1. These Rules aim to regulate the Depository Centre's activities including specifying the conditions and requirements for the Depository Centre membership as well as the procedures of (i) depositing Securities; (ii) settlement of transactions; (iii) registration of Securities ownership restrictions; and (iv) opening Depository Centre Accounts.

2. All persons dealing with the Depository Centre shall be subject to these Rules including Issuers, Investors, Depository Centre Members and the Depository Bank (as applicable).

3. Unless the contrary intention appears, terms and expressions in these Rules shall have the meaning given to them in the Glossary of Defined Terms Used in the Exchange Rules.

1. The Depository Centre shall provide the services required to (i) deposit Securities; (ii) register and transfer Securities ownership and the rights attached thereto; (iii) settle executed transactions on the Securities and their values. The Depository Centre may take any action or implement any procedure to provide these services.

2. In addition to the services stipulated in the Capital Market Law, the Depository Centre may provide any other service to Issuers, Depository Centre Members, Investors, and the Depository Bank (as applicable( after obtaining the Authority's approval.

3. The Depository Centre may provide any of its services, in accordance with guidelines proposed by the Depository Center and approved by the Authority.

4. The Depository Centre may enter into agreements that it deems appropriate with the beneficiaries of its services.

5. The Depository Centre may apply fees for any of its services, and determine the persons whom are required to pay such fees.

The Depository Centre may, after obtaining the Authority's approval, waive any requirement in these Rules either based on a request from the relevant person or on its own initiative.

1. The Depository Centre Membership is comprised of the following categories:

• (a) Custody category: this category shall be granted to:

  • i. a Capital Market Institution authorised by the Authority to conduct custody activities;

  • ii. an ‘exempt’ person by the Authority; or

  • iii. a Local Bank which is regulated by SAMA which has received a non-objection letter from both the Authority and SAMA to act as a Custody Member;

• (b) Settlement category: this category shall be granted to a legal person which provides the necessary services to perform the Cash Settlement of Transactions; and

• (c) Securities Central Counterparties (CCP) category: this category shall be granted to a CCP which is authorised by the Authority.

2. A person who wishes to obtain Depository Centre membership must submit an application to the Depository Centre using the form prescribed for this purpose.

The Applicant for Depository Center membership must satisfy the following conditions:

• 1. Meet the technical, technological and security requirements, that the Depository Centre determines, which are required to connect to the Depository and Settlement System.

• 2. Have qualified employees, who meet the criteria determined by the Depository Centre, to access the Depository and Settlement System.

• 3. Where the Applicant is applying for Settlement category Membership, it must be a participating member of the Payment System - SAMA.

• 4. Any other conditions proposed by the Depository Centre and approved by the Authority.

1. In the course of reviewing the membership application, the Depository Centre may take any of the following actions:

• (a) request the attendance of the Applicant's representative to address or clarify any queries that the Depository Centre may have in relation to the membership application;

• (b) verify that the Applicant has satisfied the technical, technological and security requirements that are required to connect it to the Depository and Settlement System. The Depository Centre may take any action that it deems fit for this purpose;

• (c) verify the information and documents submitted by the Applicant;

• (d) request any information from any party related to the Applicant; and

• (e) request any additional information from the Applicant.

2. The Depository Centre may apply fees for reviewing the membership application.

3. The Depository Centre may reject the membership application if the Applicant (i) has not cooperated to enable the Depository Centre to take any of the actions referred to in Paragraph 1 of this Article; or (ii) has not paid the applicable fees to the Depository Centre for reviewing the membership application.

4. The Depository Centre shall issue its decision on the membership application within a period not exceeding (30) days from submitting a completed application and satisfying all of its requirements. The Depository Centre's decision in relation to the membership application may be to approve, conditionally approve or reject the membership application. The Depository Centre shall notify the Applicant in writing of the decision and, where the decision is to reject the application, the reasons thereof.

5. Upon the issuance of the Depository Centre's approval on the membership application, the Applicant must sign a membership agreement with the Depository Centre and pay the applicable membership fees.

6. Prior to obtaining the Depository Centre membership and completing the connectivity to the Depository and Settlement System, the Applicant, or any other person, shall refrain from holding themselves as a Depository Centre Member or take any actions that imply that this is the case.

The Depository Centre Member shall be connected to the Depository and Settlement System once it has signed the membership agreement with the Depository Centre and paid the applicable fees in accordance with Paragraph 5 of Article 6 of these Rules.