Central Registration Department September, 2010 www.qe.com.qa

Agenda Introduction Objectives Current Market Model Investor Services Issuer Services Member Services

Introduction Central Registration Department is responsible for Securities safe-keeping, registration, depository and stock transfers. CRD Received all Listed shareholders companies data on10/8/1998 CRD policy is to Gain investors confidence through applying an efficient control in a secured environment when dealing with investors and all other market members.

Objectives Confidentiality of investors and issuers data Deliver accurate information to QE investors and issuers through several reports and interfaces Implement Settlement Risk management Broker activities controlled by a settlement cap Bank guarantees to cover the shortage in cash settlement. Trading system and CRD systems, No short selling allow in QE are tightly coupled. SAS Risk Management system Run daily settlement process

Current Market Model 3 Brokers A transaction between a buyer and seller is matched and its terms (ie, price, quantity, settlement date) are agreed upon Computation of the obligations of each the buyer and the seller is done by the trading department. Brokers execute trades in the market and clear their own obligations on the settlement day Cash obligations are communicated to the settlement bank (now central bank, before it was Doha bank). The commercial banks hold settlement accounts of the brokers. Registration department, acting as record-keeper of securities, transfers ownership of the traded securities (depository/registry) Depository Participants or Custodians, acting as safe-keeper of assets, and reports positions. Can participate in settlement process arranging transfer of securities and cash for the settlement process 1 2 4 Trade Execution Clearing Settlement Bank (QCB) Commercial Banks 5 CSD – Depository / Registry 6 Depository Participants / Custodians

Settlement Cycle: T+3 Confirmations by T+1 by intermediaries Confirmations by T+2 to the settlement bank Settlement on T+3

Current Members Brokers Custodians The Group Qatar Securities Dlala Dlala Islamic Islamic Financial Services International Financial Services Gulf Investment Group – GIG HSBC (mainly targeting international investors)

Investor Services Account Opening Account Management Performing Stock/Registry transfers by moving shares between QE Registry account and Trading account for the same investor Family / Inheritance transfers Blocking/Unblocking investors due to incomplete information Printing statement of accounts for investors. Printing "To whom it may concern" certificates. Consolidating multiple NIN's for the same Investor. Pledging / Unpledging shares Splitting shared NIN's by multiple investors.

Account Opening Process Investor Application Form Available on the QE website Supplementary documentation 100 QR fee NIN registration once application is processed Trading / Custody account to be opened before commencing trading Account is ready for next trading session

Issuer Services Maintaining shareholder register for the issuers Providing shareholder register to issuers for AGMs Implementing individual ownership limits Implementing foreign ownership limits Restricting board members from trading in their companies during certain periods (AGM) Freezing/Unfreezing shares of Founders, Board members, court order, etc (initial listing period) Corporate Action processing Registering new shares underwriting to increase capital Split/Consolidate shares/Bonus/merger Helping the listed companies in calculating Cash dividends by sending them their latest investors Changing ownership limits for listed companies according to the corporate event performed Cash dividends are distributed directly by the issuers

Corporate Actions Process The corporate action season is normally Feb-Apr and Jul-Aug Market has witnessed dividends, bonus issues, rights issue, splits and mergers Record dates are announced and all trades are settled prior to the record date Payment date is announced subsequent to ratification of dividend in the AGM/Board meeting All trading is suspended on AGM date Resumed AGM + 1 for dividends and rights issue. Resumed AGM + 2 for bonus issues and splits. Dividends are distributed by the companies through cheques and wire transfers The central registry updates the securities account holdings against confirmation received from issuer companies in the event of bonus, rights, IPOs etc

Member Services Defining new brokerage firms at QE and assigning their settlement cap formula Risk Management Defining new Custodians at QE Creating custody account for each client and define it as a central Inventory account Collecting Bank guarantees from Brokers and reflecting them into their settlement cap Check if there are any rejected trades available in the system Sending clearing reports to the Qatar Central Bank for cash settlement between brokers via swift messages Run Daily Settlement batch job

Future Roadmap DVP SWIFT messaging for securities settlement Buy-in and cash close out Participation of custodian in cash settlement Securities Lending and Borrowing SWIFT messaging for securities settlement Securities alledgment Statement of holdings Corporate actions messages Non-elective Elective Enhancing risk management VaR based risk model for default fund and settlement caps Bonds processing

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