intermediary and add same to the account of the purchaser. The DVP's advantages is summarized in the fact that the processes of receiving both the purchaser's and the seller's rights are guaranteed to be properly effected at the same time.
Is the final deposit of securities made at the custodian?
Final deposit of securities is made at Misr for Central Clearing, Depository and Registry, not at the custodian.
Who are the shareholders of Misr for Central Clearing, Depository and Registry?
The shareholders of the company are the central registry members and the stock exchange. In this respect, the shareholding of any member or any joined group of members does not exceed 5% of the company’s capital, pursuant to Article (37) of Central Depository and Registry Law No. 93/2000.
Could the securities deposited in Misr for Clearing be pledged?
The securities owner is entitled to pledge the securities, by virtue of a pledge contract to be concluded with the shares pledge, provided that this contract shall determine the rights and obligations of both parties and that the pledge shall be recorded in the registries of MCDR.
What are the various means for dividends payment?
• Cash payment, through MCDR’s cash outlets, which are spread all over the country. • Transfers to/from the current account of the client. • Issuance of cheques, through the Company’s branches in Cairo and Alexandria. • Delivery to the client's premises, through the Company’s branches in Cairo and Alexandria in cooperation with Citibank.
I have balances under unified code in a tripartite name, but when I obtained my National I/D, it was in a quadripartite name. What should I do?
The client should go to his/her intermediary and provides a copy of the document (personal-family I/D or passport) in which the code in his tripartite name is inscribed as well as the original copy of the National I/D, for re-issuance of another unified code for the balances.
When I obtained a statement of account for my balances and reviewed same with the competent employee, I found that the intermediary carried out a purchase process using an old code. What should I do?
You should go to the custodian to have your balances registered under the correct code and to submit the documents proving your ownership of these balances, such as securities purchase invoices and the I/D used for creation of the code.
I have a quantity of securities, but when I went to receive their profits, I found that the profits were paid for a quantity of securities less than that I have.
Profit payment is made to the security bearer on certain date. In this respect, the client may have made the following: • Purchase could be made after the maturity date. • Sale could be made after the maturity date. In this case, the client may go to the MCDR Customer Service Department to obtain a print out of the statement of account, regarding the security in question, on the dividends' maturity date, to be aware of his actual balance upon payment of dividends.
I own securities issued by an issuer and desire to attend the issuer's ordinary general meeting. How and when should I freeze these shares?
Securities balance should be frozen at least three days before the date of attending the ordinary general meeting. In this respect, the client shall submit an application for freezing shares to his/her custodian, if the balance is placed at the MCDR. (The balances managed by the Misr for Clearing for former bookkeepers, whose license was canceled by the Capital Market Authority are: a- Orbit Stock b- The Egyptian Gulf Company c- The Market Group d- Link e- Premiere f- Stars g- The European Group) h- Safwa In this respect, the client goes to the Customer Service Department to have his/her to freeze his balance for the purpose of attending the general assembly.
I would like to waive my shares to my son. What are the procedures required to be applied?
Waiver is not permitted, as the balance is only related to the original client. However, the father could sell shares to his son by virtue of an executive transaction to be made at the stock exchange through the intermediary (protected transaction).
Who is the person who is legally entitled to access any information related to the client's securities portfolio?
1- The client himself. 2- An attorney, by virtue of a general or private power of attorney permitting the latter to review the balance. 3- An heir, by virtue of an inheritance declaration related to the legator. 4- The natural guardian or the trustee with respect to minors and the curator with respect to the person subject to interdiction. 5- The person authorized to sign on behalf of corporate bodies (companies, corporations, societies...etc).
Is it required to resort to an intermediary to manage securities?
Intermediaries do not manage the client's securities accounts but the custodian is the entity responsible for this process, including the deduction and addition transactions made according to the sale and purchase orders issued by the client himself to the intermediary. With respect to the portfolio management, client should resort to the portfolio management company. It is meant by custodians; the financial institutions which obtain a CMA license to open and manage current accounts for securities.
What are the procedures required to open an account, through custodians, under the central depository and registry system?
The client elects a custodian, and signs a contract with it to determine the rights and obligations of each party towards the other. The elected custodian opens a securities account in favor of the client, receives the securities desired by the client to be deposited in the central depository system, reviews the securities received and complete the procedures for central depository. After approving the securities and adding same by MCDR to the custodian's account, the custodian- in turn- adds the securities to the client's account.
Who are the central depository members?
• CBE-registered Banks and their branches. • Companies operating in the field of securities. • Companies and foreign entities practicing the activity of central depository of securities. • The other entities approved by the Company's board to be enrolled as members, pursuant to the terms and conditions stated in the Executive Regulations of Central Depository and Registry Law No93/2000.
What does the joined group mean?
Means each Central Depository group of members who are all subject to the actual control of the same natural or judicial persons or who agree to coordinate among themselves to jointly vote in the general ordinary or board meetings of the Company. It is conditional that the shareholding of any member or joined group of members shall not exceed 5% of the Company's capital.
What are the entitlements arising out of securities?
It meant by the entitlements arising out of ownership of deposited securities, the centrally paid dividends, revenues, redemption values, restructuring proceeds and any other rights arising out of the shareholder's ownership of securities, such as the right of underwriting which is granted to previous shareholders, the bonus shares payments and the rights resulting from merger...etc.
What are the required documents for me to be able to receive my dividends payments regarding certain security?
In case of receiving payments by the client himself/herself or for his minors, it is required to submit the following documents: • The client’s I/D which is identical to the latter’s unified code. • The original birth certificates of the minors (For the first time payment only) In case the client authorizes another person to receive dividends payments, the following documents are required: • The original copy of the (general or private) power of attorney, which shall provide for receiving the securities dividends payment. • The authorized person’s I/D.
What is the period of time available for the client to receive his/her dividends payments?
Client may receive dividends within five years from the date scheduled by the authority assigned to pay dividends. The client’s right for payment then elapses by prescription, according to Article 375 of the Civil Law.
What are the problems that could face the client at the time of payment?
• The client’s failure to submit complete documents. • If some client’s unified code data is missing. • The custodian’s receipt of the dividends in favor of the client, without the latter’s knowledge.
I purchased securities for the first time and when I obtained a statement of account, I found no balance, how come?
The intermediary's purchase of securities without contracting with a custodian results in non-availability of the balance in the account of the client. It is required that the client moves to and contracts with a custodian, then sends purchase orders to the latter (through the purchasing intermediary) to allocate purchased securities.
When I received dividends payments for my securities, I found that my available balance is less than the actual quantity I own, what should I do?
You may go to the Customer Service Department to know the problem, which may possibly be one of the following: • The issuer' reduction of the capital. • Covering by the settlements guarantee fund of the purchase transaction, due to the insufficient cash balance of the purchasing intermediary. • A securities accounts employee will calculate the reduction rate multiplied by the balance, and review same with the client to confirm the current balance. • Reverting to the intermediary to carry out a new purchase transaction, in case the client requires this quantity, or redemption of the purchase value of transaction. • Obtaining a turnover statement from the legal department for reviewing the sale transaction
When I obtained a statement of account regarding my balances and submitted by National I/D, I was requested by the competent employee to provide a copy of my previous I/D and to update my data, why?
No statement of account, regarding the balances of any client, is given unless the client's data at the stock exchange is identical to the latter's I/D. In this case, the client should bring his/her I/D, a copy thereof, a copy of his /her marriage instrument or a copy of the military service certificate. By these documents, a statement of account regarding the client's balances is issued to the client, who shall then be advised to update his/her data according to his/her I/D.
I have balances which have not been transferred to a custodian, and I want to do so, how?
The following procedures should be taken: First: To complete a transfer order form regarding the portfolio at the MCDR Customer Service Department located in 70, El Gomhorieya St., so as to have the balances transferred, provided that a contract shall first be concluded with a custodian. Second: The custodian may undertake this procedure by virtue of a letter to MCDR, provided that the custody fees, if any, shall be paid.
One of my relatives passed away, and I am entitled to a part of his/her legacy which contain securities, what should I do?
In case the father or the spouse dies and if the legacy contains securities, the following procedures shall be undertaken: First One of the heirs should move to the MCDR Customer Service Department to provide the following documents: • The deceased's original I/D or a copy thereof. • The original death certificate. • The original inheritance declaration. • The heirs' original I/Ds or copies thereof. • The original power of attorney, in case the heirs authorized one of the descendants (sons). Second: To enquire, by virtue of the deceased's I/D, about any balances. Third: A print out of the deceased's balances, if any, is made. Fourth: The client shall be advised to go to the Legal Department at the seventh floor, for distribution of the legacy. Fifth: In case any securities balances are entitled to dividends payments, these payments shall be made to every heir immediately after distribution of the legacy, according to the Law/Sharia and as per each heir's share in the legacy.
How can a legacy comprising of shares and bonds be distributed and what are the documents required?
The legacy of shares and bonds, which are centrally deposited through MCDR - The Legal Department, is distributed as follows: First: The centrally deposited securities legacy: The following documents, together with a legacy distribution application, shall be submitted by one of the heirs or his/her legal representative: • The inheritance declaration (legacy distribution decree) • An updated statement of account regarding the legacy, to be prepared by the custodian. • The unified codes of heirs. • Copies of the I/Ds of the heirs, the legator, the birth certificates of minors, the powers of attorney and the guardianship decree. Second: The non- centrally deposited securities legacies: The following documents, together with a legacy distribution application, shall be submitted by one of the heirs or his/her legal representative: • The inheritance declaration (legacy distribution decree) • The original securities instruments • Copies of the I/Ds of heirs and the birth certificate of minors. • The Powers of attorney • The guardianship decree Note: Copies of these documents as well as the said application are submitted together with their originals for the purpose of verification.
How should I obtain a replacement for any lost shares or bonds?
The client shall submit an application describing the data available to MCDR regarding the lost shares. This application shall be submitted after fulfillment of the following procedures: • Drawing a police minutes at the competent police station regarding the lost shares, their classes and data. • The Company shall then enquire about the lost shares and provide the client with a letter describing the result of enquiry, for submission to the issuer to complete the procedures for issuance of a replacement for the lost shares.
As a result of the process of transferring balances to custodians, my balances were transferred to more than one custodian. I need to have all my balances collected at only one custodian, how?
In order to have your balances collected at one custodian, the following procedures shall be undertaken: First: A contract shall be concluded with the custodian to whom the balances are desired to be transferred. Second: The client shall issue a transfer order to the transferee custodian. Third: All balances deposited with various custodians shall then be transferred to the custodian with whom a contract was concluded.
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