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Holding Shares as Security

Date: 20 June 2022


On 25 April, Majid Eshghi, the head of the Stock Exchange Market, announced that a new mechanism is being launched whereby shareholders could electronically present their shares as security. The importance of this type of security is arisen from the fact that the process of pledging the physical assets is usually complex and time consuming. Conversely, stock securities would make the process of receiving loan and pledging before courts much easier and quicker.

Mahmoud Hassanlou, Deputy Minister of Technology and Innovation Development of the Central Depository Company pointed out the method in which shares would be held as securities. According to his statements, the depository company provides information to the banks and the shareholder must refer to the bank application to take the actions related to stock security and receive a loan. With OTP (disposable) SMS, the shareholder’s Sejam has been authenticated and if OTP is entered correctly, the shareholder's share securities will be displayed in the bank application. Afterwards, the shareholder could select its intended shares and enter the number of shares it seeks to pledge.

Consequently, the Central Bank announced the instructions for granting facilities in small amounts up to 200 million Tomans and exchange and non-exchange securities, including stocks, bonds, tangible property and SIM cards. These instructions have resulted from the efforts made by the Ministry of Economic Affairs and Finance and the Stock Exchange Organization in order to help investors to receive facilities.

 

On 25 April, Majid Eshghi, the head of the Stock Exchange Market, announced that a new mechanism is being launched whereby shareholders could electronically present their shares as security. The importance of this type of security is arisen from the fact that the process of pledging the physical assets is usually complex and time consuming. Conversely, stock securities would make the process of receiving loan and pledging before courts much easier and quicker.