Regulatory bodies welcome new financial institutions law

December 13, 2012 - 7:54:33 am

DOHA: The banking regulator, Qatar Central Bank (QCB), made it amply clear yesterday that as per a new law issued recently anyone soliciting or accepting deposits from the public without a valid licence will be taken to task.

The conduct of financial services in the state requires that a licence be obtained from the competent authority and provides “sanctions” for “persons” who conduct such activities without the required licence, the QCB said.

The new law mandates the QCB to act as a competent supreme authority for framing the policies for the regulation and supervision of all financial services and markets in the country, Qatar News Agency (QNA) reported citing the QCB.

The new legislation lays the foundation for increased cooperation between the regulatory bodies in Qatar — a reference to the Qatar Financial Markets Authority (QFMA) that regulates Qatar Exchange and the Qatar Financial Centre Regulatory Authority (QFCRA).

The cooperation is necessary to develop and apply regulatory policies and implement international standards and best practices to deliver the objectives of the Qatar National Vision 2030 and Qatar’s National Development Strategy (2011-16). 

The QCB, the QFC Regulatory Authority (QFCRA) and the QFMA) welcomed the Law of the Qatar Central Bank (QCB) and the Regulation of Financial Institutions (Law No. 13 of 2012).

The new Law is an important step in advancing the framework for financial regulation and supervision in the country, promoting financial stability and expanding the ambit of regulation and supervision to cover areas requiring new and enhanced financial regulation.

The QCB, the QFCRA and the QFMA have issued a summary of some of the important provisions of the new Law and details of the objectives of the Financial Stability and Risk Committee to be established under the law.

The purpose of the joint statement, according to the QNA report, is to provide a gist of some of the important provisions of the law and explain the objectives of the Financial Stability Committee.

More detailed explanations and guidance will be provided in due course on other aspects of the law by the relevant authorities. 

The Law is an important step in: 1, advancing the framework for financial regulation in the State of Qatar; 2, promoting financial stability and; 3, expanding the ambit of regulation to cover areas requiring new and enhanced financial regulation within Qatar.

In addition to its existing responsibilities for the supervision of banking and financial services institutions, the QCB acquires responsibility for the licensing and supervision of insurance and reinsurance companies and insurance intermediaries that were previously licensed by The Ministry of Business and Trade. 

The new law repeals Decree Law No. 1 of 1966 regulating Insurance Firms and Agents.The law also introduces important new provisions dealing with consumer protection, client confidentiality, protection of credit information, regulation of Islamic financial institutions, merger and acquisition of Financial Institutions, and settlement of disputes.  

The Financial Stability Committee is the mechanism established under the law to help deliver this objective by providing recommendations to the Board of Directors of the QCB.  The committee provides a formal structure for co-ordination among the regulatory bodies. The Committee will be chaired by the Governor of the QCB and its membership will include the Deputy Governor (Vice-Chairman) and the Chief Executive Officers of the QFMA and the QFC Regulatory Authority.

The Peninsula