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Qatar Exchange Misnad Al- Misnad CRD Director

Qatar Exchange Misnad Al- Misnad CRD Director. April 2012 www.qe.com.qa. www.qe.com.qa. Qatar: a snapshot. Foreign affairs Qatar is member of the GCC, UN, OPEC, WTO, IMF Host of FIFA World Cup 2022. Population 2 21.3% annual growth 2004-2010 to reach 1.7 million. Oil & gas 3

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Qatar Exchange Misnad Al- Misnad CRD Director

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  1. Qatar ExchangeMisnad Al-MisnadCRD Director • April 2012www.qe.com.qa www.qe.com.qa

  2. Qatar: a snapshot • Foreign affairs • Qatar is member of the GCC, UN, OPEC, WTO, IMF • Host of FIFA World Cup 2022 • Population2 • 21.3% annual growth 2004-2010 to reach 1.7 million • Oil & gas3 • Proven reserves of 85 years at current production levels • Largest supplier of LNG with 14.43% of world reserves (Note: LNG production capacity reached 77 million tons by Dec 2010)

  3. QE History • 2001 Start of electronic trading project to replace manual trading systems. • 2005 Non-Qataris permitted to invest in up to 25% of the shares offered for trading. • 2009 Signed strategic partnership agreement with NYSE Euronext to transform Qatar Exchange into world-class market. • April 2011 • Implementation of DVP • Connectivity • December 2011 • T-Bill market • 1998 Introduction of the Central Registration System. • 1997 First day of trading of securities at Doha Securities Market (DSM). • 2002 Investors able to sell their purchased shares on the same day; approval of a new market index • 2007 Became correspondent of World Federation of Exchanges (WFE). • 2010 launched NYSE Euronext Universal Trading Platform • 1999 Investors were able to sell their purchased shares on the next day following their purchase (T+1)

  4. QIA - QE - NYSE Euronext partnership 80% shareholding of QE through Qatar Holdings 20% shareholding of QE • In June, 2009 QIA and NYSE Euronext formed a strategic partnership agreement – Qatar Exchange. The Exchange is part of a comprehensive national strategy that aims to establish Qatar as a world-class international market and reinforce the Country’s position as regional financial centre by introducing new trading products, technology and international investors and issuers to Doha. Qatar Exchange is regulated by the Qatar Financial Markets Authority

  5. QE Strategy • Develop a successful regional and international exchange with strong domestic roots • Offer diversified range of investment and trading opportunities for investors and members • Provide access to domestic and international investors for listed companies from Qatar and abroad Competitive Advantages • Strength of the economy • Support and commitment from State of Qatar to reform financial & regulatory system • Partnership with NYSE Euronext

  6. QE Strategy • Companies disclosure and IPOs • meet the international standard • Corporate actions • Indices • Cash market: ETFs & bonds • Best trading environment UTP • Liquidity providers • Lending & borrowing • CCP • New trading opportunities • Efficient post trade system Regulation Education • MSCI • Education & Training • Trading hours • Broaden membership base • Local Bank • DMA • Lower barriers to entry

  7. QE: a snapshot • Growth 2004-2011 • Over 200% growth in the market cap • Over 270% growth in number of annual transactions • Investors • Foreign institutions account for 23% of the annual trading turnover • Qatari institutions account for 29% of the annual trading turnover • Over 1200 foreign institutions and funds investing in QE stocks directly QE has been the best performing market in the MENA region for two consecutive years (2010 and 2011)

  8. QE Investors’ Demographics: a snapshot – 2011 Market Capitalization Annual Turnover 8

  9. QE today • 42 listed companies and seven sectors • Total market cap: over $120 billion • QE Index covers 20 companies • Current Members ( Market Share by trading Value – 2011) • SWIFT in place between QE, custodians and QCB • UTP successfully implemented– Sept 2010 • QE is member of the , AMEDA, IOSCO, Arab Exchange Union , WFE

  10. The QE Central Registry Department (CRD) • Fully integrated within QE • 25 Staff • Nasdaq-OMX Equator technology • 3 Custodians: HSBC, Qatar National Bank, Standard Chartered • Dual listing with ADSM(QTEL) • GDR

  11. The CRD’s Missions • Investors Account Openings • Daily Clearing & Settlement Procedure • Cash-settlement Process with the QCB • Exempt (off-market) Transfers • Processing of Pledges and Court Orders • Monitoring & Managing of the Brokers’ Settlement Cap • Corporate Actions • Monitoring the Foreign & Single Ownership Limits • DvP & Fails Management

  12. Corporate Actions Management • The corporate action season is normally Feb-Apr and Jul-Aug • Market has witnessed dividends, bonus issues, rights issue, splits and mergers • Record dates are announced and all trades are settled prior to the record date • Payment date is announced subsequent to ratification of dividend in the AGM/Board meeting • All trading is suspended on AGM date - Resumed AGM + 1 for dividends and rights issue. - Resumed AGM + 2 for bonus issues and splits. • Dividends are distributed by the companies through cheques ,wire transfers and (DDP) new initiative by QE • The CRD updates the securities account holdings against confirmation received from issuer companies in the event of bonus, rights, IPOs etc…

  13. Current Settlement Model (BIS Model II)Settlement Cycle T+3 A transaction between a buyer and seller is matched and its terms (ie, price, quantity, settlement date) are agreed upon Computation of the obligations of each the buyer and the seller is done by the CRD. Cash obligations are communicated to the settlement bank (the central bank). The commercial banks hold settlement accounts of the brokers. Registration department, acting as record-keeper of securities, transfers ownership of the traded securities (depository/registry) Depository Participants or Custodians, acting as safe-keeper of assets, and reports positions. Can participate in settlement process arranging transfer of securities and cash for the settlement process. 1 2 3 Trade Execution Clearing Settlement Bank (QCB) Commercial Banks 4 CSD – Depository / Registry 5 Depository Participants / Custodians

  14. The CRD in Numbers (2011) • 9,371 Exempt Transfers • 1,540 Pledges • 3,694 New Accounts opened • 197,287 Account issued statements

  15. 2012 so far & still to come • Successful DvP Implementation • Buyer’s Compensation Enhancement • New Custodians • Securities Lending Program • VaR-based Risk Management • SWIFT Developments

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