The Qatar Financial Market Authority (QFMA) has granted custody licenses to Qatar National Bank (QNB) and Standard Chartered. The banks this month signed a depositary agreement with Qatar Exchange to start activities. The licenses, mentioned in circular from the Minister of Economy and Finance, which also introduced several financial market reforms in the circular, come as the country seeks to enhance its post trade infrastructure in order to attract further liquidity.
The banks join HSBC and State Street as the four providers of custody services in the Qatari market. Increasing the number of custodians in the this market is a key element of the Qatar Exchanges (QE) strategy to enhance the services provided to local, regional and international investors.
Andre Went, CEO of the QE said the development is a major step towards increased post-trade efficiency by offering more options to the institutional clients and high net worth investors, and making services more competitive.
Adel Khashabi, QNB GM Asset and Wealth Management, said: We are pleased to receive custody license from QFMA and start offering custody services working closely with QE.
Khashabi added: Custody services complements our investment advisory, asset management and trade execution capabilities and enhances our financial services value proposition in Qatar and beyond.Commenting on the expansion of custody offerings, Charles Carlson, chief executive for Standard Chartered Bank in Qatar said: We were the first bank to start operations in Qatar and now, on the same lines, we are pleased to be the one of the pioneer banks to officially receive a Custody License from the Qatar Financial Market Authority QFMA.
Shikkoh Malik, regional product head of Investors and Intermediaries, Standard Chartered, MENA added that the bank has ambitious plans to continually expand its product portfolio for investors and intermediaries across the region to ensure clients requirements are proactively catered for.
Standard Chartered recently expanded its coverage for investors and intermediaries from its regional hub in the Dubai International Financial Center to more than 40 markets across Asia, Africa and the Middle East (MENA).
In parallel with the granting of custody licenses, Minister of Economy and Finance, announced a series of reforms transferring governance of the stock market from the QFMA (the countries main stock market regulatory authority) to the Qatar central bank, lengthening the settlement time for institutions stock trades and expediting the creation of banks brokerage arms. The transfer of regulatory authorities is seen as another monitoring channel placed upon the QFMA.
In addition, some local investors on the stock exchange would be given more time to settle trades. A decree asked brokers to grant trustworthy Qatari establishments and individuals T+3 settlement. Qatari investors previously had to make upfront payments before orders could be executed. The QFMA will consider a list of recommended clients, companies or individuals from brokers for approval.
The ministry also urged the Qatar Financial Centre to encourage companies registered with the center to list themselves on the stock exchange, with priority for companies at least 51% owned by Qataris.
Separate to these reforms but key to Qatars efforts to attract liquidity, the country has set up an investment fund to attract foreign institutional investors to the region, sources have told Global Custodian. The fund is understood to have assets under management of $2 billion.
(JDC)