Enable AP-Subscription Payment Collection System - 20091114

Total Technologies and Solutions FZ-LLC
When No One Else Has The Answers
Subscription Payment Collection System

(SPCS)
An Automated Process for the Collection and/or Refund of Payments from Subscribers for IPO Shares / Rights Issues in the Kingdom of Saudi Arabia
Page 1 of 9 TOTAL TECHNOLOGIES and SOLUTIONS FZ-LLC - DIC Bldg 13, Office 102-103, P.O. Box 500501, Dubai, UAE Dubai (971-4) 367-0223 - Fax. (971-4) 390-8659 http://www.ttsme.com - solutions@ttsme.com
Title Source of Systems in the Kingdom of Saudi Arabia Target Methodology
Subscription Payment Collection System (SPCS) The CMA as a customer of each of the Domestic Banks IPO/Rights Issue Subscribers as customers of Approved Persons Primary Market Offering Processes (and Rights Issues)
Revision History
VERSION 1st Draft DATE 11/01/2009 AUTHOR Sambu Subramanyam Initial creation SUMMARY
OF
CHANGES
Trademarks All identities referred in this document are trademarks of their respective owners. Disclaimer and Assertion of Property Rights This document is the work of Total Technologies & Solutions FZ-LLC (TTS) and is a CONFIDENTIAL and proprietary document. Total Technologies and Solutions FZ-LLC presents this document with the understanding that the intellectual property rights and the confidential information continued herein will be respected. Total Technologies and Solutions FZ-LLC understands the importance of this document and has endeavored to be accurate, but is not liable for any errors or omissions herein. Confidentiality Agreement Total Technologies and Solutions FZ-LLC reaffirms the commitment to any agreement signed with the intended recipient that all information provided, gathered or deduced in the document will not be shared with any third party. All information provided by the intended recipient of this document will be treated as highly confidential and shall not be directly or indirectly disclosed without the prior written consent or request of the intended recipient. Total Technologies and Solutions FZ-LLC will take all necessary precautions to prevent unauthorized disclosure to any third party by its employees. All information contained in this document shall be for the exclusive use of the intended recipient of this document and authorized employees of Total Technologies and Solutions FZ-LLC. Copyright 2009 Total Technologies and Solutions FZ-LLC This is a confidential and proprietary document prepared by Total Technologies and Solutions, Dubai Internet City, Dubai, UAE for use by the intended recipient. All rights reserved. No part of this document may be reproduced, stored in a retrieval system or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the written permission of Total Technologies and Solutions FZ-LLC. THE RECIPIENT AGREES TO BE BOUND BY THE ABOVE STATEMENTS WITH THE ACCEPTANCE OF THIS DOCUMENT
TABLE OF CONTENTS
1 INTRODUCTION ..............................................................................................................................................5
2 SCOPE DEFINITION ........................................................................................................................................5 3 PROPOSED PROCESSES ..................................................................................................................................6 3.1 Subscriber Data Submission Process (subscriber applications submission).........................................................6 3.2 Subscription process Closure, Allocation and Refund Process .............................................................................7 3.3 Funds Collection/Refund/Reversal Process..............................................................................................................8 4 ROLE
OF THE
BANKS
DURING AN
OFFER
PERIOD ...................................................................................................9
1 Introduction
This document introduces a methodology of process automation that, when adopted, will allow subscribers for IPOs and Rights Issues to place their applications with Approved Persons in the Kingdom of Saudi Arabia. The subscriber will also be given the option of allowing the AP to facilitate his payment for shares subscribed. The overall process will insure that subscriber payments are collected (and refunded or reversed when necessary) when the subscriber is participating in Offers in the Kingdom of Saudi Arabia. Also, assurance is given that at no time are the APs in possession of the subscribers funds. The methodology used will insure the least amount of effort on behalf of the Offer participants, i.e. the CMA, the Lead Manager (the AP), the subscriber and the local banks. Al-Elm services will be utilized (as is the norm) to provide verification of NIN and Names and the living status of the subscriber. The benefits derived from the implementation of the processes herein will be: AP will control the submission processes and will have legal responsibility for the offering APs will not have access to the funds provided by the subscriber to purchase shares o All funds will reside in a CMA directed account at each participating bank during the Offer process. Funds will be properly distributed during the Offer period and the cleanup period, i.e.: Reversal of a subscribers funds due to deletion of the application submitted Reversal of a subscribers funds due to removal of invalid dependant entry from an application submitted Refund of excess funds to each subscriber Transfer of funds to the Issuer after transfer of fees to the Lead Managers account
NOTE: Interest/profit accrued on funds held in the CMA accounts during the Offer process will go toward paying the normal fees charged by the banks to maintain accounts for the CMA.
2 Scope Definition
Project scope is identified as follows: Process automation is required to enable APs for managing Offers in the Kingdom, i.e. the subscription process. Process automation identifies the following as part of the scope definition: 1. Enable APs to accept IPO/Rights Issue subscriptions from a new investor 2. Enable APs to accept IPO/Rights Issue subscriptions from a subscriber who has already participated in a previous offer. 3. Enable APs to validate the primary subscriber NIN and Name against the Al Elm database. 4. Enable APs to accept subscriptions using their eChannels (Internet, IVR, SMS) 5. Enable APs in advising banks to transfer subscription amount from an investor account to an account held by CMA (in the same bank), real time or end-of-day transfer. 6. Enable Lead Manager/CMA in advising banks to transfer money from CMA held account to the investor account as part of reversal OR refund amount. 7. Enable APs to complete the subscription process including conflict management and documents /data verifications
8. Enable APs in collecting 100% error free information for the Tadawul upload file creation 9. Empower Lead Manager in managing IPOs/RIs successfully 10. Empower CMA/Tadawul in standardizing the subscription management process
3 Proposed Processes
The following section outlines the proposed process automation:
3.1
Subscriber Data Submission Process (subscriber applications submission)
The proposed process enables the APs to follow a standard approach to collect and process 100% valid subscription information from the investors. Subscribers will have several ways to submit application data when subscribing to an Offer of Shares or a Rights Issue: 1. Use AP services to submit NIN for the retrieval and submission of previous Offer data on file Subscribers can use one of the following channels to complete the subscription process a. website offered by the APs for their own registered investors b. IVR facility offered by the APs for their own registered investors c. SMS facility offered by the APs for their own registered investors d. customer service over phone facility offered by the APs for their own registered investors
2. New or Updated Subscriber Data: Use AP services to submit new/updated subscriber information a. Use the Public Web Site (made accessible by the Lead Manager) to Pre-register Offer data for a new investor i. New investor has to contact the APs branch office to complete the subscription process b. Use APs branch office to submit and process the IPO subscription for a new investor c. Use the Public Web Site (made accessible by the Lead Manager) to Pre-register Offer data for an investor who had participated earlier but wants to update his dependant information. i. Investor has to contact the APs branch office to complete the subscription process
3.2
Subscription process Closure, Allocation and Refund Process
Proposed process enables the APs in completing the subscription process on time for the LM to complete the Allocation and Refund process well within the IPO schedule. Complete automation of the following processes ensures timely completion of the subscription management, Allocation and Refund process. 1. Backlog clearing process 2. NIN conflict management process 3. Reconciliation confirmation 4. Allocation scenario approval from CMA 5. Allocation process 6. Tadawul upload file generation 7. Allocation and Refund file generation for the APs 8. Refund process The process collects the subscription information in a central database and generates an error free upload file containing subscriber data that meets Tadawuls specified data format.
3.3
Funds Collection/Refund/Reversal Process
Subscribers will have two (2) ways to facilitate funds transfer for payment against any number of subscribed shares: 1. Subscriber will direct his AP to transfer the subscribers instructions for a wire transfer of funds (from any subscriber account at any bank in the Kingdom to the CMA account at any bank in the Kingdom)
Application is accepted only after successful completion of NIN validation by Al Elm and the subscription amount is transfer to the IPO account. 2. Subscriber will directly deposit funds to an account (held by the CMA) at his bank
Investor
Application is accepted only after successful completion of NIN validation by Al Elm and the subscription amount is transfer to the IPO account.
Page 8 of 9
TOTAL TECHNOLOGIES and SOLUTIONS FZ-LLC - DIC Bldg 13, Office 102-103, P.O. Box 500501, Dubai, UAE Dubai (971-4) 367-0223 - Fax. (971-4) 390-8659 http://www.ttsme.com - solutions@ttsme.com
Investor submits 1 subscription
When using process number one above, the payment information will be transferred to the subscribers bank of choice using the Lead Managers software solution. Also, the payment transferred to the IPO account will be confirmed using processes within the functionality of the same software. All APs will be given secure user IDs and passwords to enable level specific access to the software being used by the Lead Manager; thereby allowing them to facilitate the processing of subscriber data and funds transfer on behalf of their customers.
4 Role of the Banks during an Offer period

The banks role of the banks in the overall offer process is to provide banking services only to their customers, i.e. APs, Investors and the CMA. The banks will not submit application data and will not direct the movement of investor funds. The APs will collect and submit all application data for verification and validation. The Investor will directly deposit funds to the CMA account at a bank of his choice or submit wire transfer instructions to his AP; of which the AP will pass on to the Investors bank as an immediate transaction. Banks, participating in this process must have the following capabilities: Wire Transfers: Must be in a position to receive wire transfer instructions electronically from their customers or APs (or the APs authorized facilitator acting on behalf of the AP). Debit requests from subscribers (or on behalf of them) will always credit the CMAs account only i.e., beneficiary account number for all debit requests is CMAs account within the same bank. Specific Offer Data Collection: Capture the subscribers National Identification Number (NIN) and the Offer code as part of the wire transfer message (along with the subscribers unique IBAN number) for later insertion into a Bank to Customer Debit/Credit Notification (i.e. similar to a SWIFT MT910). This notification is to be sent electronically to the CMA (or their authorized facilitator acting on behalf of the CMA) immediately on the successful completion of the transfer request. Refunds or Reversals: Receive wire transfer instructions (electronically) from the CMA (or authorized facilitator acting on behalf of the CMA) directing the transfer of funds from the authorized CMA account to a subscribers account to effect proper refund of overpayment or outright reversal of any payments collected.
NOTE: The Lead Managers software verification/validation processes will insure that the destination account shown in the wire transfer instructions is indeed a valid CMA account.

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Total Technologies and Solutions FZ-LLC

When No One Else Has The Answers

Subscription Payment Collection System

Title Source of Systems in the Kingdom of Saudi Arabia Target Methodology

Subscriber Data Submission Process (subscriber applications submission)

Subscription process Closure, Allocation and Refund Process

Funds Collection/Refund/Reversal Process

Investor submits 1 subscription

4 Role of the Banks during an Offer period

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