Arab News, Mon, Nov 20, 2023 | Jumada Al-Uola 6, 1445
Qatar Financial Markets Authority unveils new controls for dividend distribution
Controls to regulate dividend distributions in the Qatari capital market were
issued to boost activity in the financial sector and increase liquidity volume.
Introduced by the Qatar Financial Markets
Authority, the regulations will include substantial changes in the mechanisms of
annual dividends distribution to shareholders in public shareholding companies
listed on the Qatar Stock Exchange. These decrees will also control the interim
dividend distribution quarterly and semi-annually for companies intending to do
CEO of QFMA Tamy bin Ahmad Al-Binali announced
that the rules will be implemented in 2024.
He said: “QFMA is making great efforts to work
continuously to develop its legislation and regulations with the aim of
providing an attractive legislative environment for investment in line with the
best international and regional standards and practices.”
The CEO explained that under the rules, QSE-listed
public shareholding would be permitted to engage in dividend distribution on an
interim basis every three or six months or annually as is currently in effect.
The companies will also be required to distribute dividends within a certain
period, which shall not be exceeded.
He added that public shareholding companies will
no longer be authorized to distribute dividends and bonus shares to
shareholders, highlighting that “this responsibility will be assumed from now by
Edaa, which will make dividend distribution to shareholders on behalf of the
public shareholding companies.”
Edaa, or Securities Depository Center Co., is the
licensed service provider under the QFMA that provides various essential
services related to securities and financial instruments. The company’s core
services include safekeeping, clearing, and settlement of securities and other
financial instruments listed on the Qatar Exchange.
He said: “Dividends distribution through Edaa aims
to facilitate and ease the distribution procedures, preserving shareholders’
dividends with a reliable party, unifying the procedures and party of
distribution, and accelerating the process of distribution and delivery to such
Al-Binali added that the rules will help attract a
new category of investors to the stock market and enhance investor confidence in
the operational performance of listed companies, the strength of their financial
position and their ability to generate real interim revenues and cash flows.
He further stated: “The interim dividend
distribution enhances the expectations of investors in the markets regarding
achieving good financial results at the end of the financial year.”