The Qatar Exchange will enhance its DVP mechanisms in 2013 to support securities lending and borrowing.
In a statement marking the second anniversary since the implementation of the DVP system at Qatar Exchange on April 11, 2011, the exchange said the DVP mechanisms that were implemented have been performing successfully and that in no instance was a securities buy-in or a cash close-out execution required.
When DVP was first implemented in 2011, QE facilitated DVP by introducing trade confirmation procedures for investors under custody and offering a buy in mechanism and a seller compensation scheme. In 2012 QE made some enhancements to the system whereby on the Jan. 22, 2012, investors were awarded enhanced protection for their securities during the dividends season by ensuring the applicability of the DVP process throughout the corporate actions period.
In addition, on April 11, 2012 QE further improved the mechanism by replacing the seller compensation scheme with a buyer compensation procedure which now ensures full protection of the investors'''' assets in case of rejection by the seller.
Qatar is the first exchange in the region to implement such a DVP mechanism.