Qatar move to rival Dubai in Gulf finance market
Qatar's authorities moved last week to enhance the emirate's position in the global financial market by authorising measures to simplify rules and create a single umbrella regulator.
Local media reports indicate the jurisdiction’s ruling emir has given the go-ahead to legislation creating a single financial regulator to cover the banking, financial and insurance sectors, as well as companies licensed by the Qatar Financial Centre.
The move, which has been about five years in the making, will be viewed as another challenge to the supremacy of Dubai and the United Arab Emirates in the region’s financial sector.
According to a Reuters news agency report, the new single regulator will fall under the authority of the Qatar Central Bank. And specialist news web site CPI Financial cites the central bank as stating: ‘The legislation is part of the country’s efforts to upgrade the financial and banking institutions and support the role of regulators in this essential sector of the economy.’
However, the mechanics of merger are not anticipated to be easy. Reuters quotes a Doha-based financial services sector source as saying: ‘The big question is: how are you going to merge all of those different rulebooks? This is a huge legal problem to be sorted out.’
The move comes against a backdrop of ever growing rivalry between the regional financial and legal centres of Doha and Dubai. Only a few weeks ago, Dubai-based newspaper The National reported on increasing unease in the UAE financial sector that more robust competition from Qatar posed a threat to the Dubai International Financial Centre and that reformed market legislation was needed.
According to the newspaper, experts point to recent increased red tape imposed by Dubai’s Securities and Commodities Authority on funds marketed outside of the DIFC. The new rules, say market commentators, could force international businesses to look to Qatar.
‘The DIFC no longer gives you a ticket into the UAE,’ Aryan Schoorl, a lawyer in the finance and projects department in the Dubai office of global law firm DLA Piper told the newspaper.
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