Qatar has been reclassified as an emerging market, from frontier market, as it meets enough quantitative criteria for qualification.
In June, MSCI also announced that as of May 2014 the indices of both Qatar and the UAE would be upgraded.
S&P Dow Jones said the decision to promote is supported by the foreign ownership limit, while still viewed as below the standards of most other emerging markets, it has become a point of emphasis for change in Qatar as several large companies have increased their limits to encourage further foreign investment. Market participants expect more efforts to increase limits.
The delivery versus payment settlement system was introduced in 2011 and enhanced twice in 2012 to ensure full protection of investors’ assets in case of rejection by the seller.
Securities lending and borrowing facilities have been launched at the Qatar Exchange. The facilities are currently only available for use by liquidity providers and as a mechanism to prevent settlement failures.
Market participation in Qatar is viewed as robust and ease of entry into the market is in line with the standards set by other emerging markets.
The United Arab Emirates has been reclassified as an emerging market, from frontier, as it meets all quantitative criteria for qualification.
In addition, the consensus among market participants is that emerging market status is the correct classification for the following reasons. The current foreign ownership limit of 49% is considered satisfactory and in line with a few other countries currently designated as emerging. There is an expectation that this limit will be relaxed in the coming years.
All three UAE exchanges now use delivery versus payment settlement. DFM and ADX have enhanced the new procedure on DVP settlement and started to implement the new procedures of buyer cash settlement for trades that started on May 5. The new procedure means that a buying investor will be paid cash compensation in an unlikely event where securities are unavailable for delivery to the buying investor.
The board of directors of the United Arab Emirates Securities and Commodities Authority approved a market-maker regulation along with related regulations for securities lending and borrowing, short selling and liquidity in October 2012.
Greece and South Korea have been reclassified as developed and Taiwan reclassified as an emerging market across all global benchmarks to bring consistency across S&P and Dow Jones branded indices.
Egypt and Morocco will remain emerging markets. Bahrain, Kuwait and Oman will remain frontier markets. Saudi Arabia will remain classified as a standalone market. No changes will be made to the treatment of Chinese A-Shares. S&P Dow Jones Indices will continue to monitor these markets.
All changes will be effective at the annual reconstitution in September 2014.