Qatar Takes Action To Stop Banks Offering Brokerage Services

by Lorys Charalambous, for LawAndTax-News.com, Cyprus

05 December 2005

The Doha Securities Market in Qatar announced last week that it will phase in a ban on banks offering stock-broking services in order to address concerns over potential conflicts of interest.

Speaking to Reuters, an unnamed government official explained that:

"It is a conflict of interest to have banks offer brokerage services and also be shareholders in the Dilala Stock Brokerage Company."

The timetable for the phase-in of the new regime is as follows:

• From January 1, 2006 To February 28, 2006, brokerage banks will not be permitted to open accounts for new clients;
• From January 1, 2006 To January 31, 2006, licensed brokerage banks will conduct brokerage business (selling and buying) for their existing clients only;
• From February 1, 2006 To February 28, 2006, all brokerage banks will transfer all clients shares to the Central Registration Department (CRD) at the DSM. The transfer process will be based on account sequences (C Accounts). Brokerage banks will be banned to conduct any purchase transaction for their clients. However, They will be permitted to sell shares of only those who did not transfer their shares during the transferable period to the CRD; and
• On March 1, 2006, brokerage banks operations will be terminated entirely. However, in case of any technical difficulties that may hinder the transfer process of shares to the CRD as scheduled, a short additional period may be given to the brokerage banks to conduct the transfer of the remaining shares.

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