| Article (74) |
A Center known as the (Securities Depository Center) shall be established in the Kingdom. The Center shall be a non-profit public utility entity, and shall have a legal personality with administrative and financial autonomy. As such, it may acquire and dispose of movable and immovable property, and perform all legal acts to realize its objectives, including entering into contracts in its own name. The Center shall have the right to sue and be sued, and to appoint any attorney to represent it in legal proceedings. |
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| Article (75) |
A- |
The Center shall perform the following functions: |
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1. |
Registration, safekeeping, and transferring of ownership of securities. |
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2. |
Depositing securities. |
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3. |
Clearing and settlement of securities. |
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B- |
The Center shall be the sole entity in the Kingdom authorized to perform the functions stipulated in Paragraph (A) of this Article. |
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| Article (76) |
A- |
The Center shall be managed by a Board of Directors and a fulltime chief executive officer. The general assembly, the formation of the Board of Directors, the method of convening meetings of the general assembly and of the Board of Directors and of adopting decisions therein, as well as the authorities and responsibilities of the general assembly, of the Board of Directors, of the executive manager, and of all administrative and financial matters related thereto, shall be regulated by the Center’s by-laws and instructions issued for this purpose. |
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B- |
The chief executive officer of the Center shall be appointed by the Board of Directors subject to Board approval. The chief executive officer shall not engage in any other activity or be a partner, shareholder, or representative of any Licensed Person. |
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C- |
The chairman or deputy chairman of the Center’s Board of Directors shall not be a partner, member of the Board of Directors 52 or of the executive board, nor an employee or representative of any Licensed Person. |
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D- |
No person shall serve both as a member of the Center’s Board of Directors and a member of a Financial Market’s Board of Directors. |
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| Article (77) |
The Board of Directors of the Center shall appoint a certified auditor to audit the Center’s accounts. |
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| Article (78) |
The Center’s organizational structure, areas of activity, membership conditions and requirements, and any fees it charges shall be specified in the by-laws and instructions issued by the Board. |
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| Article (79) |
A- |
Subject to the provisions of Article (5) of this Law, any Issuer shall register at the Center the securities issued thereby, in accordance with the instructions issued by the Center. |
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B- |
The certificates of ownership of securities deposited at the Center shall be cancelled according to the instructions issued by the Center. |
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C- |
Registration and transfer of ownership of securities traded on the Financial Market and the price settlements of such securities between Brokers shall be via book- entries in the Center’s records. |
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D- |
The Center may accept electronic data from its members and from the Financial Market in accordance with its issued by-laws and instructions. |
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E- |
Unless otherwise proven, the entry records and the accounts maintained by the Center, whether in writing or electronically, as well as any document issued by the Center, shall constitute prima facie legal evidence of ownership, registration, transfer of ownership and settlement of the securities, at the price and on the date stated in those records, accounts or documents. |
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F- |
If a lien, or other restriction of ownership resulting from a court decision, is imposed on deposited securities, the Center shall place that restriction in its records on the date of receiving the court decision, unless the ownership of the respective deposited securities has been transferred prior to that date. |
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G- |
The respective rights and obligations of the seller of securities, of the purchaser thereof and of third parties thereto shall be established on the date of concluding the contract at the Financial Market. |
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The Center shall document the ownership of the sold securities and shall enter the transfer of their ownership in the Center’s records, according to instructions issued thereby. |
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I- |
The settlement of the trading contracts of securities deposited in the Center shall be on the basis of Delivery-Versus-Payment. |
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| Article (80) |
A- |
Membership in the Center shall be mandatory for the following entities: |
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1. |
Public shareholding companies. |
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2. |
Legal persons licensed as Financial Brokers or Dealers. |
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3. |
Custodians. |
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4. |
Any other entity determined by the Board. |
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B- |
The Center’s employees authorized by the competent authority may, in respect of the Center’s functions, inspect, and make copies of, the documents and records of any Center member, either with or without prior notice, provided any such inspection be conducted only during business hours. |
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C- |
A member of the Center shall sign a written commitment pursuant to which he agrees to comply with the Center’s By-laws and instructions. |
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D- |
Failure to abide by the Center’s by-laws and instructions or default in the payment of any dues and any financial obligation by any member shall be considered a breach of this law. |
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| Article (81) |
A- |
The by-laws and instructions of the Center, and any amendments thereto relevant to dealing in securities shall be submitted to the Board for approval prior to their being made effective, provided they include the following in particular: |
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1. |
The procedures for registration of securities, transfer of their ownership, and clearance and settlement of the trading contracts related thereto. |
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2. |
Specification of the rights and obligations of the parties involved in the securities clearing, settlement and ownership transfer processes. |
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3. |
The time of the vesting of rights of creditors of the parties to securities trades, including rights with respect to both the cash or cash equivalents and the securities involved, as a result of the process of sale, purchase or ownership transfer. |
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4. |
Information, data, and records that are considered confidential and the persons authorized to have access thereto, by virtue of their job. |
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5. |
Information, data and records that the Center must disclose and the information, data and records that are accessible to the public for viewing and copying. |
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6. |
Standards of professional conduct applicable to the members of the Center, members of the Board of Directors, to the executive manager and the Center’s employees. |
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B- |
The Board may request the Center’s Board of Directors introduce amendments to its by-laws and instructions relevant to dealing in securities as it deems necessary for the protection of investors and the public interest, and within the period specified in the request. At the end of the specified period, the Board may introduce the amendments which it deems appropriate to any of the by-laws or 56 instructions. The amendments shall be effective as of the date set by the Board. |
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C- |
The Board may review the decisions issued by the Center relevant to dealing in securities to ensure their consistency with the provisions of this Law and the regulations, instructions and decisions issued pursuant thereto, and to make the appropriate decisions thereon. |
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| Article (82) |
A- |
The Center shall charge the commissions, fees and other charges provided for in its by-laws. |
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B- |
The Center may impose fines in accordance with provisions of its by-laws and instructions. |
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C- |
Fines imposed in accordance with the provisions of Paragraph (B) of this Article shall devolve to the Center. |
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| Article (83) |
The Center may impose a lien on the securities owned by its members who fail to settle their obligations that relate to the Center’s functions. |
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| Article (84) |
A- |
Notwithstanding what is stated in any other legislation, if a Financial Broker, Dealer or Center member is subject to a bankruptcy, liquidation or sequestration order, the Center, before the commencement of the bankruptcy, liquidation, or sequestration proceedings pursuant to the legislation in force, and according to 57 instructions issued thereby, shall take all appropriate measures to fulfill the settlement of any pending trading contracts to which such member was a party before issuance of that order. Such trading contracts, after the settlement thereof, shall be considered valid against third parties. |
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B- |
Notwithstanding what is stated in Paragraph (A) of this Article, the Board by itself or at the request of a concerned party, and upon good cause shown, may amend or cancel in part or in whole, any of the trading contracts referred to in Paragraph (A) of this Article. |
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| Article (85) |
A- |
Any deficit in the revenues and expenditures account of the Center for any fiscal year shall be covered from the general reserves. If the general reserves are insufficient to cover the deficit, it shall be covered by equal payments from the Center members, these payments shall be credited for members against net future revenues. |
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B- |
Notwithstanding what is stated in Paragraph (A) of this Article, the Center’s Board of Directors may, subject to Board approval, borrow the amounts needed to cover part or the entire deficit. |
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C- |
Upon termination of its legal personality whether by dissolution, liquidation or termination in any manner, the Center’s property shall devolve to the Public Treasury. |
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| Article (86) |
The Center’s funds and rights against others shall be deemed as domanial property, to be collected in accordance with the provisions of the Collection of Domanial Property Law in force. |
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| Article (87) |
The Board may suspend the activities of the Center for a period of no more than one week, or for a longer period subject to the Prime Minister’s approval. |
