FAQ
Account opening:
Who can open an account?
Both Individuals and companies are entitled to open brokerage and margin trading accounts. An individual has to be over 18 years of age to open an account, otherwise an account for an under-aged individual has to be opened and managed by a guardian.
Who is allowed to open an account?
Any Jordanian or foreign nationality, irrespective of their country of residence, is allowed to open an account.
How to open a brokerage account for an individual?
A person interested in opening an account at Al Hekma should fill/provide the following documents duly signed by account holder:
- Opening Account Application Form for Individuals. (Link to form)
- Introduction Request for the Depositary Center System
- Securities Trading Agreement at ASE.
- Trading by Fax Authorization (if required).
- Legitimate Account Sources of Funds Undertaking.
- Specimen Signature Card.
- ID copy for Jordanians and attested passport copy for foreigners.
Account holder can personally open an account at Al-Hekma Offices, or fax all documents to Al-Hekma
How to open a brokerage account for a company?
A company interested in opening an account at Al-Hekma should fill/provide the following documents: duly signed by authorized person(s) over the account:
- Company Registration Certificate
- Memorandum of Association
- Board Resolution authorizing individual(s) to open and/or manage and/or trade account including authorization levels if applicable
- Opening Account Application Form for Companies (link to form)
- Introduction Request for the Depositary Center System
- Securities Trading Agreement at ASE.
- Trading by Fax Authorization (if required).
- Legitimate Account Sources of Funds Undertaking
- Specimen Signature Card
- ID copy for Jordanians and attested passport copy for foreigners.
Authorized person(s) can personally open an account at Al-Hekma Offices, or fax all documents to Al-Hekma.
How to open a margin trading account for an individual?
A person interested in opening a margin trading account at Al Hekma should fill/provide first the regular documents needed for a brokerage account, thereafter the client should sign the following documentation:
- Margin Trading Stock Financing Facility Agreement.
- JSC''s guidelines for Margin Trading (Each page to be signed)
Margin trading account holder can personally open an account at Al-Hekma Offices, or fax all documents to Al-Hekma
How to open a margin trading account for a company?
A company interested in opening a margin trading account at Al-Hekma should fill/provide first the regular documents needed for a margin trading account, thereafter the client should sign the following documentation:
- Margin Trading Stock Financing Facility Agreement.
- JSC''s guidelines for Margin Trading (Each page to be signed)
Authorized person(s) can personally open an account at Al-Hekma Offices, or fax all documents to Al-Hekma.
How long does it take to open a brokerage account and how is the Securities Depositary Center ( SDC) investor number issued?
Account can be opened in the same day. Al-Hekma will apply to SDC for an investor number, once number is issued Al-Hekma can open an account for the client. In the case a foreign client already has an account at SDC, then such a number has to be provided to Al-Hekma.
When can a client start trading?
At the next working day.
Can a client maintain more than one trading account at Al-Hekma?
A client can maintain at Al-Hekma two different types of trading accounts, a spot (brokerage) account and a margin account.
Is there a minimum amount that should be kept in the brokerage account?
No minimum amount is required.
Can a client maintain more than one trading account at different brokers?
Yes, a client can maintain more than one account at different brokers.
General
How often is a statement of account issued?
A statement of account is issued on quarterly basis and upon request, and can be sent to a client by fax or e-mail
Which bank does Al Hekma for Financial Services deal with?
Jordan Commercial Bank(Commercial Complex Branch)
A/c number: 0102222/001/1400/000,
Swift Code:JGBAJOAMXXX
How can a client credit his/her account at Al Hekma ?
A client can deposit cash and/or draft or transfer funds to any of Al-Hekma’s accounts mentioned above. Thereafter a client should send by fax a copy of the bank’s credit or transfer slip to Al-Hekma. A client can also deposit cash funds up to JD 10,000.- directly into his/her account at Al-Hekma.
Can Al-Hekma issue a cheque with another person''s name?
No, cheques are only issued in the name of the account holder.
What are the Stocks traded by Al Hekma?
All listed companies at ASE.
How to buy stocks through Al-Hekma?
Once a brokerage account is opened, a client has to give a buying order for Al-Hekma provided sufficient funds are available in the account.
How to sell stocks through Al Hekma?
If stocks are already in clients account, or otherwise bought by AL-Hekma, then the client just has to give a selling order for Al-Hekma, otherwise, the stocks have to be transfered first to the client's account at Al Hekma before taking any action.
How can a client transfer stocks to Al Hekma?
A client has to fill an application form (link to the from) and deliver it to Al-Hekma or send it by fax. The SDC will transfer stocks to the clients account with Al-Hekma.
Can a client place an order to buy/sell before or within the trading hours?
A client can put orders during the opening phase of the market (9:30-10:00 am) and during trading hours (10:00-12:30).
How is an order executed at ASE?
Once a client puts an order with Al-Hekma, the order will be entered into the electronic trading system according to its timestamped and will be queued in the system according to the price and time of entering. If it matches with the opposite, then it will be executed. Partial executions can take place as well.
When the Market is open, which orders are executed first?
Orders are executed subject to the following priorities:
- Orders with the best price will always be executed first.
- Orders with similar pricing will be executed first-in first-out.
How does the limited price order works?
In a limited price order, the client specifies the price at which he/she is willing to execute the order; Al Hekma will record the order into the electronic trading system at the specified price, and deal will be executed upon the availability of a matching order.
How does the fixing price order work?
In the pre-closing phase (between 12:15-12:25) of a trading session, the closing prices are determined by the market participants. Any order entered in the system in the fixing phase (between 12:25-12:45) should be at the pre-determined closing price.
How does the market price order works?
In a market price order, the client places an order to be executed at the best available opposite order price (market price) within the permitted price limits.
What is the order validity period?
The client will determine the period during which the order will remain valid. The order will be flushed by the end of the day of until a specified date.
What is the minimum number of shares to be traded ?
Minimum number of shares to be traded is usually one share, except for the Arab bank share, where the minimum number of shares traded is 15 shares. All other orders have to be in multiples of 15.
How can a client verify if the order placed has been processed or not?
Once the client gives the order, it is entered simultaneously to the system. As a rule of thumb, if the market price goes favorably beyond the client''s order price, then usually the order has been executed.
To confirm the execution of the deal, a client can access Al Hekma website after 3:30 p.m. (local time), or contact the broker at any time. In any case, our brokers usually contact the clients to update them on the market and the deals executed.
What is the applicable trading commission?
They are calculated as a percentage of the market value as decomposed as following:
| Name | Minimum | Ceiling |
| Brokerage Firms | 4 | 6 |
| Capital Market Organizations | 1.4 | 1.4 |
| Total | 5.4 | 7.4 |
Can a client trade in stocks while out of HKJ?
Yes, trading orders can be placed by phone or fax or e-mail. When a client places an order by phone with one of Al-Hekma brokers, the broker will verify first the caller before placing the order. If a trading order is placed by fax, the broker will place an order only if client has signed a fax authorization instructions and he or she has duly signed the fax order. Provided e-mails are accepted
Margin Trading:
What is Margin Lending?
Margin lending allows the client to borrow money from the brokerage firm for the purpose of buying stocks. It permits the client to buy more stocks without the need to put upfront the whole cash.
Why use margin lending?
It''s all about leverage, clients can borrow money and leverage the cash they invest. Margin trading offers the opportunity for the client to amplify returns. If a client picks the right investment, margin trading can dramatically increase the profits.
How much can a client buy in shares against a 50% intial margin?
A 50% initial margin allows the client to buy up to twice as much stocks as he/she could have with just the cash in the account.
Can a client buy all ASE stocks on margin?
No, not all stocks are eligible for margin trading, JSC releases annually the list of Marginable Securities (link to list of MS).
Is there a minimum amount that should be kept in the margin account?
The minimum amount required to activate the margin account is JD 5000 or an equivalent amount in stocks.
What is the percentage borrowing rate allowed against Marginable Securities?
The client can borrow 100% against the shares in the First Market list, and 40% against the shares in the Second Market.
What is the Maintenance Margin at ASE and how is it calculated?
The maintenance margin at ASE is at 30%, and it is calculated by subtracting what the client owes Al-Hekma from the value of marginable securities. The remaining amount which represents the client’s contribution is called the "Equity in the Account”, and this amount should not drop below 30% of the market value of the marginable securities.
What is the buying power?
The buying power is the amount of JDs in which a client can buy shares on margin, taking into account the daily fluctuations in the stock prices and the 30% maintenance margin.
What is the Margin Call?
When the Equity in the Account drops below the Maintenance Margin of 30%, Al-Hekma will require from the client to immediately add cash to the account, or otherwise sell just enough shares to bring back the Maintenance Margin to 30%, this is known as the Margin Call.
What happens if the client does not meet the Margin Call?
If a client does not meet the Margin Call, Al-Hekma is then obliged under the JSC regulations to immediately sell just enough securities to bring up the Maintenance Margin to 30%, or deposit extra shares or sell.
Is margin trading risky?
Yes, margin trading is risky, especially when stock markets are going down. Leverage is a double-edged sword, for it amplifies gains and losses in the same degree. If a client does not have extra cash to deposit in his account at the time of margin call, then the brokerage will start liquidating the shares. In other words margin trading may result in clients losing their stocks when markets are dropping.
