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Qatar bourse adopts new rule eyeing emerging mkt tag

March 17, 2011 4:11 by Reuters

The Qatar stock exchange on Thursday moved a step closer to acquiring emerging market status from influential index compiler MSCI by adopting a standard international settlement system for stock trading.
The bourse, under review by the MSCI for an emerging market tag for the last two years, said effective April 11 it will switch to a “delivery versus payment” (DvP) and will seek to implement reforms in the equity markets throughout the year.
“These changes…attract more participants when achieving the ultimate goal of upgrading the classification of Qatar to emerging market status in MSCI Index,” said Nasser Al Shaibi, chief executive of Qatar Financial Markets Authority, in a statement.
A DvP system ensures share ownership will not be transferred to the buyer until they have paid for the acquisition. Consequently, payment and ownership transfer is near-simultaneous, whereas at present delivery of securities is not related to payment.
DvP is the standard international settlement system and MSCI has said its absence was a key reason for maintaining frontier market status for both Qatar and UAE in its 2010 review.
Both the countries remain on watch for a potential upgrade in June.
Dubai Financial Market also plans to introduce a delivery versus payment settlement system by the end of March.
In a separate statement, the Qatar bourse said it will rejig its index following a review and will replace Salam International, a diversified holding company, with Qatar National Cement.
(Reporting by Dinesh Nair; Editing by Amran Abocar)