The removal of the Securities’ material character and the adoption of the Central Depository system brought about an important evolution of the concept of Custodianship Contract which is considered as one of the most important services rendered by financial markets’ practitioners and professionals. This study aims to illustrate the effects of such removal and the consequences of transforming these securities from certain paper certificates into identical electronic journal entries. On one hand, this evolution raises several questions relating to the impact of such abolition on the legal nature of the securities subject to the said contract and the legal characterization of the newly established contract. On the other hand, the nature of both the custodian obligations and the client rights raises here other relevant questions, mainly as to whether or not such rights and obligations are personal or in rem.

The study has, thoroughly, answered these questions by analyzing the provisions of the respective Jordanian law compared with other developed counterparts. For this purpose, the study is divided into two sections: the first one is devoted to studying the evolution of the concept of custodianship contract while the second addresses the evolution of its legal effects.

Key words: Securities, removal of the Securities’ material character, Custodianship Contract, Financial Market