Qatar bourse implements DvP system
Doha, May 17, 2011
Qatar Exchange has successfully implemented the final phase of the Delivery Vs Payment (DvP) post-trade mechanism, following the first phase, which went live in April.
The market has now processed trades for a full week under the new DVP environment, with great operational success, said the Qatari bourse in a statement.
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, the statement added.
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, Qatar Exchange puts itself in line with international best practices related to settlement cycles, said a top official.
Andre Went, CEO of Qatar Exchange pointed out that the implementation of DvP at the bourse was a major milestone in the development of the Qatari marketplace.
Qatar Exchange, he said, was the first exchange in the region to offer full DvP. "DvP is a major requirement of MSCI for the qualification as an emerging market," Went noted.
"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," he explained.
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, Went added.-TradeArabia News Service