Tribune News Network
Doha
As part of the initiatives aimed at developing market mechanisms and enhancing liquidity, and through fruitful cooperation between the Qatar Financial Markets Authority (QFMA), Qatar Stock Exchange (QSE), and the Edaa (Qatar Depository Company), the QSE on Tuesday announced the commencement of Covered Short Selling and Securities Lending & Borrowing activities in the market.
Under the regulatory framework, Covered Short Selling operations will be subject to the Covered Short Selling Rules issued by the QFMA under Board Resolution No. (5) of 2022. Similarly, these operations will be subject to the Securities Lending & Borrowing rules issued by the QFMA under Board Resolution No. 4 of 2022, as well as QSE’s procedures for Covered Short Selling issued under Market Notice No. (026) of 2023 and Market Notice No. (027) of 2023, and the rules and procedures issued by the Edaa regarding Securities Lending & Borrowing activity.
Covered Short Selling will be allowed solely for market makers, liquidity providers, and qualified investors, including members, and any other cases approved by the QFMA. Meanwhile, Securities Lending & Borrowing transactions will be executed in the post-trading system of the Edaa by its members or custodians licensed by the QFMA to conduct this activity under the designation ‘Securities Lending & Borrowing Agents’.
The roles and responsibilities of these agents have been defined under Article (3) of the Securities Lending & Borrowing rules issued by the QFMA.
Qatar Stock Exchange Acting CEO Abdulaziz Nasser Al Emadi highlighted the significance of launching this initiative and its role in enhancing market liquidity and introducing new investment tools that will offer investors improved options for optimal investment in the market. He emphasized that such initiatives are essential for launching the derivatives market and adopting tradable investment instruments. He also emphasized that the availability of these tools, alongside other instruments, would contribute primarily to upgrading the Qatari market to advanced status.
Emadi expressed his gratitude and appreciation to the Qatar Financial Markets Authority for approving the launch of these initiatives. This approval reflects their commitment to aligning with the best practices observed in major global markets.
The Covered Short Selling rules stipulate that transactions can only be executed at a price higher than the last traded price for the same security, where the Uptick Rule will apply to all traders. Brokers will be responsible for ensuring that the Covered Short Selling order is entered into the trading system at a price at least one point higher than the last traded price for that security.
To ensure optimal utilization of the Covered Short Selling and Securities Lending & Borrowing initiatives, Qatar Stock Exchange invites market participants and interested individuals to familiarize themselves with the rules and procedures specific to these activities, outlined in Market Notices No. (026) and (027). If further clarification or additional information is required, individuals can communicate with Qatar Stock Exchange using the contact details provided on the QSE’s website. Notably, starting the following week, the QSE’s management will initiate the release of an educational package, seminars, and training courses related to this initiative in both Arabic and English.
The schedules for these seminars will be announced on QSE’s website and through social media channels.