JUNE 2013 - FEAS

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FEDERATION OF EURO-ASIAN STOCK EXCHANGES ANNUAL REPORT JUNE 2013NATIONAL DEPOSITORY CENTER OF AZERBAIJANBakhtiyar AzizovChief Executive OfficeFrom this standpoint 2012 was verysignificant and fruitful. As per the resultsof 2012, the amount of assets stored by theNDC has exceeded AZN 6 billion.We are living in truly momentous times markedby extraordinarily significative processes goingon in the world’s financial system. Underthe influence of the most severe economicalcrisis for the last 60 years, we are evidencingthe constitution of the new global financialarchitecture and rules of play within it.While global liquidity shortage and economicdownturn have entered into its new phase,the economic growth dynamics in Azerbaijanwas not affected to the extent it was inanother countries, which was achieved bypurposeful and balanced reforms and promptcountercyclical measures undertaken by theAzerbaijani government, conservative foreignborrowing policy, maintaining stability of thenational currency and mitigating dependencyupon foreign financial markets. The NationalDepository Centre (the NDC) plays a distinctiveand irreplaceable role in preventing importationof the global economic crisis consequencesand in ensuring investors’ high trust andconfidence in the country’s stock market. Atthe initial stage of our development the primarygoal of the organization was to support theprivatization of the state-owned property,whereas our today’s mission has significantlyextended and includes the transformation of thecountry’s securities market infrastructure and itstransition into important functional institution.From this standpoint 2012 was very significantand fruitful. As per the results of 2012, theamount of assets stored by the NDC hasexceeded AZN 6 billion. Also, in order toincrease the quality of provided services NDCexpanded the range of electronic services.Within the framework of the institutionaldevelopment program of capital markets thecontinuous discussions have been conductedwith international organizations and expertsin order to strengthen the NDC’s positionas a centralized and reliable depository ofgovernment and corporate stocks and currentlynew projects are under development. TheTwinning project “Approximation of the legaland regulatory framework for the securitiesmarket of Azerbaijan according to the EuropeanUnion acquis and capacity building for theState Committee for Securities” and “CapitalMarket Modernization Project” were launchedin 2012. No doubt that accomplishing theseprojects will expand the NDC’s horizons.Operational results 2012NDC finished 2012 with an operating profit. 30new contracts with issuers were signed and asa result additional AZN 1 537 000 were involvedin depository. Informartion on 216 contracts withissuers was updated. 4285 transaction with totalvalue AZN 457, 8 mln were registered.225 new issues with total value AZN 889 mlnwere registered on primary market.NDC recorded a profit of AZN 196 649 in 2012with income AZN 1 694 509 and expences 1 497860 (Operational expenses - 1 431 034, incometax expenses - 66 826)Future outlookNowadays the current condition of the stockmarket demands infrastructural and systematicadvancement of the Depository. Havingexamined the contemporary challengescoming from the today’s stock market andanalyzed internal capabilities, the NDC hasworked out a strategic vision and prepared theitemized action plan for the depository systemconversion. The strategic vision of the NDCaims to achieve the following objectives:• Becoming a central institutional body• Applying advanced international standardson securities transactions• Applying standards on corporategovernance• Developing of internal recoursesCONTACT INFORMATIONContact Name Rasim Mammadov E-mail rasim.mammadov@mdm.az Website www.mdm.azAddress 19, Bul-Bul Avenue, Baku AZ1000 AzerbaijanPAGE 94
FEDERATION OF EURO-ASIAN STOCK EXCHANGES ANNUAL REPORT JUNE 2013SECURITIES DEPOSITORY CENTER (SDC) OF JORDANThe SDC plays a vital role in supportingtransparency through an initiative knownas “Data For All, Not Just For Sale”.Khalil NaserChief Executive OfficerAs part of Jordan’s vision towards establishing aprogressive economy and a dynamic investmentenvironment, the Securities Depository Center(SDC) was established as a public utility institutionand began operating in 1999. Ever since the SDCbecame the sole entity empowered the responsibilitiesof registering, depositing, transferring ownership,safekeeping, and clearing and settlement of securities.Accordingly, the SDC built Securities CentralOperation Registry Processing and Information Online(SCORPIO)® system in order to provide variousservices to investors, its members including publicshareholding companies, brokers and custodianssuch services include investor identification andaccount set up, statement of ownership balance,statements of account, pledging, freezing, onlineaccount viewing. The SDC plays a vital role insupporting transparency through an initiative knownas “Data For All, Not Just For Sale”, from this initiativethe SDC provides various services through its websitesuch as the online account viewing, members’ areaand an electronic initial public offering (e-IPO), andelectronic service that enable the investor to viewcorporate actions and all aspects related to it, inaddition to, dynamic charts that provides analysis oftrading.In addition to the information that is provided ina timely, accurate and updated manner such asboard members’ names, holdings and trades, majorshareholders, financial figures and statistical data.In 2012, the SDC has launched new website on theInternet on the address (www.sdcjordan.com), takingin consideration that the current SDC’s website is stillavailable for the time being at the address (www.sdc.com.jo).Another electronic service that the SDC hasintroduced through its new website is web services forextracting statistical data, this service enables users toobtain data automatically with high efficiency throughthe mechanism of direct connection with the SDC byusing (Web Services) technology that enables theusers to store and analyze statistical data.Role of the DepositoryThe Securities Depository Center of Jordan is a publicutility institution established in the Hashemite Kingdomof Jordan by virtue of the Securities Law. The SDCcommenced operation in May 1999 and is the onlyentity in Jordan that is legally empowered to overseethe registration of securities, deposit of securities,transfer of ownership, safekeeping of securities andclearing and settlement of securities transactions.The SDC is one of the most important institutions inJordan’s capital market as it holds the ownershipregister of all public shareholding companies whereownership registration is in the beneficial owner namewhere nominee & street names does not apply. Asa key component in the modernization of the capitalmarket, the SDC implemented a delivery-versuspayment(DVP) settlement protocol. DVP, a globallyrecommended settlement methodology that ensuresthe simultaneous delivery of securities against finalpayment of funds. The ownership is transferred onT+2 and backdated to T, these transfers are final andirrevocable, and financial settlements are currentlyconducted via the Central Bank of Jordan’s Real TimeGross Settlement System (RTGS-JO) which is a centralreal time, gross final & irrevocable electronic settlementsystem, using SWIFT instructions to effect transferswith immediate value. It is worth mentioning that theTight coupling environment set in March 2009 in theJordanian Capital Market, introducing linkage betweenthe SDC & the ASE that in turn, organize trading andreduce risks related to trade’s transactions that in turnpositively reflects on clearing and settlement processat the SDC and reduce risks in the Jordan CapitalMarket. During the latest years, the SDC continued toimprove and enhance the electronic linkage with theinstitutions of capital market in the Kingdom.The SDC also developed the “Securities CentralOperation Registry Processing & Information Online(SCORPIO)” system. SCORPIO, an SDC-designedCONTACT INFORMATIONand implemented system, is bilingual and it providesa complete solution for the registration, deposit andclearing and settlement.The SDC offers different services to investors insecurities including pledging services, providinginvestors with statements of their securities balancesthat show the securities owned by them and theirdistributions among members; in addition to providinginvestors with the ability to freeze their securities inthe central registry. There are no restrictions on theremittance of investment funds into or out of Jordan,all income & capital gained from investment in Jordanare exempted from tax; this includes cash & stockdividends.The most prominent achievement of the SDC isimplementing the business continuity & disasterrecovery plans according to the requirements of theinternational standards and its positive effects on theSDC’s performance such as security, continuity ofbusiness operations, maintaining market readiness,reducing the cost of risk management and serving 24/7of all members with high speed link.Participation CriteriaThe SDC’s members are public shareholdingcompanies, brokers, custodians and any other entitydetermine by the Board of Commission of JSC.Eligible PledgeePledgees are not considered members in that capacityyet. However, it is within the SDC’s plans as soon asthe legal framework for it is approved.IssuersMembership is obligatory for public shareholdingcompanies by virtue of the Securities Law.Size of Guarantee FundJOD 10,570,000 (US$14,895,722) as of 31December,2012.Does the SDC act as a central counter partyNoMemberships in other International OrganizationsAssociation of National Numbering Agencies (ANNA)Africa & Middle East Depositories Association(AMEDA)Federation of Euro-Stock Exchanges (FEAS)Federation of Arab Stock Exchanges (FASE)Central Securities Depositories (CSD)Association of Global Custodian (AGC)Thomas Murray (TM)Legal StatusPublic utility institutionType of Commercial EntityNot for profitRegulated byJordan Securities CommissionForm of SecuritiesDematerialized no physical certificates being issuedin JordanForm of SettlementBook EntrySettlement CycleT+2Turnaround TradesAllowed provided the same broker in the samesettlement cycleNumbering• ISIN CODES complying with the InternationalStandard ISO-6166• CFI Code complying with the International StandardISO-10962* Please refer to page 21 for the Jordan country report.Contact Name Mr. Khalil Naser E-mail ceo@sdc.com.jo Website www.sdc.com.joAddress The Securities Depository Center (SDC) 2nd Floor - Capital Market Building, Al-Mansour Bin Abi Amer StreetAl-Abdali Area, Al-Madina Al-Riyadiya District, Amman, The Hashemite Kingdom of JordanP.O.B. (212465) Amman 11121 JordanPAGE 95
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