Qatar Stock Exchange (QSE) announced the commencement of Covered Short Selling and Securities Lending & Borrowing activities in the market. The launch is part of initiatives aimed at developing market mechanisms and enhancing liquidity, and was formed in cooperation with the Qatar Financial Markets Authority (QFMA), Qatar Stock Exchange (QSE), and the Edaa (Qatar Depository Company);
Under the regulatory framework, Covered Short Selling operations and Securities Lending and Borrowing activities will be subject to rules and procedures issued by the QFMA, QSE and Edaa.
Covered Short Selling will be allowed solely for market makers, liquidity providers, and qualified investors, including members, and any other cases approved by the QFMA. Meanwhile, Securities Lending & Borrowing transactions will be executed in the post-trading system of the Edaa by its members or custodians licensed by the QFMA to conduct this activity under the designation “Securities Lending & Borrowing Agents.”
In a statement, Abdulaziz Nasser Al-Emadi, acting CEO of Qatar Stock Exchange, highlighted the significance of launching this initiative and its role in enhancing market liquidity and introducing new investment tools that will offer investors improved options for optimal investment in the market. He emphasized that such initiatives are essential for launching the derivatives market and adopting the tradable investment instruments. He also emphasized that the availability of these tools, alongside other instruments, would contribute primarily to upgrading the Qatari market to advanced status.
The Covered Short Selling rules stipulate that transactions can only be executed at a price higher than the last traded price for the same security, where the Uptick Rule will apply to all traders. Brokers will be responsible for ensuring that the Covered Short Selling order is entered into the trading system at a price at least one point higher than the last traded price for that security.