(MENAFN) The Qatar Financial Centre Regulatory Authority has announced a new regulatory framework for listed derivatives, paving the way for Qatar's stock exchange to introduce a new derivatives market that allows the trading of options and future contracts on local stocks and the main equity index. After a three-month consultation with investors and market participants, the exchange plans to set up an entity that will provide clearing and settlement services for trades in options and derivative contracts.
The new derivatives exchange is expected to be an important milestone in the development of the Qatar capital markets and Qatar's ambition to move to developed market status. According to the stock exchange's acting CEO, Abdulaziz Al-Emadi, the market will allow options, contracts linked to underlying assets, and futures, contracts set at a future date, to be traded in local stocks and the market's equity index. The regulatory authority aims to work with the Qatar Stock Exchange to launch the new derivatives exchange, providing opportunities for investors to better manage and diversify their financial portfolios.
Option contracts give their holders the right, but not the obligation, to buy or sell shares of the underlying company at a specific price on or before a certain date. Future contracts, on the other hand, are types of derivatives whereby the involved parties transact shares of a specific company at a predetermined future date and price. The bourse's rules also enable the central clearing house to manage settlement risks and ensure an efficient settlement process.
The introduction of a derivatives market is part of Qatar's efforts to develop its equities market, open it up to a wider investor base, and introduce more listings. According to the American finance company and index benchmarker MSCI, Qatar is still identified as an emerging market. The leading liquefied natural gas exporter is now redirecting its focus to the development of its equities market.
The Qatar Financial Centre Regulatory Authority's announcement of a new regulatory framework for listed derivatives comes after a three-month consultation with investors and market participants. The Qatar Stock Exchange plans to launch a new derivatives market that will allow the trading of options and future contracts on local stocks and the main equity index. The exchange also plans to set up an entity that will provide clearing and settlement services for trades in options and derivative contracts.
The derivatives exchange is expected to be an important milestone in the development of the Qatar capital markets and the country's ambition to move to developed market status. The regulatory authority aims to work with the Qatar Stock Exchange to launch the new derivatives exchange, providing opportunities for investors to better manage and diversify their financial portfolios. The market will allow options, contracts linked to underlying assets, and futures, contracts set at a future date, to be traded in local stocks and the market's equity index.
The introduction of a derivatives market is part of Qatar's efforts to develop its equities market, open it up to a wider investor base, and introduce more listings. Qatar is still identified as an emerging market by MSCI, but the country is now redirecting its focus to the development of its equities market. The bourse's rules enable the central clearing house to manage settlement risks and ensure an efficient settlement process. The issuance of the Derivatives Markets and Exchanges Rules for the year 2023 establishes the necessary regulatory framework for the Qatar Stock Exchange to move forward with its plans to establish a derivatives exchange and the counterparty to the central clearing house.
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