Sub-custody guide: Qatar
On May 29 2014, the MSCI upgraded Qatar to emerging markets status. This significant leap was possible due to a series of regulatory and operational enhancements as well as corporate governance measures adopted over the past few years. “These advancements have greatly improved efficiency, and reduced the risk of post-trade securities clearing and settlement,” says Shreen Abeysekera, senior manager, HSBC Securities Services, Qatar.
In May 2014, the Qatar Financial Markets Authority (QFMA) announced new and amended regulations to align Qatar with international regulatory standards, help strengthen its regulatory and supervisory role and boost investor confidence.
These include capital adequacy standards for
financial service companies, rules of licensing and regulating depositories,
M&A rules, amendments to the corporate governance code in the main market
and a new corporate governance code in the venture capital market.
The MSCI reclassification recognised the efforts of the Qatari market to further open internationally. Foreign investors can now own up to 49% of listed Qatari companies. Also, citizens of the six Gulf Cooperation Council (GCC) countries are to be treated as Qatari citizens for the purpose of investing in Qatari companies.
This means that GCC-citizen ownership of Qatari
stocks will not be counted as foreign ownership. The limit was previously
calculated on the free float shares of the company, not on the total issued
capital and usually allowed a combined foreign ownership of no more than 25%.
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