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                Instructions of Margin Finance

                Issued by the Board of Commissioners of the Securities Commission pursuant to Articles (12), (47) and (123) of the Securities Law No. (76) for the Year 2002

                Article (1):

                These Instructions shall be known as (Instructions of Margin Finance for the Year 2006), and shall come into effect as of 15 March 2006.

                 Article (2):

                The words and phrases stated in these Instructions shall have the meanings assigned thereto hereunder unless the context indicates otherwise:
                The Law : The Securities Law in force.
                The Commission : The Securities Commission.
                The Board : The Board of Commissioners of the Commission.
                Center : The Securities Depository Center.
                The Market : The Amman Stock Exchange or any securities trading market licensed by the Commission. Financial Broker : Any juridical financial broker licensed to practice Margin Finance.
                Margin Finance : A special account for the client with the Financial Broker for the Account purposes of Margin Finance in accordance with an agreement between the two parties.
                Initial Margin : The amount deposited by the client in the Margin Finance Account according to the determined percentage of the market value of the securities at the date of purchase.
                Maintenance : The client’s minimum contribution to the market value of Margin the securities in the Margin Finance Account at any time after purchase.
                Margin Finance : The allowed maximum sum total of the Margin Finance amounts Ceiling granted by the Financial Broker to all his clients.
                Affiliate Company : A company that controls another company or is controlled by the other company or which, together with that company, is controlled by another company.
                Subsidiary : A company subject to the control of a parent company. Company

                Article (3):

                The term “Margin Finance” shall mean the financing by a Financial Broker of a part of the value of the securities in the Margin Finance Account by guarantee of the securities in that Account.

                Article (4):

                A license to practice Margin Finance shall be subject to the following conditions:

                A- The petitioner must be a practicing licensed Financial Broker.
                B- The broker paid-up capital must not be less than the minimum limit stipulated in the Financial Services Licensing, Registration and Regulation Instructions for the Year 2005 in force.
                C- The broker shall submit a bank guarantee to the order of the Commission for a value of (250,000) Jordanian Dinars in accordance with the Financial Services Licensing, Registration and Regulation Instructions for the Year 2005 in force.
                D- The broker shall not have committed material violations to the financial solvency standards during the six months preceding the license petition date.
                E- The Board must be satisfied that the broker possesses the technical and administrative capacities and means to practice Margin Finance and manage accounts related to such transactions.

                Article (5):

                The Board may amend the licensing requirements, conditions and practice procedures of Margin Finance, whereby the Financial Broker shall rectify his position accordingly or liquidate the Margin Finance Accounts within the period specified by the Board for this purpose.

                Article (6):

                The Margin Finance Ceiling shall not exceed (250%) of the Financial Broker’s net ownership rights.

                 Article (7):

                The Financial Broker’s overall financing for any one security in the Margin Finance Accounts with the Broker shall not exceed (100%) of the Broker’s net ownership rights.

                Article (8):

                 The amounts of Margin Finance offered to one client shall not exceed (10%) of the net ownership rights with the Financial Broker or (1,000,000) Jordanian Dinars, whichever is less.

                 Article (9):

                The Initial Margin of any Margin Finance Account shall not be less than (5000) Jordanian Dinars.

                 Article (10):

                The Board may order the Financial Broker to cease offering any additional financing or to cease offering Margin Finance Accounts to new clients in any of the following cases:
                A- If the sum total of the Margin Finance amounts exceeds the ceiling specified in Article (6) of these Instructions.
                B- If the Financial Broker commits material violations to the financial solvency standards issued by the Board. C- If the Financial Broker violates any of the conditions and requirements stipulated pursuant to Article (4) of these Instructions.

                 Article (11):

                The Margin Finance agreement shall provide for the following:
                A- A definition of Margin Finance and the risks that the client may face as a consequence of dealing therein, such as:
                1- The possibility of the client’s full or partial loss of the money deposited in the Margin Finance Account.
                2- The Financial Broker’s right to sell part of the Margin Financed securities in the event the Maintenance Margin percentage falls short of the allowed limit and the failure of the client to cover the deficit in the Maintenance Margin. 3- The Financial Broker’s right to choose any of the Margin Financed securities that will be sold to cover the deficit in the Maintenance Margin.
                B-The securities in the Margin Finance Account shall be considered as security for the Margin Finance.
                C- The client’s entitlement to receive profits and interests upon their accrual, as well as his right to vote at the meetings of the General Assemblies of the companies of which he is shareholder.
                D- The value of interest and commission that the Financial Broker shall collect from the client.
                E- The measures that will be adopted by the Financial Broker in the event the Maintenance Margin falls short of the allowed limit, including the method of notification of the client of such shortfall.
                F-That the client is aware of the Margin Finance Instructions.

                Article (12):

                 The Financial Broker shall open a special account known as the Margin Finance Account for clients who solicit such a service. The Financial Broker must obtain the Commission’s prior approval of both the form of account opening and the form of the Margin Finance agreement.

                 Article (13):

                The Financial Broker shall open a Margin Finance Account at the Center for each client dealing with the Broker in Margin Financing, and shall abide by the instructions issued by the Center in this regard.

                Article (14):

                The Maintenance Margin shall be computed by deducting the total value of the facilities offered to the client in the Margin Finance Account from the total market value of the securities in the Margin Finance Account, divided by the total market value.

                Article (15):

                The Financial Broker shall compute the Maintenance Margin for each account at the end of each working day and shall notify the client immediately if the Maintenance Margin falls short of the allowed minimum limit and shall request the client to cover the deficit within a period not exceeding two working days either by cash deposit or by other securities provided that such securities are allowed to be Margin Financed.

                Article (17):

                If the client fails to cover the deficit mentioned in Article (16) of these Instructions, the Financial Broker may sell such part of the securities in the Margin Finance Account that will restore the Maintenance Margin to its allowed minimum limit.

                Article (18):

                 The client may withdraw any amount of money from the Margin Finance Account that exceeds the Initial Margin of the securities’ market value in such account provided that such money withdrawal does not cause the surpassing of the Margin Finance Ceiling granted to the client and specified in the agreement.

                 Article (19):

                The Commission shall have right of access to all the facilities’ agreements concluded between the Financial Broker and the banks, as well as access to the Financial Broker accounts and balances at banks. The Financial Broker shall authorize the Commission in writing to obtain any data or information deemed necessary by the Commission directly from the banks and the other contracting parties.

                Article (20):

                 The Financial Broker shall not deal in securities issued by the Broker, or by its Subsidiary or Affiliate Companies in Margin Finance Accounts.

                Article (21):

                 The Margin Finance Account shall be used to deal with securities traded on the Market, and shall not be used for subscription to the new issuance of securities.

                Article (22):

                 No guarantees shall be accepted in the Margin Finance Account except for securities deposited in such Account.

                Article (23):

                Notwithstanding what is stated in Article (22) of these Instructions, and subject to the approval of the Commission, the Financial Broker may accept guarantees for the Margin Finance Account in addition to securities in the following cases:
                1- The substantial decrease in the market value of the security in the Margin Finance Account due to exceptional circumstances.
                2- The suspension or cease of trading in the security in the Margin Finance Account for more that seven working days.

                Article (24):

                The Board shall specify from time to time, and in accordance with the standards it sets, the securities allowed to be Margin Financed and the percentages of the minimum limit of the Initial Margin and the Maintenance Margin.

                Article (25):

                 Financial Brokers shall be granted a period of six months, from the date of entry into force of these Instructions, to adjust their status in compliance with the requirements of these Instructions.

                 Article (26):

                 The Margin Finance Instructions No. 1 for the Year 2003 shall be repealed.





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