Regulatory Alerts2019-01-01
Circular No. (16) of 2019
The General Authority for Financial Supervision issued Circular No. (16) of 2019 to mandate the minimum contractual requirements for securities lending agreements facilitating short selling operations. The directive specifies mandatory clauses for agreements between lending clients and custodians, as well as borrowing clients and brokerage firms, detailing collateral provisions, return distribution mechanisms, risk disclosures, and protocols for handling preservation orders or client defaults. These standardized terms operationalize Decision No. (268) of 2019 and Chapter Nine of the Capital Market Law's Executive Bylaws to ensure transparency and regulatory compliance in non-banking financial services.
Share