MENA Asset Management Survey 2012 - National Bank of Abu Dhabi

Regulatory Trends
had been under consideration for several years with the intent to have a single high
standard regulatory environment across Qatar.
In October 2012, CEO of Qatar Exchange pointed to exchange traded fund regulations
that had been issued in the Summer, efforts to develop listing requirements for real
estate investment trusts (REITs), and development of debt listings. He also raised a
number of issues including regulations on securities lending and borrowing which were
issued, the delivery versus payment system which had been introduced, marketmaking,
and introduction of a free float requirement. Incidentally, these may together address the
criteria for Qatar to be included in the MSCI Emerging Markets index.
In August 2012, Qatar Financial Markets Authority issued custody licenses as part of
measures to pursue financial sector reforms.
Saudi Arabia
In April 2012, Chairman of the Capital Market Authority stated that opening the
Saudi Stock Exchange to foreigners was still within their strategy, but would be
gradual. In 2011H2, Capital Market Authority and Saudi Stock Exchange (Tadawul) had
circulated a draft plan to open up the stock market to foreigners. At present, foreigners
can engage in total return swaps and participation notes and obtain the economic benefit
of stocks without full ownership rights. Foreigners can also own mutual fund units that
invest in Saudi Arabia including the exchange traded funds that trade on Tadawul. The
draft rules propose per qualified foreign investor a maximum of 5% of capital for a stock.
The direct foreign ownership limit proposed is 20% of a listed company’s capital. The
direct and indirect foreign ownership (swaps, p-notes – non-GCC foreigners and foreign
expatriates in Saudi Arabia) limit proposed is 49% of a company’s capital. The draft
framework specifies qualified foreign investors as holding at least US$ 5 billion assets
under management.
In February, Saudi Arabia's regulator issued new guidelines for declaration of
beneficiaries. It was reported that the move would help the regulator impose ownership
limits when the market opens to foreigners using the Qualified Foreign Institutional
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