The Qatar Financial Market Authority (QFMA) has approved certain amendments of the Qatar Stock Exchange (QSE) rules relating to market maker and liquidity provider, a move that is seen to greatly benefit the asset management industry.
Through the amendment, the QSE seeks to also ensure higher quality and flexible regime relating to disclosure. In this regard, the QFMA gave its nod on the amendments of the QSE Rulebook relating to market maker, liquidity provider and disclosure of financial and non-financial statements of companies through the unified electronic disclosure system.
These amendments regarding the market makers and liquidity providers have been made in compliance with the liquidity provider rules issued previously by the QFMA.
As per the QFMA website, a market maker shall sign the market maker agreement with the market before commencing any activity as per the agreement form approved by the QFMA. A liquidity provider shall not be a market maker for the same securities, but securities may have more than one market maker.
The move comes especially in the backdrop of Qatar inviting many financial powerhouses across the globe to make it as a wider platform for their entry into the Middle East region.
The market makers, who lift up market liquidity by standing ready to buy and sell securities at any time of day, make profit on the difference between the bids and ask prices on their trades.
Market liquidity expands with decreasing volatility of stock prices and order flow. The move by the QFMA comes in the backdrop of a recent joint report of the Qatar Financial Center and Refinitiv that highlighted the need for private pension schemes, which present new growth opportunities for Qatar’s asset management industry.
The need for strengthened market makers comes in view of more exchange traded funds expected to be traded on the QSE and that the bourse is toying with the idea of allowing derivatives trading in the future.
The QSE began introducing alternative investment products with the introduction of two ETFs, which were met with high international demand with two more on the horizon.
The QSE was earlier in talks with an Asian borrower for an ETF based on sovereign fixed income risk. At present, there are two ETFs, sponsored by Doha Bank and Masraf Al Rayan, respectively. The QSE is also in talks with NASDAQ for the cross listing of ETFs.
With regard to the QSE listed companies disclosures through the unified electronic system, QFMA emphasised that the system aims to facilitate the disclosure process with greater efficiency and flexibility for the financial and non-financial statements required from the QSE listed companies (issuers).
The new disclosure system would provide the information in the appropriate and timely manner, thus contributing to the development in the disclosure quality on QSE, said the QFMA.
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