Chapter One: Regulation of the Subscription in the Primary Market of Government Bonds  

1. Issuing Decision:

It is issued and is included all the issuing terms.

2. Announcing of the issuing:

-  Qatar Central Bank is announcing the issuing.

-  The announcement is containing all the mentioned terms in the issuing decision, in addition to the dates of the bids’ receipt.

-  In case the subscription is limited to the banks operating in the State of Qatar, official letters will be addressed to them.

-  In case of opening the subscription to the public (banks and customers), it should be published in the newspapers and announced on television.

3. Subscription:

It should be according to the following rules:

-  Qatar Central Bank will receive the subscribers’ bids for three days, from 9:00 a.m. to 11:00 a.m.

-  The first day will be assigned for receiving the bids of all the banks operating in the State of Qatar.

-  The next two days will be assigned for receiving the bids of the customers, through public debt agents’ banks only, and they are:

-   Qatar National Bank.

-   Commercial Bank of Qatar.

-   Doha Bank.

-   Al-Ahli Qatari Bank.

-   Arab Bank.

-   HSBC Middle East.

-   BNP Paribas Bank.

-  Bids are submitted either by banks or by customers (through public debt agents’ banks), using the MT 198 SWIFT message specified for each of them.

-  The Subscriber may submit more than one bid; in this case, each bid should be submitted with a separate message.   

4. Allocation:

It occurs according to the following rules:

-  The allocation occurs in the third day after the deadline of receiving the bids in that day.

-  The allocation for banks and customers should be according to the stated terms in the issuing decision.

-  Qatar Central Bank notifies the banks with the results of the allocation (for banks and customers), using the MT 999 SWIFT message.

-  The agent banks should notify their customers, if the government bonds would be allocated for them.

5. Collection:

-   In the morning of the fourth day, Qatar Central Bank will collect the value of the government bonds, allocated for banks and customers through discounting from the clearing accounts of the bonds.

-   The agent banks will collect the value of the government bonds, allocated for the customers by discounting from their accounts or by any other method that both parties agreed upon.

6. Agent banks’ fees:

-  Qatar Central Bank will pay a commission for the public debt agent banks as 0.01% for each 10,000 Qatari Riyals, which have been allocated for their customers.

-  The due value of the commission is added to the clearing account of the agent bank.

-   The customers will be exempted from paying any registration fees.

7. General Rules:

-  When collecting the value of the allocated bonds, or paying the agents’ commission, the specified SWIFT message are to be used, or using the TELEX system for the banks that have not applied the SWIFT system yet.

-  QCB is not responsible for the SWIFT messages with incorrect data or that sent after deadline of accepting the bids.

8. The management:

The Public Debt, Banking Affairs and Issuing Department manages and supervises the procedures of subscription operations in the primary market.

Chapter Two: Transferring the Ownership of the Public Debt Securities  

The procedures of transferring the ownership of the bonds between the banks: 

1. When the bank performs selling or purchasing operations of government bonds, it should be notify the QCB (Public Debt, Banking Affairs and Issue Department) with the following information:

-  Issue Number

- Date of the operation

-  Names of the seller and the buyer and

- The number of bonds.

2. The due interest will be to the bearer of the bond on the interest due date.

3. QCB shall collect 10 Qatari Riyals for any registration of transferring the ownership, to be deducting from the buyer.

4. QCB will not change the records of the public debt securities ownership without confirmation of both parties.

Chapter Three: Transferring the Ownership of the Public Debt Securities  

1. Banks (Public Debt Agents) must fulfill all the requirements (SWIFT messages, customers’ contracts, and accounts system).

2. Government bonds will circulated in the secondary market according to the rules in the following guiding manual and through the electronic system:

2.1. Transactions for the benefit of the customers:

Each bank, wishes to purchase or sell government bonds, or to hold these bonds on behalf of the customers, is required to apply to QCB for authorization to act as custody agent for the government bonds.

Before beginning to act as a broker or a custodian for government bonds, a bank should have the approval of the QCB and completed its procedures, which include the following matters:

2.1.1. Preparing written agreement to be signed by all customers, whishing the bank to act as a broker for purchasing or selling of government bonds. The agreement should include:

-  The type of services, the rights and consequential responsibilities of each party;

-  The commissions, fees, and any other charges to be paid by customers;

-  The regularly procedures for settling disputes between the two parties.

2.1.2.  Related policies and procedures for the processing of customers’ orders, which should include the following:

-  Existing of a written manual, setting forth all policies and procedures concerning customer transactions;

-  Timely recording of all customers’ orders (with a registration date stamp);

- Practical procedures for transmitting all customers’ orders to the market in a timely manner (through setting a mechanism for ensuring the reception of the dealing room for the customers’ orders and processing them without any delay;

-  Notifying the customers with the processed operations, sending the confirmation to both parties (seller and buyer) and sending the settlement instructions electronically; and

-  Related procedures for the uncompleted operations (transactions that fail to settle).

2.1.3. Setting the appropriate policies and controls procedures on business with customers in government bonds, which should include:

-  Related policies to avoid conflicts of interest;

-  Appropriate risk controls, such as requiring payments or ensuring the approval of granting the credit line before processing the operation; and

-  Ensuring the adequacy of these investments for the customer.

2.1.4. Preparing the written agreement to be signed by all customers, wishing the bank to act as custodian concerning the holding of government bonds. This agreement could be either separate or combined with the brokerage’s agreement.

2.1.5. Setting the policies and procedures for custody, which should include:

-  Timely processing of all transactions;

-  Timely adding all interest and principal amounts;

-  Timely confirmations of all transactions and sending the statement to customers periodically;

-  Setting the appropriate control procedures, including periodical settlement between the customer’s account and the bank holding the customers’ government bonds at QCB and doing periodical review by independent internal auditor.

2.1.6. Comprehensively reviewing for the system and the procedures. In particular, the banks should confirm that:

-  The paid amounts, including the due interests, are calculated correctly.

-  Customers’ government bonds are held separately from those owned by the bank, so that, under no circumstances, the bank could not disposal on them, or use them in repurchase transactions, or use them for any other purpose. 

2.2.  Principal transactions (For the benefit of the bank):

Each bank, that wishes to be a market maker, through purchasing and selling government bonds for its own account, is required to obtain the approval of QCB. Each bank will need to demonstrate that the bank has efficiency, resources, policies and procedures to perform these activities accurately and in a sound manner that does not potentially endanger the bank’s resources and the deposits reviewed by QCB, would include:

2.2.1.      Existing risk management system:

-  It should include identification, quantification and controlling of all types of risks (related to the market, funding, credit, liquidity, settlement, operational and legal) in all banks’ activities as a market maker for the government bonds.

-  Controlling the special risks of repurchase transactions (such as risk of default).

2.2.2.  Operation and internal control, including;

-  Separating the work of the executive employees from the employees of the subordinated services for the executive operations;

-  A written manual, setting forth all policies and related procedures concerning market making activities;

-  Existing of maintaining documentation system for the processed transactions;

-  Existing of reporting system that provide data on trading activity in the market, the owned bonds and their profitability based on the provided prices from independent sources, confirming the ownership data of these bonds and settling the balances with the incoming statements from the Central Bank on a periodical basis;

-  Periodical review by the bank’s internal auditor; and

-  Setting a system to support all the related procedures for the operational, control, risk management, as well as for the analytical and trading support.

2.2.3.  Qualified staff with an experience in market making activities.

2.2.4.  Appropriate policies for performing the market making activity, including: 

-  Policies for conflicts of interest (for example, the personal trading by bank employees or their use for any undeclared data to public for processing purchasing and selling operations); and

-  Applying the related principles of the processing behavior and defining them to the employees.