Qatars financial regulator has approved securities lending and borrowing regulation, according to a report in regional newspaper Gulf Times.
Like other countries in the Gulf Co-operation Council, Qatar wants to strengthen its capital markets by attracting further liquidity. The market has been working on activities, including regulating liquidity providers, lending and borrowing securities, rules of guaranteed entry to market and rules for listing units of investment funds.
In the first phase, the securities lending and borrowing regulations would allow licensed financial service providers to lend and borrow the listed securities to settle failed trades.
The Gulf Times report included the following quote from Nasser Ahmed al-Shaibi, CEO of Qatar Financial Market Authority (QFMA): These regulations came following analysis and study of the Qatari markets current needs and requirements, and will help improve the markets 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.
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, a QFMA spokesman said.
On the entry of foreign brokerage houses, the QFMA said 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 firms direct connection line, in accordance with specific regulations and standards for the purpose of buying stocks under the umbrella of the brokerage firms transactions.
(JDC)