• To be in line with best international practices, Qatar has decided to create its own depository and hence has established a separate legal entity, now known as Qatar Central Securities Depository (QCSD)
• Apart from basic functions like account opening and account maintenance, QCSD will also perform functions such as clearing, settlement & depository, admitting and monitoring of settlement participants, pledges, family transfers, distribution of corporate benefits declared by Issuers etc.
---> Who owns QCSD?
QCSD is promoted by the Qatar Central Bank (QCB)
---> Who regulates QCSD?
QCSD is licensed and regulated by Qatar Financial Market Authority
---> What services will QCSD provide?
The QCSD will provide the following services:
• Opening of NIN accounts
• Maintenance of bank accounts details in NIN account
• Modifications of shareholder information
• Deliver Versus Payment (DVP)
• Distribution of corporate actions
• Pledge instructions
• Distribution of cash dividend
• Family transfers
• Inheritance transfers
• Providing accountholders with statement of accounts
• Providing accountholders with “To whom it may concern certificate”
---> What is Custodian?
• A custodian is member participant that provides safekeeping of securities services to its clients.
• Non-individuals & corporate institutional clients can appoint custodian.
• The custodian maintains everything on behalf of the client.
• All trades executed by such accountholders have to be confirmed by their respective custodians as per the scheduled timelines as announced by the authorities from time to time.
• If the trades are not confirmed by custodians, the trade will then have to be settled by the executing brokers.
• Presently, there are 3 custodians viz. HSBC, Standard Chartered (SCB) & Qatar National Bank (QNB)
---> How does QCSD manage risk?
Member participants are required to submit the following
• Initial bank guarantee
• Reserve bank guarantee
• Additionally, the member may submit a supplementary bank guarantee of his choice.
• Based on the guarantee submitted by the participants, the settlement cap is calculated and monitored.
• To increase the trading limits, the member participant has to submit additional bank guarantee to the QCSD.
• Once the bank guarantee is confirmed, the settlement cap of the member participants is increased
• Finally, the QCSD has insurance policies in place to manage risk
---> What is corporate action?
Corporate action means the benefits that the account holder gets for holding the securities as on the record date.
• Issuer Companies periodically distribute their wealth to accountholders in form of cash & non- cash benefits.
• Cash benefits include cash dividends, while non cash include extra (Bonus shares and rights issues) shares.
• Based on approvals received from the authorities, the Issuer will request data from QCSD.
• QCSD will provide list of eligible accountholders to the Issuer as on a particular record date.
• For non-cash benefits, QCSD is responsible to credit shares to eligible accountholders on instructions of the issuer.
• QCSD will provide direct transfer of monies to bank accounts of eligible accountholders.
---> What is pledging?
• Pledging is a process whereby the accountholder can avail loan facilities by providing his shares as collaterals or margins.
• The account holder who borrows monies is referred as pledgor.
• The bank / financial institution which lends monies is referred as pledgee.
• Based on instructions of the accountholder, QCSD pledges shares in the CSD.
• Once the pledgor repays the loan back, the QCSD releases the shares back to the account.
---> What is IPO?
• IPO refers to Initial Public Offering.
• Companies i.e. Issuers raise capital from stock markets by issuing shares to investors.
• Based on instructions received from the issuer, the QCSD credits the accounts of accountholders.
---> What is family transfer?
• Accountholders can transfer shares within their family members.
• Such transfers are not on account of any trading activities on the exchange, but directly on the CSD on account of death, inheritance, court orders etc.
• QCSD will transfer shares based on instructions received from accountholder and/or competent authorities and on submission of correct and complete documents.
• The QCSD will collect a commission / fees @ 0.00055 % (Minimum amount of QR.12/-) of the value of the transfer transaction from both the parties based on the closing price of the security for the day before the transfer date.
---> What is cash settlement?
• Cash settlement means the transfer of cash for buying and selling of shares
• Qatar Central Securities Depository performs the cash settlement by forwarding instructions to Qatar Central Bank which debits / credits the accounts of the member participants.
• On the Settlement date, QCSD forwards a settlement report to the Qatar Central Bank & member participants.
• Member participants have to ensure that there is sufficient cash in their settlement accounts to meet their fund obligations.
---> What is the settlement cycle?
• The settlement cycle followed is T+3
• Shares are settled on a gross level while the cash is settled on net level
---> What impact does creation of new QCSD have on existing customers?
• The creation of QCSD will have no impact on any of the existing services.
• Everything will remain the same, like the account details, NIN Number, the relationship with brokers and custodians, the settlement timings, the market model etc.
---> Where will the accountholder get his statement of account?
• The statement of account can be collected from the customer service office of QCSD.
---> Finally, where is QCSD office located?
• QCSD is located at: Al-Emadi Building, C Ring Road, Doha, State of Qatar
Phone : +974 4422 2410
Fax : +974 4422 2455
P.O.Box : 1234 Doha - Qatar