QSE launches initiative to enhance market liquidity

By Arya M Nair, Official Reporter
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QSE initiative for market liquidity
Rep.Image (Courtesy: QNA)

Qatar Stock Exchange (QSE) has launched Covered Short Selling and Securities Lending & Borrowing activities in the market.

This move comes 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 Qatar Depository Company (Edaa).

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.

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.”

Mr. Abdulaziz Nasser Al Emadi, the Acting CEO of the Qatar Stock Exchange, 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. Such initiatives are essential for launching the derivatives market and adopting tradable investment instruments.

Mr. Al Emadi also emphasized that the availability of these tools, alongside other instruments, would contribute primarily to upgrading the Qatari market to advanced status.

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, QSE 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).

Notably, starting from 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.

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