Chapter (1)
In this Law, “company” means a licensed company whose business is central depository and registry activity for securities, and “Central Depository Participants” means the entities stipulated in article 19.
Chapter (2)
The activities of a company include all activities related to that of a securities depository, the clearing and settlement of financial positions resulting from securities transactions, and the transfer of securities ownership by book entry, including:
- The deposit of securities with the company or with any licensed entity;
- The book entry transfer of ownership of securities traded among Participants;
- The recording of a security interest in securities;
- The clearance and settlement of financial positions resulting from securities transactions.
Chapter (3)
The business of a central registry includes all activities related to the bookkeeping of securities ownership and of a security interest therein, including:
- The maintenance of records of the names of the owners of securities, the rights thereto and the disposal thereof;
- The distribution of entitlements of securities deposited with the company, including the principal amount, the proceeds, dividends, redemption value and restructuring payments;
- The distribution of any information and report disclosed by issuers of securities;
- Any service related to the issuance of securities on behalf of the issuer;
Any action required to replace a security upon
Chapter (4)
The ownership of securities deposited with the company shall only be transferred upon the settlement of the transaction in that security.
Chapter (5)
The owner of a security shall have all the rights pertaining to his ownership, provided such security is deposited and registered in his name.
Securities may also be deposited and registered in a person’s name while another person or more are beneficially entitled to all the rights pertaining to such security. In such instances, the person in whose name a security is registered is the “registered owner” and the person entitled to the rights thereto is the “beneficial owner”. Such a registered owner shall have the responsibilities of a custodian under this Law.
Chapter (6)
A custodian bank and any entity who is acting, pursuant to a decree issued by the competent manager and approved by the Capital Market Authority, as a custodian, a portfolio manager or in an other capacity, are the only entities who may be registered owners acting on behalf of a beneficial owner.
In this Law, a “custodian bank” means a bank which issues depositary receipts, evidencing its registered ownership in securities, which are registered and traded on any domestic or foreign stock exchange.
The name and data of any registered owner is recorded in a special register maintained for this purpose by such registered owner pursuant to the rules and procedures specified by a decision of the Board of Directors of the Capital Market Authority.
Chapter (7)
The issuer of a security shall be discharged of its responsibility when dealing with the registered owner. The registered owner shall enable the beneficial owner to exercise all the rights pertaining to the security, including the right to the entitlements therefrom and the financial and other information disclosed by the issuer. The registered owner shall abide by the instructions of the beneficial owner as regards the right to vote, to dispose of the security, and the right to receive the proceeds from such disposal.
Where the registered owner loses its legal status or is declared bankrupt, the registration of securities shall be changed to the name of the beneficial owner.
Chapter (8)
Securities deposited with the company, and the entitlements thereto, shall be deemed to be fungible and interchangeable as if they were of the same type, issue and currency. No Participant shall be entitled to claim to exercise a right or obligation with reference to a particular identified security.
preceding paragraph also applies to all beneficial owners of securities held by a single registered owner.
A registered owner shall vote on behalf of each of the beneficial owners pursuant to their respective instructions received from them.
Chapter (9)
The company may carry out its activity only with respect to securities. Foreign securities shall be listed at the stock exchange in the country of issue.
Chapter (10)
No board member and employee of the company, nor their spouse or minor children may deal in securities except upon the approval of the company’s board of directors. A decree issued by the Capital Market Authority shall specify the rules and procedures of such approval pursuant to the executive regulation.
Chapter (11)
Any security listed on any stock exchange, and any security of any issuer which is the object of a public offering, shall be deposited with the company. Other securities may be deposited.
Where a security is deposited with the company, the registration of the security and the clearance and settlement of transactions in such a security, is effected by the company.
Chapter (12)
The creation and the enjoyment of any right in a security deposited with the company shall only be effected through its book entry system.
Securities deposited with the company may not be withdrawn, except pursuant to such circumstances as may be set forth in a decree issued by the Chairman of the Capital Market Authority.
Chapter (13)
When a securities certificate is dematerialized pursuant to the rules specified by a decree issued by the competent minister, it shall be replaced by one single certificate for each issue of securities and be deposited with the company. Such security certificate shall indicate the quantity or principal amount and type of security, and any other information specified by the Executive Regulations.