DOHA: Qatar Exchange (QE) has announced that its DVP (delivery versus payment) mechanisms, launched in April 2011, have been performing successfully and that in no instance a securities buy-in or a cash close-out execution was required ever since its launch.
When DVP was first implemented in 2011, QE facilitated DVP by introducing trade confirmation procedures for investors under custody and offering a buy in mechanism and a seller compensation scheme. In 2012 QE made some enhancements to the system whereby on the 22nd of January, 2012, investors were awarded enhanced protection for their securities during the dividends season by ensuring the applicability of the DVP process throughout the Corporate Actions period.
In addition, on April 11, 2012 QE further improved the mechanism by replacing the seller compensation scheme with a buyer compensation procedure which now ensures full protection of the investors’ assets in case of rejection by the seller.
These have been positive changes and received good feedback from the market. Commenting on the success of DVP, QE CEO Rashid Al Mansoori said “We are very pleased to see the positive progress of our DVP system since its implementation two years ago. Being the first exchange in the region to implement such a sophisticated mechanism shows our commitment and dedication to the overall development of the capital markets in Qatar. It has also strengthened the confidence of the international investment community that Qatar is a safe market to invest in.”
Going forward QE will continue to monitor post-trade operations to ensure that the DVP mechanism remains robust and efficient. In the course of 2013 QE expects to enhance their mechanisms further, to support the product development process, most notably through securities lending and borrowing.
The Peninsula
