January 17, 2019      
Last Data Update:16/01/2019

Settlement Guarantee fund

Definition of the settlement Guarantee Fund

A fund comprising all contributions of the settlement members , to ensure fulfillment of the obligations arising from securities transactions executed in Muscat Securities Market , settlement is performed directly against the accounts they have at the commercial banks through settlement account registered in the name of Muscat Clearing & Depository Company with the Central Bank of Oman (CBO).
 
Objectives and Responsibilities
    • Ensuring performance of settlement obligations resulting from transactions of trading listed in Muscat Securities Market ( through ensures that all trading transactions are settled on the Settlement Date )
    • Promoting domestic and foreign investments to trade in Muscat Securities Market ( by ensuring that they get their rights at specified time frame )
    • Fulfilling the obligations arising from dealing in securities where clearing and settlement operations are made with Muscat clearing and deposit according to the following:
      1. Covering the cash deficit resulting from Failure of members to pay for purchased securities
      2. Cover the deficit in securities resulting from Failure of members to deliver or transfer sold securities.
 
Fund Management
The Committee that responsible for the fund management and supervision of the affairs, to be formed according to the text of Article No. (26) of the Regulations of clearing and settlement from (6) members, headed by a representative of Muscat Clearing & Depository, the membership of a representative of the Capital Market Authority , a representative of Muscat Securities Market , representatives of the companies operating in the securities field and another member of the company, according to the following:
 

No

Name

Position

Represent

1

Abdullah bin Ahmed Al Nabhani

Chairman of the Committee

Muscat clearing & Depository

2

Khalfan bin Mohammed Al Sharji

Vice President

Capital Market Authority

3

Bader bin Homood Al Hinai

Member

Muscat Securities Market

4

Salem bin Khamis Al Balushi

Member

Muscat clearing & Depository

5

Ahmed bin Marhoon Al Farsi

Member

Securities companies

6

Hamad bin Mohammed Al Salti

Member

Securities companies

7

Al Julanda Khalid Al Mawali

Secretary

Muscat clearing & Depository

Terms of Reference


 Terms of reference and functions of the Settlement Guarantee Fund Committee :

    • The adoption of general policies for the management of the fund.
    • Guarantee the use of fund in the purposes for which it was founded, and invest in faceted specified in these regulations.
    • Open accounts in the name of the fund with the bank where deposit the fund balances and granting authorizations for these accounts on its name.
    • The conclusion of an insurance policy against the risk of a fund, if consider important.
    • Issue instructions to deposited banks to withdraw money from the fund account within the limits of the deficit amounts to complete the financial settlement process between members.
    • Follow - up and collection of dues of the fund with members and others.
    • Sale or Liquidation of any of the Fund`s assets to serve the interest of the Fund.
    • Borrow or obtain credit facilities to repay the settlement obligations , to ensure that the assets of the Fund and each Member shall bear its own cost of these loans
    • Submit any proposals as it deems appropriate to develop the work of the Fund, to be submitted to the relevant authorities for approval
    • Assign the qualified staff required to manage the Fund and do business
      associated with it.
    • Payment of administrative expenses of the Fund.
    • Determination of the amounts owed by defaulting members to repay their obligations, and covered by the Fund on their behalf

Organization provisions


Terms & provisions governing settlement guarantee fund:-

Clearing and settlement regulation includes provisions governing settlement guarantee fund in chapter v of the regulation.

Article (24)

Establishment of a fund called "Settlement Guarantee Fund" , with legal personality , financial and administrative autonomy , aims to ensure timely settlement of trading transactions , as it include all securities companies licensed to mediation, the committee may grant fund membership to other companies licensed to operate in the securities.

Article (25)

The liability of fund is limited to fulfilling the obligations arising from dealing in securities where clearing and settlement operations are made with the company according to the following:

1. Covering the cash deficit resulting from Failure of members to pay for purchased securities

2. Cover the deficit in securities resulting from Failure of members to deliver or transfer sold securities.

Article (26)

A. The Committee shall be formed by decision of the General Manager of the company managing & supervise the Fund affairs, chaired by a representative of the company and membership of:

· Representative of the authority.
· Representative of the market.
· A second representative of the company.
· Two members of the companies working in the field of securities, nominated from the Association of securities companies

B. The committee is formed for a renewable period of three years, where determine Vice President , Secretary , bonuses and attendance allowance for both Members and the Secretary , as well as the Vice President replaces the President in case of his absence .

C. The Commission shall meet at the request of the President of the Commission, , the Secretary shall address an invitation , Preparing necessary correspondence , records , follow up the implementation of resolutions , and any other work assigned by the Chairman of the Committee.

D. The Committee meeting shall only be valid if at least three members attend the meeting provided be the President or his Deputy, the Committee shall take its resolutions by Plurality majority, in the event of a tie, and the Chairman side prevail.

Article (27)

The committee shall carry out the following tasks:

1. The adoption of general policies for the management of the fund.

2. Guarantee the use of fund in the purposes for which it was founded, and invest in faceted specified in these regulations.

3. Open accounts in the name of the fund with the bank where deposit the fund balances and granting authorizations for these accounts on its name.

4. The conclusion of an insurance policy against the risk of a fund, if consider important.

5. Issue instructions to deposited banks to withdraw money from the fund account within the limits of the deficit amounts to complete the financial settlement process between members.

6. Follow - up and collection of dues of the fund with members and others.

7. Sale or Liquidation of any of the Fund`s assets to serve the interest of the Fund.

8. Borrow or obtain credit facilities to repay the settlement obligations , to ensure that the assets of the Fund and each Member shall bear its own cost of these loans

9. Submit any proposals as it deems appropriate to develop the work of the Fund, to be submitted to the relevant authorities for approval

10. Assign the qualified staff required to manage the Fund and do business associated with it.

11. Payment of administrative expenses of the Fund.

12. Determination of the amounts owed by defaulting members to repay their obligations, and covered by the Fund on their behalf. The Committee may delegate any of its terms of reference to the Chairman or any of its members, the Committee may use Experienced to do certain terms of reference, with the exception of supervision of fund.

Article (28)

Each member of the fund`s commitment to the following:

1. Contribution to the principal of the fund increased by 5% of paid capital , not less than 45,000 OMR forty-five thousand Omani Rial, nor more than (135,000) OMR one thousand one hundred and thirty-five Omani Rial , the member pay additional contribution in case of raising his own capital

2. Additional contribution set by the Committee.

Article (29)

Committee to review and evaluate capital adequacy Fund every three (3) months in the light of the risks to each Member according to the criteria and guidelines developed by the Committee and approved the Authority

Article (30)

If the amount paid by the Fund on behalf of the defaulting Member in accordance with article 23 of this regulation is equal to or less than the value of its contribution to fund, the entire amount is deducted from the Member`s contribution to the Fund If the amount paid over the value of its contribution to the Fund, the Fund is entitled to take the following actions:

1. Deduct amounts paid for the Member of his contribution to the Fund.

2. The Fund has purchased securities that the Member has not paid its value depending on the data and documents provided to the Fund.

Article (31)

The fund shall notify the defaulting member requiring him to meet the obligations of the monetary or securities transactions which he failed to pay or deliver to date , and covered for the benefit of the Fund during a period not exceeding the ninth hour of the day following the day of repayment morning

· If the member fails to timely pay and the client did not pay for the securities referred to the fund, the market would assign a member to sell the securities registered in the name of the fund , and credited the sale proceeds to fund account, as the defaulting member shall bear any differences resulting therefrom for the benefit of the Fund, and return any profits that may result from the sale of the Fund, as well as any profits or revenues owed of securities during the period of registration on behalf of the Fund.

· The defaulting member bears for every day overdue financial obligations resulting from the shortfall determined by the Committee and adopted by the authority, and collect all such amounts for the benefit of the Fund.

Article (32)

If the member does not comply with the outstanding amounts to the Fund in a timely manner, the market at the request of the fund to stop him from trading until repayment the obligations, and the Fund as well as coordination with the company to stop its services for the defaulter member .

Article (33)

Investing of fund in order to achieve conservation and development, and increase investment in the following aspects:

1. Bank deposits.

2. Bonds.

3. Any other financing tools for short and medium term, and high Cash flow. And the investment decision is made by the Committee after reviewing appropriate available alternatives, and focus on liquidity risk mainly when choosing among available alternatives and seeking to ensure a sufficient liquidity fund to pay any received claim.

Article (34)

The preparation of financial statements of the fund independent of the company accounts are audited by the external auditor appointed to audit the accounts of the company

Article (35)

The Fund`s financial year runs from the first of January and ends on the 31st of December of each year

Article (36)

Results and dividend is added to the Member`s contributions to the Fund in proportion to each Member`s cash quotas for total contributions to the Fund at the end of each fiscal year

Article (37)

A member may receive a net of his fund in ninety (90) days of expiration date of its membership in the market after fulfilling all its obligations to the fund, the market and the company

financial statement

 

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3,662 KB
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