Qatar Updates Capital Market Laws With New Offering, Listing And M&A Rules To Boost Foreign Investment

The reforms aim to simplify listings, strengthen governance and support the country’s wider drive to attract foreign investment.

Governor of Qatar Central Bank and Chairman of Qatar Financial Markets Authority (QFMA) Sheikh Bandar Bin Mohammed Bin Saoud Al-Thani said the new rules form part of the State’s efforts to stimulate foreign investment and reflect QFMA’s ongoing review and development of the legislative structure regulating the Qatari capital market in line with best practices and international standards.

Qatar finance laws

His Excellency said the rules support QFMA’s commitment to keeping pace with international developments, simplifying listing processes for issuers and strengthening the overall framework regulating Qatar’s capital markets.

He added that the new rules will help address challenges facing the sector, support economic growth and diversity, and advance the capital markets to the rank of developed markets, particularly given the recent qualitative leaps in the Qatari market.

The Offering and Listing, and Mergers and Acquisitions Rules form part of the Third Financial Sector Strategic Plan and aim to enhance the attractiveness of Qatar’s markets for local and international investors.

Sheikh Bandar noted that the rules integrate all existing legislation regulating the listing and trading of securities for companies listed or seeking to list on QFMA-licensed markets.

They also include new provisions to facilitate procedures for listed companies, protect investor rights, ensure transaction stability and align with international standards.

Public consultation

QFMA CEO Dr. Tamy Bin Ahmad Al Binali said the rules were subject to public consultation in April last year, during which all market participants were invited to review the draft and share feedback.

He stressed QFMA’s commitment to consultation with the public and relevant entities, noting that cooperation and support from all institutions under QFMA’s jurisdiction are essential for achieving the objectives of legislative development.

Dr. Al Binali said the new rules are the result of more than two years of joint work among financial sector regulators and replace the previous Offering & Listing of Securities on the Financial Markets Rulebook issued under Board Decision No. 4 of 2020.

He noted that the rules apply to companies and entities listed on the stock exchange, their acquisitions and mergers, companies wishing to offer and list, investors and offering and listing advisors.

New Qatar rules

Among the most significant amendments is the new unified structure merging all regulations related to offerings and listings, including rights issues, sukuk and bonds, funds units, book building and share buybacks.

The rules also introduce a dedicated chapter for acquisitions and mergers.

For offerings and subscriptions, the book-building mechanism has been updated to require a single offering and listing advisor rather than multiple separate roles.

For listings, a new mechanism has been added to determine the reference price through a pre-listing auction in the case of direct listings. For sukuk and bonds, issuers must now appoint a trustee to protect investor rights.

Changes to the second market include a requirement of two years before requesting transfer to the main market and an obligation for companies to prepare an annual governance report.

Financial transparency

In terms of disclosure and transparency, companies must disclose in both Arabic and English, follow updated international-aligned controls for postponing disclosure and maintain insider lists while preventing insider trading during the ban period.

For founders and major shareholders, the rules allow the sale of up to 30 per cent in the first year in cases of direct listing on the second market.

For acquisitions and mergers, the rules apply specifically to listed companies, regulate reverse acquisition mechanisms and introduce a compulsory offer requirement at 90 per cent, without the need for minority consent. REITs are now permitted to borrow up to 50 per cent of gross asset value.

Qatari markets

Under Article 2, all parties to whom the rules apply must comply within one year from publication in the Official Gazette, with the Chairman authorised to extend the period.

The rules were developed based on a benchmark study of similar legislation in international financial markets, alongside a comprehensive review of existing regulations governing issuance, offering, listing, rights issues, acquisitions, mergers and company share buybacks, including treasury shares and employee incentive schemes, as well as conversion rules for public shareholding companies seeking listing on Qatari markets.