The Qatar Financial Markets Authority (QFMA) strengthened its legislative infrastructure by issuing new regulations on financial services.
The new laws cover four activities, including liquidity providers, lending and borrowing of securities, rules of guaranteed entry to market’s standards and rules for listing units of investment funds.
Issuing these regulations is consistent with the Authority’s constant endeavour to modernize its legal structure by putting into place procedures that ensure healthy trading transactions and help reinforce the QFMA’s supervisory role in the capital market. The authority is keen to support the market through modern internationally applicable standards to ensure better stability and balance, encourage investment, and provide more attractive opportunities in the market.
“These regulations came following analysis and study of the Qatari market’s current needs and requirements, and will help improve the market’s efficiency, performance and depth, increase the level of liquidity, as well as expand the investment base and prospects in the local climate and will achieve the desired goals,” Nasser Ahmed Al Shaibi, CEO of Qatar Financial Markets Authority, said.
“The QFMA is always eager to follow up on regional and international financial legislation, study the latest developments in market and issue the necessary regulations,” Al Shaibi added.
The list of regulations that have come into effect includes the regulation of liquidity provider activity. This activity helps enhance liquidity of securities listed in the licensed markets. One or more liquidity provider may be licensed to set the prices of selling and buying a particular security in order to increase its liquidity in accordance with the rules and terms specified in the “Liquidity Provider Agreement”. The new regulations also cover the activity of lending and borrowing of securities, which allow licensed financial service providers to lend and borrow the listed securities to settle the failure of transactions, as a first phase.
The guaranteed entry to market activity allows licensed financial services companies to perform brokerage services for foreign companies, allowing them enter the trading system in the exchange market by using the brokerage firm’s direct connection line, in accordance with specific regulations and standards for the purpose of buying stocks under the umbrella of the brokerage firm’s transactions.
The regulations governing last activity concerns the rules regarding listing units of tradable investment funds and issued for IPOs.
The above laws included a number of items of definition which clarify the nature of the related parties, the scope and nature of the work referred to in the new law, a statement of the conditions of the activities to which the new laws shall be applied, and the role of authority in managing the activities of concerned parties in the light of the mentioned regulations.
Nasser Ahmed Al Shaibi extended thank to all parties which contributed to issuing these regulations, namely, Qatar Central Bank, Qatar Exchange, Qatar Financial Centre Regulatory Authority and Ministry of Business and Trade.