CMA LAW: Circular No. (03) of 2022 Regarding Article (10-9) of Module Eleven of the Executive Bylaws

Based on the CMA’s competence to implement the provisions of Law No. (7) of 2010 Regarding the Establishment of the Capital Markets Authority and Regulating Securities Activities, its Executive Bylaws, and their amendments, and its competence to regulate attachment of securities as stipulated in item (8) of Article (5) of the aforementioned law, and based on its objectives regarding the awareness of the addressees of the law for suitable implementation of it, we would like to provide an explanatory statement on the meaning of Article (10-9) of Module Eleven of the Executive Bylaws of the Law, which stipulates:

 “In the event that Securities and Investment Portfolios are pledged or have preference rights, creditors who own such rights shall be notified of such attachment. These creditors,  as  soon  as  they  are  notified  of  the  procedures,  shall  be  considered attachment creditors by the force of law.”

Where we would like to clarify that the addressees in this Article are the garnishees, such as the Clearing Agency, Record Keepers, Investment Portfolio Managers, Investment Fund Managers and the like, as under the aforementioned Article the garnishee has a continuous obligation to notify all pledged creditors or who holds preference rights in the event of an attachment on the securities bearing such creditors or rights.

Accordingly, it was clarified to all to eliminate any misperception that may occur and to complete the appropriate implementation of the provisions of the Executive Bylaws.

Thank you for your cooperation,

Prof. Ahmad A. Al-Melhem 

Issued on:06/04/2022

Copy of the Official Document

Disclaimer: The information provided on this page is for reference purposes only, visitors are encouraged to review and understand the information provided in the official scanned document attached in the link above (if available). The CMA endeavors to ensure that the information on this page is complete and accurate, but the CMA does not guarantee the quality, accuracy, or completeness of any content at any time. In the event the information on this page is different from the content in the official scanned document attached in the link (if available), the official scanned document attached shall take precedence.