Business | Banking
Qatar raises standards with unified regulator
Qatar has decided to unify its financial regulatory system, broadening the international standards championed by the recently formed Qatar Financial Centre (QFC) across the natural-gas-rich country.
- By Simeon Kerr, Financial Times
- Published: 23:32 July 20, 2007
Dubai: Qatar has decided to unify its financial regulatory system, broadening the international standards championed by the recently formed Qatar Financial Centre (QFC) across the natural-gas-rich country.
The as yet unnamed unified regulator, scheduled to start work in early 2008, will consist of the central bank's banking supervision department, the newly formed regulator of Doha's stock market and the QFC, which has since 2005 attracted about 50 international companies.
Local banks, brokerages, insurance and asset management firms will have to come into line with a tighter regulatory structure by about 2010.
The move is unusual for a region that has traditionally been slow to adopt greater transparency, underlining the Qatar government's political determination to raise standards so financial firms can compete on the global stage.
Rewriting legal codes
The new regulator will also lead to the rewriting of outdated commercial and financial legal codes that are a concern for many foreign companies doing business in the Gulf.
Phillip Thorpe, the chief executive of the Qatar Financial Centre Regulatory Authority, said Qatar had taken a reform-minded step that many other regional countries would find difficult to follow.
"The process will be difficult for some firms and I am sure we will have to deal with some cultural issues - but there is the political will to make it happen," Thorpe said.
"As long as we make time to explain what we want to do, and get across the benefits, I think we will get there."
Thorpe played a part in the formation of the UK's Financial Services Authority, which in the late 1990s merged 10 regulatory bodies and 2,500 employees.
Qatar has 25 banks, insurance firms and brokerages, most of which are enjoying stellar profits amid the oil boom in the Gulf, making change easier to effect. Tighter regulations standards are already arriving through self-regulation and the introduction of Basel II standards in the banking sector, Thorpe added.
The QFC, formed in 2005, has lured international names as many of the banks expanding into the region to harness surplus petrodollars have realised they need to put people on the ground across the Gulf, not just in Dubai or Bahrain.
Banks such as Deutsche Bank and Goldman Sachs are opening offices in Doha.
New players
These banks are hoping to win their share of planned projects worth $100 billion and to manage the wealth of the country, which has one of the world's largest per capita GDPs.
Dubai International Fin-ancial Centre (DIFC) hosts non-retail financial services firms at its financial district, which is regulated by the largely western-staffed Dubai Financial Services Authority (DFSA).
But the DFSA has no say over financial services firms and markets based outside the DIFC in the UAE, which are regulated by the Abu Dhabi-based Central Bank and securities regulator.
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