2 Agenda Introduction Objectives Current Market Model Investor Services Issuer ServicesMember Services
3 IntroductionCentral Registration Department is responsible for Securities safe-keeping, registration, depository and stock transfers.CRD Received all Listed shareholders companies data on10/8/1998CRD policy is to Gain investors confidence through applying an efficient control in a secured environment when dealing with investors and all other market members.
4 Objectives Confidentiality of investors and issuers data Deliver accurate information to QE investors and issuers through several reports and interfacesImplement Settlement Risk managementBroker activities controlled by a settlement capBank guarantees to cover the shortage in cash settlement.Trading system and CRD systems, No short selling allow in QE are tightly coupled.SAS Risk Management systemRun daily settlement process
5 Current Market Model3BrokersA transaction between a buyer and seller is matched and its terms (ie, price, quantity, settlement date) are agreed uponComputation of the obligations of each the buyer and the seller is done by the trading department.Brokers execute trades in the market and clear their own obligations on the settlement dayCash obligations are communicated to the settlement bank (now central bank, before it was Doha 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 process124TradeExecutionClearingSettlementBank (QCB)CommercialBanks5CSD – Depository / Registry6Depository Participants / Custodians
6 Settlement Cycle: T+3 Confirmations by T+1 by intermediaries Confirmations by T+2 to the settlement bankSettlement on T+3
7 Current Members Brokers Custodians The Group Qatar Securities Dlala Dlala IslamicIslamic Financial ServicesInternational Financial ServicesGulf Investment Group – GIGHSBC (mainly targeting international investors)
8 Investor Services Account Opening Account Management Performing Stock/Registry transfers by moving shares between QE Registry account and Trading account for the same investorFamily / Inheritance transfersBlocking/Unblocking investors due to incomplete informationPrinting statement of accounts for investors.Printing "To whom it may concern" certificates.Consolidating multiple NIN's for the same Investor.Pledging / Unpledging sharesSplitting shared NIN's by multiple investors.
9 Account Opening Process Investor Application FormAvailable on the QE websiteSupplementary documentation100 QR feeNIN registration once application is processedTrading / Custody account to be opened before commencing tradingAccount is ready for next trading session
10 Issuer Services Maintaining shareholder register for the issuers Providing shareholder register to issuers for AGMsImplementing individual ownership limitsImplementing foreign ownership limitsRestricting board members from trading in their companies during certain periods (AGM)Freezing/Unfreezing shares of Founders, Board members, court order, etc (initial listing period)Corporate Action processingRegistering new shares underwriting to increase capitalSplit/Consolidate shares/Bonus/mergerHelping the listed companies in calculating Cash dividends by sending them their latest investorsChanging ownership limits for listed companies according to the corporate event performed Cash dividends are distributed directly by the issuers
11 Corporate Actions Process The corporate action season is normally Feb-Apr and Jul-AugMarket has witnessed dividends, bonus issues, rights issue, splits and mergersRecord dates are announced and all trades are settled prior to the record datePayment date is announced subsequent to ratification of dividend in the AGM/Board meetingAll trading is suspended on AGM dateResumed AGM + 1 for dividends and rights issue.Resumed AGM + 2 for bonus issues and splits.Dividends are distributed by the companies through cheques and wire transfersThe central registry updates the securities account holdings against confirmation received from issuer companies in the event of bonus, rights, IPOs etc
12 Member ServicesDefining new brokerage firms at QE and assigning their settlement cap formulaRisk ManagementDefining new Custodians at QECreating custody account for each client and define it as a central Inventory accountCollecting Bank guarantees from Brokers and reflecting them into their settlement capCheck if there are any rejected trades available in the systemSending clearing reports to the Qatar Central Bank for cash settlement between brokers via swift messagesRun Daily Settlement batch job
13 Future Roadmap DVP SWIFT messaging for securities settlement Buy-in and cash close outParticipation of custodian in cash settlementSecurities Lending and BorrowingSWIFT messaging for securities settlementSecurities alledgmentStatement of holdingsCorporate actions messagesNon-electiveElectiveEnhancing risk managementVaR based risk model for default fund and settlement capsBonds processing