QSE introduces revised liquidity provider scheme; to cut liquidity costs

The Qatar Stock Exchange (QSE) has introduced a revised liquidity provider (LP) scheme, a move that significantly lowers liquidity costs and provides more depth in the order book.

As part of revising the scheme, the QSE included the recent amendments and new criteria in the standardised and approved contracts for the LP activity, effective from September 1, 2024.

These criteria will be reviewed on a semi-annual basis to ensure their alignment with international best practices and market needs, a bourse spokesman said.

These amendments are part of a package of incentives offered by QSE to develop the LP activity in the Qatari market, contributing to increased liquidity and trading, attracting more investors, and enhancing the competitiveness of the Qatari market.

This development is part of the ongoing efforts of the Qatar Financial Markets Authority (QFMA) and QSE to improve market efficiency and increase its appeal to both local and international investors, thereby contributing to the sustainable growth of the Qatari market.

A LP is a licensed financial services company authorised to engage in liquidity provision activities, which enhance the liquidity of listed securities by continuously offering buy or sell prices for a specific security, in accordance with terms and conditions outlined in the agreement between the liquidity provider and the listed company.

"The introduction of the revised LP scheme is set to significantly lower liquidity costs and provide more depth in the order book, ensuring a more efficient, stable and transparent trading environment," the QSE spokesman said.

As part of the incentive package, the QFMA recently introduced regulations for dividend distribution for listed joint-stock companies, allowing them to distribute interim dividends. In light of this step, some listed companies distributed semi-annual dividends in 2024.

"This important step enhances the attractiveness of the Qatari market by providing shareholders with more frequent returns on their investments, thereby increasing investor confidence and boosting trading activity in the market," the QSE spokesman said.

Interim dividends provide a steady return on investment before the company’s final year-end dividend, offering investors regular income and a more predictable cash flow, he said, adding this approach not only boosts investor confidence but also encourages long-term commitment to the market, fostering greater market participation and liquidity.

The QSE is continuously working on developing investment tools by launching various initiatives that align with market needs and international best practices.

As part of its strategy, the exchange is committed to enhancing market efficiency, transparency, accessibility, and ensuring a better trading experience for all market participants.