CmaBoardReleases
Title: 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