Qatar sets up central securities depository

07 January 2014

New body will oversee the management of ownership of shares

Qatar has established a central securities depository, its central bank said in a statement.

Qatar Central Securities Depository (QCSD), owned by Qatar Central Bank and Qatar Exchange (QE), launched on 2 January. It will oversee the management and ownership of shares as well as technical activities such as clearing and settlement, the enhancement of the exchange’s trading platform, the registration of financial instruments and will play a role in the launch of initial public offerings.

The depository is also taking over the responsibilities of QE’s central registration department. That includes managing listed companies’ shares, processing off-market transfers, overseeing pledging (lending against share capital) and unpledging activities, and handling corporate activities.

The unveiling of a central securities depository is part of a wider governmental strategy to deepen its stock market, which struggles to attract liquidity.

In June, Yousef Hussain Kamal, Qatar’s economy and finance minister, and chairman of the Financial Markets Development Committee, announced that Commercial Bank of Qatar and Qatar Islamic Bank will be raising their foreign ownership limits. More firms are expected to follow.

Speaking at the MEED Qatar Banking Summit in September, Zain al-Abdin Sharar, director of legal affairs and enforcement at the Qatar Financial Markets Authority, said Qatar has amended the corporate governance code for firms listed on the main market, and is about to introduce new financial adequacy rules for financial service firms. The authority will soon also announce new mergers and acquisitions regulation for listed companies, and is considering introducing rules for margin trading and the listing of real estate investment funds.

Furthermore, the Commercial Companies Law, which is under review by the government, plans to lower the threshold for small and medium-sized enterprises (SMEs) to list.

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