Qatar: Controls to regulate dividend distributions in the Qatari capital market were issued to boost activity in the financial sector and increase liquidity volume.

Introduced by the Qatar Financial Markets Authority, the regulations will include substantial changes in the mechanisms of annual dividends distribution to shareholders in public shareholding companies listed on the Qatar Stock Exchange. These decrees will also control the interim dividend distribution quarterly and semi-annually for companies intending to do so.

CEO of QFMA Tamy bin Ahmad Al-Binali announced that the rules will be implemented in 2024.

He said: “QFMA is making great efforts to work continuously to develop its legislation and regulations with the aim of providing an attractive legislative environment for investment in line with the best international and regional standards and practices.”

The CEO explained that under the rules, QSE-listed public shareholding would be permitted to engage in dividend distribution on an interim basis every three or six months or annually as is currently in effect. The companies will also be required to distribute dividends within a certain period, which shall not be exceeded.

He added that public shareholding companies will no longer be authorized to distribute dividends and bonus shares to shareholders, highlighting that “this responsibility will be assumed from now by Edaa, which will make dividend distribution to shareholders on behalf of the public shareholding companies.”

Edaa, or Securities Depository Center Co., is the licensed service provider under the QFMA that provides various essential services related to securities and financial instruments. The company’s core services include safekeeping, clearing, and settlement of securities and other financial instruments listed on the Qatar Exchange.

He said: “Dividends distribution through Edaa aims to facilitate and ease the distribution procedures, preserving shareholders’ dividends with a reliable party, unifying the procedures and party of distribution, and accelerating the process of distribution and delivery to such beneficiaries.”

Al-Binali added that the rules will help attract a new category of investors to the stock market and enhance investor confidence in the operational performance of listed companies, the strength of their financial position and their ability to generate real interim revenues and cash flows.

He further stated: “The interim dividend distribution enhances the expectations of investors in the markets regarding achieving good financial results at the end of the financial year.”