Qatar Exchange implements DvP mechanism

Source: Qatar Exchange

Qatar Exchange announced on May 16th, 2011 that it has successfully completed the introduction of the full DVP mechanism, following the first phase, which went live on April 11th 2011.

The market has now processed trades for a full week under the new DVP environment, with great operational success.

The new operational procedure allows all local and international investors using the services of custodians to keep control over their securities held under custody until they validate trades executed on their behalf. In addition, the new process also offers a mechanism for the management of fails which involves a buy-in service and cash close-out feature in order to guarantee the final settlement of all trades. By adopting DvP, QE puts itself in line with international best practices related to settlement cycles.

Andre Went, CEO of Qatar Exchange said: "The implementation of DvP at Qatar Exchange is a major milestone in the development of the Qatari marketplace. It will strengthen the confidence of international investors that Qatar is a safe and efficient market to invest in. It is also a major pre-requisite prior to the launch of other very important business development initiatives in the new products and post-trade areas".

The second phase of the DVP implementation introduced the fails management procedures, including the buy-in services, whereas the first phase saw the participation of the custodians in the cash settlement.

Qatar Exchange is the first exchange in the region to offer full DVP. In addition to that, the DvP is a major requirement of MSCI for the qualification as an emerging market.

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