Pledging Securities

The pledging of securities is generally recorded through book-entry in the possession of the client or pledgor for the pledgee (creditor) in the central securities depository system. The release of pledge is made by the pledgee’s (creditor) request or bank as a result of the repayment of the debt or for any reason specified legally. If for any reason the pledgor is not able to meet the demand of the creditor, the creditor will be able to sell the securities according to the agreement.

When bonus issues and right issues relevant to the pledgor are pledged in the pledgee’s name in the central registry system, the dividend and capital increase of the related pledged securities will be specified upon the context of the agreement.

The board of directors of listed companies in Tehran Stock Exchange (TSE) can also buy and pledge some of their own company's shares, and accordingly the name of board member and the amount of the pledged shares will be registered in the central depository system.