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Market Making Activities in The
Qatari Market To Be Launched During 2nd Half of 2017
April 19, 2017
Qatar Stock Exchange and Qatar Financial Markets’ Authority are
currently putting the final touches on market making rules
activities intended to be carried out by the financial services
companies, members in the market after obtaining the necessary
licenses from the QFMA to practice such activities in accordance
with the rules set by the QFMA within the framework of its
efforts to develop the activities and financial services
relating to Qatar’s capital market, and implement the strategic
targets aimed at promoting the Qatari capital market to be an
ideal model of providing financial services according to the
best international standards along with enhancing liquidity for
support and development of the stock exchange.
A
spokesman for the QSE said that carrying out the market making
activity by the licensed financial services firms expected in
the second half of the year 2017 will help enhancing the market
liquidity of eligible securities. According to the rules, the
market maker (the brokerage company which is a member of the
Exchange) shall, pursuant to a license obtained from the QFMA,
provide quotes in one or more eligible securities to enhance its
liquidity in a manner specified in the agreement signed between
the exchange and the market maker setting forth the terms and
conditions the market maker is entitled to comply with.
According to the market making rules, the market maker has to
sign an agreement with the issuer setting the rules and
conditions to be followed in order to enhance the liquidity of
the admitted security of the issuer and should comply with all
the regulations of the Exchange and the market making rules. The
market making activities could be only practiced by the
Financial Services Firm, member of the Exchange, the spokesman
noted.
He
added that the market making rules have specified a number of
criteria and conditions that should be met by the Financial
Services Company for obtaining the market making license from
QFMA. Among those conditions is to have the capability, systems
and controls required for market making; any additional capital
adequacy requirements the Exchange may impose for market making;
the systems, procedures and controls in respect of managing the
risks associated with market making and some other requirements
related to training, and competency of the of the firm personnel
involved in market making.
He stated that according to the rules, the QFMA has the right to
suspend or terminate any Market Maker Agreement in order to
maintain the integrity of securities trading, and that the rules
give the Exchange the right as well to suspend or terminate any
Market Making Agreement in the event of non-compliance with any
of the agreement’s conditions or any breach of Law No (8) of
2012 regarding QFMA as amended, the regulations, rules and
decisions issued in implementation thereof , or the Exchange’s
rules, and shall notify the Authority of measures taken against
such market maker.
The spokesman ended his statement by noting that the Financial
Services Firms may, after the issuance of the market making
rules officially by the QFMA and after meeting all the
requirements, apply to QFMA to obtain the license prior to
signing market making agreements with the Exchange and issuers
wishing to enhance liquidity on their admitted securities.
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