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H.E. Sheikh Bandar Bin Mohammed Bin Saoud Al-Thani, the QCB Governor and the QFMA Board Chairman, issued the Covered Short Selling Rules and Securities Lending and Borrowing Rules as a part of its regulatory and supervisory role over the Qatari capital market sector in the State.
The issuance of such new rules comes within the continuous development and update of capital market regulations and legislation, and in line with the global development of this vital sector, as well its needs at the local level.
The QSE management has expressed its appreciation and gratitude for QFMA role in developing financial services in the market and supporting QSEs efforts aimed at enhancing liquidity and providing diversified set of investment tools for Qatari and foreign investors, as well as increasing the trading volumes and supporting the business of financial services companies licensed by the QFMA.
The QSE management also stressed the importance of concerted efforts among all stakeholders in order to develop the Qatari market and achieve developed-market status on international indices and to enhance investment opportunities for investors of all categories.
The importance of the new rules is that they add new financial services activities aimed at increasing the volume of activities and businesses of financial services companies, raising the ability of such companies to provide various investment alternatives for market investors. This contributes to increasing trading volumes and liquidity rates in the market, maximizing the returns of stakeholders in the Qatari capital market, as well as the possibility of borrowing securities for various purposes, including the establishment of ETF units, executing short selling transactions, or for the purpose of returning previously borrowed securities.
Covered short selling means that any of the authorized persons (market maker, liquidity provider, qualified investor) sell securities either borrowed, or enter into borrowing arrangements, in order to close out an open short position on the settlement date in accordance with these rules.
Securities Lending and Borrowing also means that the lender transferring the ownership of the securities temporarily to the borrower or selling them to the borrower in accordance with the procedures approved for this purpose with commitment or promise from the borrower to return or resell them to the lender upon his request at any time during the time frame agreed upon or at its end unless they agreed otherwise.
