On 01.10.2006 Dr.Al Assad, the President of Syrian Arab Republic issued Decree 55 (Stock Exchange Act) establishing a market for the trade of securities, known as the Damascus Securities Exchange (the Exchange).
The Exchange is a public institution. It is self financing although the setup cost and deficit are largely financed by Governmental loans. The intention is ultimately to transfer the Exchange into a shareholding company.
Management: The exchange would be controlled by a Board of Directors which consists of 9 members .These members would be named by the Prime Minister upon a suggestion from The Syrian Commission on Financial Market & Securities. The Board consist of :
· Two members who represent two Corporate Firms that issue securities, members in the exchange.
. Two members who represent two Brokerage Firms that are authorized by the Commission.
. Three members who are experienced and have qualifications in Securities Exchange and these are chosen by the Board of Commissioners.
. A member who represents the Syrian Commission on Financial Market & Securities.
. A member who represents the Central Bank of Syria.
A Chief Executive Officer and a Vice Executive officer is appointed for the exchange .They are appointed by the Prime Minister by a recommendation from the Syrian Commission on Financial Markets & Securities and upon a suggestion from the Board of Directors. They are chosen by their Educational Qualification and Work Experience in the management of securities exchange. They should posses a PHD or Masters Degree in Economics or Financial Market.
Financial Resources: The exchange financial resources consist of the following:
1. Membership Fees or The yearly fees.
2. The trading commissions that the exchange gets through the selling and buying transactions.
3. The amounts that are assigned to the exchange by the government.
4. The donations that the exchange gets from any agency that the Commission approves.
5. The fines that the exchange gets from penalties that occurred.
6. Any other resources approved by the Commission.
Membership: Membership of the exchange would be mandatory to the Brokers approved by the Syrian Commission on Financial Market and Securities (except Financial Consultancy Limited Liability Firms), and the Joint Stock companies that gained the acceptance to be listed in the exchange. The membership rules shall define the requirements and the obligations of acquiring the membership.
Securities: The Joint Stock companies that are listed in the Exchange are divided into the following sectors:
1. Agricultural Sector 2. Insurance Sector 3. Banking Sector 4. Industrial Sector 5. Services Sector
In addition to equities, the Exchange will trade Corporate, Governmental and local authority (municipal) bonds. There will also be a provision for the trade of mutual funds (collective investment schemes) and Islamic products (Soukouk).
The Exchange will operate on two tiers:
1. Main market 2. Growth market which consist of: Growth market A and Growth market B
Companies shall be transferred between markets in compliance with the Listing Rules published by the Exchange.
Companies listed on the Exchange will be required to maintain their share registers in electronic form (soft copy). The Exchange will act as the national central registrar for all securities listed on the Exchange.
Trading: Trading take place at the Exchange every Sunday, Monday, Wednesday and Thursday. Initially the trading hours are From 10:30 am tell 1:15 pm in each trading day. This shall increase as the market develops. Trading in equities will be by continuous auction. The exchange in equities will be order driven whereas the market in Governmental Bonds shall be quote driven. Margin Trading, Future contracts and short selling are forbidden in the exchange for now.
Trading is conducted on a central trading floor in Damascus although remote order entry from brokers’ offices is available.
The Exchange assures that the Ownership Restrictions that are mentioned in the exchange registers whether they were written or electronic or any documentation issued by it are an evidence of Trading in the securities exchange.
Clearing and settlement: Settlement will take place on T+2(which means after the trading session in two days); the Exchange will use a single settlement bank which is The Central Bank of Syria through which all brokers will be required to settle the net position of their transactions.
Damascus Securities Exchange was established to facilitate the investment of financial resources. Adding to it, it was established to provide and facilitate the required capital to expand the economical activities by implementing an appropriate trading environment for the trading of securities.