By: Reeda Halawi – Associate
The Board of Directors (“BoD”) of the Qatar Financial Markets Authority (“QFMA”) has issued Decision No. 2 of 2024 (“Decision”), published in the Official Gazette, on March 12, 2024. The purpose of this Decision is to underscore the importance of implementing the provisions of Law No. 8 of 2012[1] regarding the QFMA, and to achieve its objectives of (i) maintaining confidence in the system of dealing in financial markets; (ii) protecting securities’ owners and dealers when applying disclosure in a manner that achieves justice and transparency; and (iii) preventing from conflicts of interest and exploitation of private information of issuing entities that offer their securities to the public or that wish to list their securities in one of the financial markets licensed by the QFMA.
Further, to comply with other applicable QFMA regulations and decisions[2], to ensure the stability of the financial markets, and to mitigate potential risks, the QFMA has issued specific guidelines that insiders need to comply with.
The Decision defines an insider as “any person who by virtue of his position has obtained access to personal data or core information pertaining to a company or its customers, which was not publicly available, including but not limited to members of the board of directors, members of the executive board, employees of the company or any of the company’s group as well as their spouses and their minor children, and any other persons who could in any way access such information, whether through an agreement or through their profession, or any person who accessed such information in any means prior to making it available to the public.”
The Decision further determines that such information entails any data or core information that could potentially affect the securities’ value as issued by the listing company, or impact the listing of such securities, if disclosed. Accordingly, the Decision requires the Board of Directors of any company whose securities are to be listed on the Qatari Financial Markets to implement rules, guidelines and procedures to curve the misuse of data and fundamental information, and to regulate the use of such information by those who have access to it.
The Decision also imposes on any insider the following duties: (i) to keep confidential any data or information accessed through his work, position, or through his professional or personal relationships; (ii) not to trade in securities whose information have been disclosed to him through his work, position or his professional or personal relationships, or to provide an advice in that respect to a third party who does not have access to such information; (iii) to disclose to the listing company – through its internal reporting system – any transaction or work he has previously done in relation to such securities or securities of the parent company, no later than 3 days from starting to work for this company; and (iv) to commit to the trading ban periods stipulated in the regulations, rules and decisions issued by the QFMA.
Similarly, the Decision inflicts on companies the requirement of providing the QFMA with a regularly updated list of insiders who access such information, as well as their relatives and the names of the companies owned by them. And in exchange, the relevant markets need to (i) publish such list on its online platform; (ii) make sure that insiders comply with the applicable rules, regulations and guidelines; and (iii) disclose all trades effectuated by these insiders on the online platform of such markets.
Finally, in the event of breach of any of the Decision’s provisions and/or requirements, the QFMA reserves the right to take appropriate measures and initiate proceedings as prescribed for in Article 35 of Law No. 8 of 2012 in order to impose penalties.
[1]https://www.qfma.org.qa/Admin/RulesRegulations/Documents/RulesRegulationsDocuments/English/Law.pdf
[2] QMFA’s Board Decision No. 4 of 2020; Listing Rules for Funds’ Units of 2019; Governance Code for Companies & Legal Entities Listed on the Main Market of 2016; and Merger and Acquisition Rules of 2014.
