Qatar Stock Exchange (QSE) plans to implement several key initiatives such as expansion of securities lending and borrowing, margin trading and omnibus accounts, to boost its market infrastructure following the emerging market classification, said its top official.

"The key criteria of the MSCI upgrade was the operational efficiency of the market measured against both qualitative and quantitative MSCI standards, especially the degree of openness of the market to the international investment community and an established and well-tested operational framework in line with international best practices," remarked CEO Rashid bin Ali Al-Mansoori.

He was speaking at the second panel discussion held during the 'Annual Conference of the Arab Federation of Exchanges' (AFE) in cooperation with Thomson Reuters in Dubai.

Al-Mansoori talked about the efforts made to meet the requirements of the upgrade and the challenges faced by the Qatar Stock Exchange.

He also touched on the lessons learned and the underlying implications resulting from the upgrade such as the increase in market liquidity and other advantages that could be leveraged, such as in the development of investor relations and the promotion of the principles of corporate governance.

Al-Mansoori said the upgrade of the Qatari market clearly and evidently reflected the recognition of the positive steps made by Qatari bourse over the past few years to meet the requirements of MSCI, in terms of the development of the market infrastructure and the implementation of a number of important projects and initiatives, which were welcomed by international financial and investment institutions.

"The journey of Qatar Stock Exchange to develop the market started almost seven years ago, when Qatar was put on the watch list for potential upgrade by MSCI in 2007. During the period from 2007 until issuing the upgrade decision in 2013, we have made the necessary improvements to the market regulations, trading and post trade procedures," stated Al-Mansoori.

"We have also increased the number of brokers and custodians and introduced a DvP mechanism.  The aim of all of these initiatives and improvements was to adopt those best practices required by the investment community," he added.

On the implications of the MSCI upgrade, Al Mansoori said the reclassification process highlighted a number of issues that had been addressed by the exchange and other competent authorities in order to raise the efficiency of the market.

"The road does not end here. We have a long way to go. With this in mind, we have identified a number of other areas that will allow us to capitalize on the emerging market classification," stated the QSE chief.

"Initiatives like expansion of securities lending and borrowing, margin trading, omnibus accounts, risk management and the introduction of a CCP will add further confidence to the robustness of the market infrastructure," he added.

Al-Mansoori stressed the importance of educating investors, pointing out that Qatar Stock Exchange has been engaged for more than a year on the implementation of an ambitious program to raise awareness of investing among the citizens and residents through frequent workshops, seminars and courses.

He said it was important to develop a program for the listing of more companies in the Arab stock markets in order to provide new investment opportunities and called on the regulatory authorities and capital market commissions to respond to the needs of investors, markets and companies by accelerating the process of listing new eligible companies.

"It is important that we, the exchanges and regulators in the region, work together to address the issues related to market development and eliminate any impediments to the development of these markets," the Qatari bourse chief added.-TradeArabia News Service