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Qatar Exchange (QE) and Enterprise Qatar (EQ) today announced the launch of the SME Subsidy Programme marking the next stage in the development of Qatari SMEs, the QE Venture Market.
An announcement of the launch was made following the signing of an MOU between the two parties which outlines the basis upon which QE and EQ will cooperate to design and implement the programme to assist potential small and medium enterprises (SME), which meets the SME criteria set by EQ and satisfy the requirements for listing on the Qatar Exchange Venture Market (QEVM), and to increase awareness of the ongoing planning and development of the market reflecting its importance to Qatar and Qatar Exchange.
Qatar Exchange and Qatar Financial Markets Authority (“QFMA”) had previously announced the formalization of the regulatory framework for the QE Venture Market and since that time has been working with stakeholders, including Enterprise Qatar, and market intermediaries to promote the market.
Whilst the regulatory framework is in place, the development of the market required a long-term investment in issuer education and growth in the supporting eco-system. Enterprise Qatar, who has the mandate to support the SME sector, and Qatar Exchange realized the fact that for SMEs in particular the costs of ‘going public’ would be a potential concern and as such sought ways to assist SMEs in their funding of the fees paid to professional advisors.
Mr. Rashid Bin Al Mansoori CEO of Qatar Exchange commented: “We are delighted to have agreed with Enterprise Qatar the basis of a subsidy scheme which will support SMEs in managing some of the costs incurred in becoming a publicly listed company”. He expressed sincere thanks and appreciation to the Financial Markets Development Committee for its decision to implement this initiative through the EQ and its realization of the importance of the role played by the SME’s in developing the economy of the State of Qatar.
Mr. Al Mansoori noted that the preparatory process for listing is complex with multiple work streams and parties involved. “Qatar Exchange has been working hard with many market participants but cannot predict when the market will have its first listing as it is conditional on a large number of external factors including company preparation time, regulatory approvals and market conditions to name a few but the whole financial community is working towards a successful market as soon as possible.”, he said.
Mr. Al Mansoori concluded: “This announcement reflects an important next step toward the development of QE Venture Market for both Qatar Exchange and Enterprise Qatar. After the listing of our initial candidates in the coming months and years we will be working with the financial community to ensure a further pipeline of suitably qualified companies. To build trust in the market, all of these pioneering companies need to be well prepared and this is reflected in the care we are taking in the preparation phase.”
On his part, Mr. Ali Bin Khaled Al Khulaifi, Acting CEO – Enterprise Qatar stated: “Enterprise Qatar is committed to support Qatari SMEs taking them from the idea stage into life to become successful vibrant companies able to stand on their own. Helping SMEs ‘go-public’ is an important and natural part of the services we can offer to SMEs. The Enterprise Qatar Subsidy Program will help SMEs committing to list on the QE Venture Market with a substantial percentage of their initial fees paid to professional listing advisors.”
“Enterprise Qatar has been supporting SMEs through various programs that include subsidized consultancy services to support them grow and sustain their businesses and facilitate a smooth entry for them into the market”, added Mr. Al Khulaifi. “SMEs can benefit from a range of various services such as providing office space and infrastructure to start operations for entrepreneurs who are looking forward to developing their business ideas into potential successful businesses.”
Mr. Al Khulaifi explained: “The rationale of our new SME Subsidy Program is driven from the same rationale that Enterprise Qatar is basing its subsidized consultancy services on. Enterprise Qatar has been offering “Jadwa” that helps SMEs with developing feasibility studies, “Oqood” which provides subsidized legal consultancy, and “Tadqeeq” that provides accounting and bookkeeping services. All these services are conducted through third party consultants where EQ covers 70% of the associated costs. ”
“Enterprise Qatar look forward to this initiative providing an additional catalyst to candidates for the QE Venture Market and adding further to the support Enterprise Qatar gives to the important SME sector here in Qatar. “, Mr. Al Khulaifi concluded.
According to the framework agreement signed today between Qatar Exchange and Enterprise Qatar, any Qatari company which meets both the Enterprise Qatar SME criteria and will meet the QE/QFMA Rules for listing on the QE Venture Market will be eligible to apply for assistance through the Program which will be limited in scope. Each successful applicant will be eligible to receive a percentage of the fees payable to their Listing Advisor.
It is worth mentioning that Qatar Exchange and Enterprise Qatar are currently working with a small number of IPO candidates in order to have them ready for the market as soon as possible. Qatar Exchange declined to identify the companies for confidentiality reasons and on the basis the details may change.
Qatar Exchange recognizes the importance of the SME sector contributing employment opportunities, wealth creation and increased output. Enterprise Qatar in turn represents the focus for much of Qatar’s SME initiatives and as such has been an enthusiastic supporter in the joint initiative. Qatar Exchange and Enterprise Qatar are therefore supporting the sector together through development of the QE Venture Market with the objective of supporting the growth of SMEs. The QE Venture Market is a complement to the existing Main Market which is designed for larger companies with established track records. The characteristics of the market reflect the objectives of allowing SMEs to list and raise capital more easily and cheaply and with less stringent requirements than would otherwise be the case whilst also retaining the trust of the investor base through a structured regulatory framework.
Further information is available on the website for QE Venture Market (www.qe.com.qa/qeventuremarket.) where issuers, investors and market professionals can be briefed on the market’s key features. All necessary information and the key contact points within Qatar Exchange are also available.
