Qatar Financial Markets Authority (QFMA) has issued it 2023 annual report, which includes its key activities, works and achievements during the past year.
The report sheds light on several developments of the Qatari capital market during 2023, and presents the QFMA's key achievements during the year in terms of procedures, initiatives, legislation, regulations and rules related to its competencies and the financial sector activity.
The report reviews the most important contributions and achievements of QFMA during the past period, and its participation in various local and international meetings and conferences related to the capital market.
The content of the report reflects the QFMA's efforts in enhancing transparency and stability in the Qatari market, and enhancing confidence among investors and market participants.
The report also addresses the QFMA's ongoing efforts aimed at maintaining the continued progress of the financial sector in the country, improving its performance and consolidating its development, protecting its dealers and investors, and achieving qualitative leaps in the level of their aspirations and ambitions, in addition to moving forward at an accelerated pace in enhancing the attractiveness and competitiveness of doing business in the Qatari capital market, which will reflect positively on all dealers and entities subject to the QFMA's jurisdiction.
2023 witnessed the completion and implementation of qualitative measures and initiatives in the process of outstanding performance of the Qatari financial sector, including the announcement of the QFMA's 3rd Strategic Plan (2023-2027), as well as many other legislations, regulations and decisions that began to have a clear positive impact on the capital market sector.
During 2023, QFMA also witnessed a set of administrative and structural changes aimed at transforming it into a supervisory authority with international standards that follows the best practices and international standards in the field of regulation, supervision over the Qatari capital markets, as such changes were based on updating the QFMA's organizational structure, developing the followed policies and procedures, accelerating the Qatarization policy, empowering Qatari competencies, and raising its leadership and administrative capabilities.
In his message at the 2023 Annual Report, H.E. Sheikh Bandar Bin Mohammed Bin Saoud Al-Thani, Governor of Qatar Central Bank and Chairman of the QFMA, said that the past year witnessed the beginning of a new phase in the development of the Qatari financial markets, aiming to increase the competitiveness of the Qatari financial markets, raise their efficiency, and improve the financial services provided to Qatari and non-Qatari investors. Such markets rely on the latest technological methods, tools and programs and encourage the use of artificial intelligence in a way that promotes its leadership among the Arab financial markets, places it among the ranks of developed financial markets, and contributes to achieving Qatar National Vision "QNV 2030".
H.E. the Board Chairman explained that the launch of the 3rd QFMA's Strategic Plan 2023-2027 was the starting point and beginning for this new phase, as this plan is based on the key principles of QNV 2030 and derives its objectives from both the 3rd Qatar National Development Strategy (QNDS) and the 3rd Qatar Financial Sector Strategy (FSS). It aims to achieve the sustainability of financial markets, promote green financial instruments, and adopt technological and digital developments.
The 3rd QFMA's Strategic Plan includes a set of initiatives and projects that reflect the QFMA's future vision for the financial markets and seeks to achieve the desired goals in the coming years and establishes a regulatory framework and infrastructure for the Qatari financial markets to be in line with the best international standards and practices and emphasizes the importance of financial awareness among the market participants. It contributes to the transition towards sustainable financial markets and strengthens the QFMA's local and international strategic alliances.
H.E. Sheikh Bandar added that 2023 witnessed the QFMA's issuance of a set of legislations aimed at accommodating the changes in the regional and international financial markets, attracting more Qatari and non-Qatari investors, and reducing the cost, burden and effort on all those dealing with the Qatari financial markets, in addition to unifying the procedures and interface periods, both when opening trading accounts or subscribing to securities or distributing dividends to the beneficiaries' investors. QFMA also introduced to the Qatari market for the first time the mechanism for the interim dividend distribution during the financial year.
H.E. Sheikh Bandar affirmed that such efforts and changes were reflected in the Qatari financial market performance during 2023, as the QSE general index increased by 1.4% compared to a decrease of 8.13% during 2022, and the market value of listed companies increased by about 2.7% to reach 624.6 QR billion. The influx of foreign investment into the Qatari market continued, with net purchases by non-foreigners reaching 1.7 QR billion, contributing to the increase in non-Qatari ownership of Qatari shares listed on the financial market, as well as the increase in the contributions of activities brought to the Qatari financial market by QFMA, such as the activities of market maker and liquidity provider, which contributed to about 22% of the total value of market trading, amounting to 125 QR billion. Margin trading activity also contributed to about 28.8% of the total value of trading during 2023.
H.E. Sheikh Bandar emphasized that QFMA, in this new phase in its journey towards elevating the Qatari financial markets to the ranks of developed financial markets, is open to cooperation and coordination with all of the State agencies and parties concerned with the Qatari financial markets, as well to share them with all issued legislation for consultation, and that QFMA is fully prepared to consider and adopt any proposals aimed at developing procedures or removing any obstacles.
For his part, H.E. Dr. Tamy Bin Ahmad Al-Binali the QFMA's Chief Executive Officer, said in his message at the 2023 annual report, that during the next five years, QFMA looks forward to developing an infrastructure for Qatari capital markets that adopts the best international standards and practices, uses the latest technological methods and programs and artificial intelligence programs, and is flexible and able to accommodate all developments in the international capital markets, as well can confront crises in the financial markets and reduce the associated risks.
H.E. Dr. Al-Binali explained that in order to achieve the QFMA's future vision, during 2023, QFMA implemented a set of initiatives and projects, including the launch of the 3rd QFMA's Strategic Plan 2023-2027, which is the beginning of a new phase different from the stages of development of the previous Qatari capital markets, during which QFMA aims to raise the competitiveness with other capital markets, attract more Qatari and non-Qatari investments, and advance the Qatari financial markets to the rank of developed markets, as well as raise the institutional and technological capabilities and empower Qatari competencies and expertise.
H.E. Dr. Al Binali pointed out that QFMA has also implemented new mechanisms to facilitate the procedures of the financial market participants, such as the mechanism to facilitate the opening of the investor account from outside the country by allowing the customer to own a bank account in the country of residence subject to a regulatory jurisdiction, as well as the mechanism to facilitate subscription and trading procedures, by allowing one of the parents to trade for the benefit of minor children through the bank account of either of them, or from the bank account of the minor.
H.E. Dr. Al-Binali said that the QFMA issued a decision to form the "Single Window Committee for the Capital Market" in order to achieve maximum facilitation and ease for companies wishing to securities' offering or listing in one of the Qatari capital markets subject to the QFMA's jurisdiction. The single window will simplify the procedures for such companies by limiting their dealings with only one entity instead of dealing with other competent authorities separately, including QFMA, Ministry of Commerce and Industry (MOCI), Qatar Stock Exchange (QSE), and Edaa (QCSD). QFMA also issued an update to the Dispute Settlement Rules aimed at reducing the costs of arbitration and arbitrators' fees and urging market dealers to use arbitration as a fair and complete means to settle disputes among them, and QFMA also issued rules regulating the dividends distribution in order to unify both procedures and the entity that distributes the dividends, reduce time, effort and costs to listed companies, and provide a single window for the investor to collect all different companies dividends.
QFMA's 3rd Strategic Plan (2023-2027):
The report confirms that the QFMA's 3rd Strategic Plan (2023-2027), which was launched last December, is based the Qatar National Vision 2030 and the 3rd Qatar National Development Strategy (QNDS), with strategic domains: Fiscal Stability and Sustainability Financial System Stability and Economic Resilience, in addition to the 3rd Qatar Financial Sector Strategy (FSS), with strategic dimensions: Governance and Regulatory Oversight, Islamic Finance, Digital Innovation and Advanced Technology, Institutional Governance for Environmental and Social and Sustainability (ESG) and Talents and Competencies.
The new QFMA strategic plan also has considered QFMA LAW & Vision and Mission, Qatar Economic Outlook inclusive of GCC, Benchmarking Study of Capital Market Regulators Strategic Plans, Review of Global Capital Market Regulators, Review of Qatar CM Sector & EAP for Capital Development Projects, Review of QCB FinTech Strategy, and the IOSCO Principles and FATF 2023 Qatar Observations.
By adopting the 3rd Qatar Financial Sector Strategy (FSS), QFMA is working to achieve the desired transformation in the Qatari capital market sector, as the future vision related to the capital market within the plan aims to achieve a enhanced regulatory framework aligned with leading international standards, including robust regulation on investor protection, market transparency, and corporate governance, and the achievement of a State-of-the-art capital markets infrastructure, including electronic trading platforms and cloud computing facilities, ensuring data accessibility, and moving the market from emerging to developed market status.
The QFMA's vision in accordance with the new strategy is to advance the Qatari capital market to the "Developed" status, which represents one of the main pillars of the national economy, explaining that the QFMA's mission according to the strategy as well, also includes the development and regulation of financial markets that are fair and transparent to ensure the protection of their participants, based on high-level legislative standards and sustainability practices by strengthening the technological infrastructure and human capital with diverse competencies, and raising the awareness of market participants.
Dividend Distribution Rules:
The report highlights the new rules for the dividends distribution in the financial markets, which were approved by the QFMA last November, as includes substantial changes in the mechanisms of annual dividend distribution to shareholders in public shareholding companies listed on Qatar Stock Exchange (QSE) and include regulating the interim dividend distribution (quarterly, semi-annually) for companies wishing to do so.
Under such rules, QSE listed public shareholding companies were allowed for dividend distribution on an interim basis (three months or six months) or annually, as is currently in effect. These companies will also be required to distribute dividends within certain period should not be exceeded for distributing dividends.
Edaa is no longer be the entity authorized to distribute shareholders' dividends and bonus shares on behalf of listed shareholding companies.
The new rules for dividend distribution obligated these companies to transfer the dividends scheduled to be distributed to Edaa, which in turn would transfer them to shareholders through several options stipulated in Article (13) of the rules, which include transferring the dividends to the bank account of each investor, or to the trading account of the brokerage company with which the investor deals, or added to the balances of the investor's Qatari credit card (Himyan), according to the investor's choice of his due dividends collection methods, provided that the dividend payments to beneficiaries shall be within a period not exceeding the end of the fifth business day after the date of dividends receipt from the listed company.
The report pointed out that one of the most important implications of the new Dividend Distribution Rules is that they provide investors in the stock market with a periodic return (quarterly or annually) on the value of their investments instead of waiting for the annual one; Contribute to reinjecting part or all the dividends into the market periodically during the financial year; Increase activity in the market; Help attracting a new category of investors to the stock market; Enhance investor confidence in the operational performance of listed companies, the strength of their financial position and their ability to generate real interim revenues and cash flows.
Single Window:
The launch of the Single Window E-Portal, which aims to facilitate the procedures for securities' offering and listing and provide many advantages to companies participated in the financial market, is one of the QFMA's key achievements during 2023.
The report pointed out that the single window represents a qualitative shift that shall achieve the maximum degree of facilitation and convenience for companies whose activities are related to the Qatari financial markets. It will have major implications in significantly simplifying the procedures for such companies by limiting their dealings with only one entity instead of dealing with other competent authorities separately, including QFMA, Ministry of Commerce and Industry (MOCI), Qatar Stock Exchange (QSE), and Edaa (QCSD).
The single window also provides many other advantages for such companies, related to facilitating the procedures related to securities public offering, or listing on QSE, or in the event of any acquisitions or mergers.
The launch of the "Single Window for the Capital Market" comes in light of the continuous development and modernization of the capital market regulations and legislation in the country, and in keeping with the global changes taking place in this vital sector as well its privacy needs, in addition to strengthening the QFMA's ongoing efforts in improving the working mechanisms of the market to achieve its aspirations aimed at improving the financial services provided to investors and securities issuers wishing to be listed.
Legal legislation:
With regard to legal legislation, the report indicated that in light of the QFMA's constant care to keep pace with the developments in the legal environment regulating its activity and field of work, as it develops and updates legal legislation on an ongoing basis. One of the most important actions that QFMA has done in this regard during the year 2023 is issuing the following decisions: QFMA's Board Decision No. (1) Of 2023 Concerning the Amendment of Some Provisions of Margin Trading Rules; QFMA's Board Decision No. (2) of 2023 Concerning the Amendment of Some Provisions of Anti-Money Laundering and Combating Terrorist Financing Rules; QFMA's Chief Executive Officer Decision No. (1) Of 2023 Concerning the Issuance of Appendix (1) of Book Building Rules; QFMA's Board Decision No. (3) Of 2023 Concerning the Issuance of Disciplinary Committee Procedures at Qatar Financial Markets Authority; QFMA's Board Decision No. (5) Of 2023 Concerning the Rules for Settlement of Disputes Arising from Securities-Related Transactions by Arbitration; QFMA's Board Decision No. (7) Of 2023 Concerning Rules of Dividend Distribution in Shareholding Companies Listed on the Financial Markets.
Governance:
QFMA pays great attention to corporate governance, as Corporate Governance Section monitors the compliance of the companies and entities subject to QFMA's jurisdiction with corporate governance principals, receives corporate governance reports and ensures that they are issued at the required time, as well reviews and evaluates the governance reports, and ensures their fulfillment of the procedures, and the information and data required according to Governance Code for Companies & Legal Entities in the Main Market issued by QFMA's Board Decision No. (5) Of 2016.
The overall compliance percentage of all companies with the articles of the CG Code for 2022 reached 99% with an increase of 9% compared the overall compliance percentage reached 90% in 2022.
Disciplinary Committee:
According to the report, during 2023, the Disciplinary Committee held (18) hearing sessions, registered (14) violations in the Committee's record, and (21) violations were adjudicated, while the amount of violations that were approved against a number of companies amounted to 15.6 QR million, a decrease of 47.91% and an amount of 14.35 QR million compared to 2022 of 29.95 QR million.
Appeals Committee:
The total number of appeals and requests of a stay of QFMA proceedings considered by the Appeals Committee is (66), including (21) appeals and requests of a stay of QFMA's proceedings registered in 2022. The Appeals Committee held (18) meetings during the year, while the number of its sessions reached (13).
Anti- Money Laundering and Combating Terrorist Financing (AML/CFT):
AML/CFT is one of the QFMA's priorities, based on its role in protecting the Qatari capital market from any risks that may be related to potential ML/TF transactions, and maintaining an attractive environment for safe investment.
The QFMA's regulatory efforts contribute to consolidating the State of Qatar's permanent commitment to combating money laundering, terrorist financing and proliferation financing, and addressing illicit financing in all its forms. QFMA has prepared its strategy for combating money laundering, terrorist financing, and proliferation financing 2023-2027 based on the 2023-2027 QFMA's Strategy, the 2023-2027 Financial Sector Strategy (FSS), the Qatar's National Strategy and Action Plan for Combating Money Laundering, Terrorism Financing and Proliferation Financing 2020-2025, and the outcomes of the mutual evaluation report of the State of Qatar 2023.
QFMA is a member of in the NAMLC, and it is actively working to implement the FATF international standards, provide feedback to licensed entities, including guidelines on the latest AML/CFT international practices and what is issued by FATF and MENAFATF, and work to raise the awareness and competence of entities licensed by QFMA.
QFMA's E-Services:
The report pointed out that QFMA provides E-services via its official website, its phone application and via "Hukoomi" website, as it provides the service of submitting applications of all kinds electronically, including licensing and renewal licensing applications for individuals to perform regulated functions in financial services companies and many other e-services.
During 2023, QFMA has received (85) E-services applications, including (2) applications for licensing financial services activities, (2) applications for licensing broker agent, (40) applications for approval of individual in the regulated functions, (45) applications for licensing renewal of approved individual in the functions licensed by QFMA, (13) applications for registration renewal of external auditor, and (12) applications for registration renewal of financial evaluator.
Offering & Listing;
During 2023, (12) applications related to the acquisition and merger activity were completed, where (6) acquisitions worth more than 1QR billion were completed, and these deals varied between direct and indirect acquisitions inside and outside the State of Qatar, and included many sectors such as: Industrials, Transportation, Insurance, and Telecoms. In addition, (5) acquisitions are being processed, and one transaction has been cancelled.
The volume of capital listed on the QSE during 2023 through direct offerings and listings in the main market amounted to (6.083) QR billion, and in the second market (207) QR million, which contributes positively to increasing the depth and attractiveness of the capital market in the State.
During 2023, the Book Building mechanism was implemented for the first time in the State of Qatar, as this mechanism supports more realistic pricing, as it depends on the desire and seriousness of qualified investors with experience in buying the shares offered for subscription, which reflects positively on investors' confidence in the market.
During 2023, Mekdam Holding Group was approved to transfer from the Venture Market to the main market of QSE, and the transition of Al-Faleh Educational Holding Company from the Venture Market to the main market.
Human Capital Development and Qatarization:
Developing and building human capital capacity is one of the key pillars of upgrading the level of work, performance, and achievement. The continuous development of human resources will ensure outputs in line with the QFMA's aspirations and ambitions as well its strategic plan. Thus, QFMA pays more concern on developing human capital capacity, to enhance its competitive capabilities, and is also working to increase jobs Qatarization percentage and assign national competencies in various departments and sections.
The report stressed that Qatarization and investment plans is one of the strategic initiatives of the Human Resources Department and the QFMA, and there are great efforts made to support the approval and implementation of Qatarization plans and enabling Qatari cadres to fill various available jobs in QFMA through appointment - succession plans and replacement - government scholarship and many other actions, which is evident through the new appointments during 2023, and the Qatarization percentages to the total number of employees. The report indicates that the total number of the employees, as of the end of last year, reached 173 employees, of whom 73% are Qataris, and 123 employees, an increase from 141 employees, including 96 Qatari employees in 2022, representing 68%.
Thus, 2023 witnessed the addition of about (41) new employees to the QFMA's work team, including 34 Qatari employees, representing 83% of the new recruitments.
As for leadership and supervisory positions at QFMA, until the end of 2023, they include about 30 Qatari employees representing 97% of the total leadership positions, up from 16 employees representing 67% in 2022.
Training and spreading financial awareness:
The report mentioned the importance of spreading financial awareness and financial literacy is one of the key QFMA's strategic objectives of the strategic plan (2023-2027, as it pointed out that 2023 witnessed the organization of a number of introductory and awareness seminars for school students in cooperation with the Ministry of Education and Higher Education as part of a series of introductory and awareness campaigns held by the QFMA for the various sectors of investors including the prospective future investors comprised of the youth.
The report stresses the importance of 
theoretical and practical training for employees and market participants as well those interested in the Qatari capital market in order to achieve its strategic plan.
In this regard, the report indicated that the number of training programs implemented by QFMA during 2023 amounted to 93 training programs.
Future plans and projects:
QFMA is constantly updating its existing plans and developing new plans in order to keep pace with all developments in its field of business and activities. It also follows up and implement its own projects to meet its needs and contribute to achieving its strategic objectives.
In the field of complaints management, QFMA is working on developing electronic systems for receiving complaints to become integrated.
In the field of licensing, QFMA has started reviewing and amending the issued legislation and introducing new legislations to ensure that it keeps pace with developments in the current financial markets to reflect the best international practices in line with the local market.
Work is also underway to expand the scope of e-services provided to stakeholders concerned with the addition of new e-services, so that applications are submitted and followed up through the e-services on the QFMA's website.
QFMA is conducting a review of the departments' policies and procedures to keep pace with new organizational developments.
In the field of Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT), QFMA will working on increasing reliance on technology tools in the work of the department to achieve speed and accuracy in completion, holding workshops on providing feedback to licensed parties of the AML/CFT obligations and requirements, especially raising their awareness of the ML/FT risks, as well holding workshops in cooperation with the Financial Information Unit to raise awareness among licensed parties on improving the number and quality of suspicious transaction reports, especially the patterns and indicators of suspected terrorist financing.
In the field of inspection, working on Promoting a risk-based systematic supervision model, which aims to develop the foundations of risk-based surveillance and inspection; Developing an electronic system to follow up the capital adequacy of companies subject to the QFMA's jurisdiction, which aims to enhance the accuracy and facilitate the mechanism and procedures for verifying companies' compliance with Capital Adequacy Standards in a clear and accurate electronic manner; Reviewing legislation related to adequacy, to be amended in line with developments and best international practices; Developing an electronic system to receive the reports required to be provided to the department in accordance with the law, regulations, rules and decisions issued thereto, and aims to raise the efficiency of the department and the speed and accuracy of completion with regard to surveillance and supervision of companies subject to the QFMA's jurisdiction; and Reviewing the policies and procedures of the Inspection Section to keep pace with new regulatory developments.
In the field of Surveillance over Trading, QFMA will work on Preparing internal policies and procedures for the Surveillance Department; Issuing a code of market conduct; Developing a methodology for monitoring suspicious behaviors through the development of regulatory alerts; Developing the methodology and controls of investigation, data collection, data analysis, and preparation of analytical notes and reports forms; Developing a methodology to monitor and track the marketing activities of unlicensed financial instruments and financial advice traded on websites and social media sites; Preparing the surveillance manual that includes all the procedures and tasks of the Surveillance Section; Developing an electronic system for managing market data; Adopting a new surveillance system; Strengthening surveillance over the insiders; and Enhancing the Code of Conduct for Dealers in the Financial Markets.
