Financial Crime World

Qatar’s Central Bank Law: Empowering the Qatar Central Bank as a Unitary Regulator

The legislative scene in Doha has undergone a significant transformation with the publication of the revised Central Bank Law (Law No. 13 of 2012). This law aims to establish the Qatar Central Bank (QCB) as a robust regulatory body overseeing financial services and activities within Qatar.

Replacing and Updating Previous Laws

The new Central Bank Law replaces and updates Law No. 33 of 2006 and builds upon the earlier Law No. 15 of 1993, which established the regulatory framework for financial services in Qatar.

Objectives of the Qatar Central Bank

Under the Central Bank Law, the QCB is given several objectives:

  1. Maintaining the value of the Qatari Riyal
  2. Licensing, supervising, and regulating all financial services, businesses, and markets executed in or through Qatar
  3. Establishing a sector that operates according to market rules
  4. Promoting Qatar as an international hub for financial services
  5. Encouraging the growth of the financial sector

Empowering the Qatar Central Bank

The QCB has been granted the power to develop, implement, and enforce policies related to financial services activities and businesses conducted in Qatar, including those within the Qatar Financial Centre (QFC) and Qatar’s financial markets. The QCB will also appoint a Governor who will assume the capabilities and powers conferred on the Minister of Economy and Finance by the Qatar Financial Centre Law.

Policies for Regulating Financial Services

While the QCB is authorized to develop policies regarding financial services activities and businesses, the respective regulatory authorities will be responsible for implementing and enforcing these policies within their specific domains. This includes regulators for the QFC and the Qatar Financial Market Authority.

Financial Licensing and Prohibition

The Central Bank Law prohibits the conducting of financial services within Qatar without obtaining a license from the QCB. The following types of financial institutions require a license:

  • Banks
  • Insurance and reinsurance companies
  • Investment and financing companies
  • Other financial institutions

Foreign financial institutions may also be granted licenses to operate branches in Qatar.

Mergers and Acquisitions (M&A) Framework

The Central Bank Law accommodates financial institution M&A activities in Qatar. Mergers may be effected through either creating a new financial institution or assuming the legal personality of one of the merging entities with the prior consent of the QCB. A preliminary contract, economic feasibility study, and detailed financial and administrative restructuring is required before obtaining the necessary approvals from the QCB.

Qatar as a Hub for Financial Services in MENA

The Central Bank Law is a testament to Qatar’s ambition to become a hub for international financial services in the MENA region. By adhering to international standards and practices, Qatar can attract various players and foster a strong domestic financial services sector.

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