This edition of the Qatar Law Update highlights new laws published in the Official Gazette 17 of 2012 as well as other legal news.
Law No. 13 of 2012 Qatar Central Bank and the Regulation of Financial Services
A new law to pave the way for the Qatar Central Bank (QCB) to act as a single financial regulator has been published and is effective from 31 January 2013. The law replaces the previous QCB Law No 33 of 2006 and positions the QCB as supreme authority with overall control, regulatory responsibility and supervisory powers for all financial services providers in the State, including banks, Islamic financial institutions, investment companies, insurance and reinsurance companies, finance companies, exchange houses and such companies currently licensed by the Qatar Financial Centre and the Qatar Financial Markets Authority (QFMA) to conduct financial activities.
The new law states the objectives of the QCB which will act as the competent supreme authority and shall set policies or regulation, control, licensing and supervision of all financial services, operations, markets and activities carried out in or through the State. The provision of any financial service or the conduct of any financial activity or business (including insurance and reinsurance) is prohibited unless a license is granted by the QCB. .
The QCB shall, amongst other things, be responsible for maintaining currency value and monetary stability and shall develop financial services in line with objectives of economic development and growth. It shall also implement procedures to prevent financial crimes.
The Governor of the QCB shall manage the affairs of the QCB, shall carry out the functions of the Minister in respect of the Qatar Financial Centre Regulatory Authority (QFCRA) and shall supervise the activities of the QFMA. A Financial Stability and Risk Control Committee shall be established formed of the Governor and Deputy Governor of the QCB and the Chief Executive Officers of the QFMA and the QFCRA. This Committee shall coordinate the regulatory, control and supervisory authorities in the State with the aim of establishing a consistent and cooperative environment of financial services control and regulation. It shall also propose policies for regulation, licensing, supervision and combatting money laundering.
New Company law proposed
The Council of Ministers has approved a new draft company law previously published by the Ministry of Business and Trade. It is hoped the new law will improve the business environment and increase participation in the stock market, as well as encouraging the creation of new companies and the easy flow of investment. Some of the proposed changes include removing minimum capital requirements for limited liability companies and removing fixed nominal share value and revising some of the procedures for new company formation. The draft law is reported to have considered the requirements of international standards and will aim to encourage more foreign investment. The Ministry of Business and Trade would continue to supervise companies. Market participants were given a brief period in January 2013 during which to review and comment on the draft law before any further modifications are considered by the relevant authorities.
New Civil Defence law proposed
The Council of Ministers has approved a new civil defence law, following on from the recent enactment of Law No.9 of 2012. Further details will follow in the next update.
Launch of Government legal website
December saw the launch of Al-Meezan ,Qatar's first free legal e-portal which makes available for the first time all major Qatari legislation since 1961 together with Official Gazettes, selected court judgments, related legal information, and an Arabic-English dictionary of legal terms. The content of the portal is offered in both Arabic and English, although at present only a small number of laws are available to view in English.
Equity traded funds and REITs
It has been reported that the Qatar Exchange has been working with regulators to introduce equity-traded funds (ETFs) and Real Estate Investment Trusts (REITs) later this year. It is also researching a proposal to issue a Shariah compliant ETF. QE has stated that it is looking to improve foreign investment in Qatar by improving liquidity conditions, expanding the market by offering a wider range of financial products, and developing the current listing procedures and has started the process by introducing a new debt market. The changes form part of QE's wider aim of transforming Qatar's capital market into a leading regional financial market in line with the objectives of the Qatar 2030 National Vision. Direct market access for foreign investment institutions via local licensed brokers is seen as a key part of the strategy as well as necessary to attract stronger and more diverse investment.