Doha, Qatar:– The International Swaps and Derivatives Association (ISDA) has recognised Qatar Financial Centre (QFC) as an effective netting regime and published a positive legal opinion to its members, recognising the QFC as a netting friendly jurisdiction.
This is a significant milestone and recognition for Qatar’s financial market infrastructure and the world-class legal framework established by the QFC. This initiative will allow financial institutions and corporates in the QFC and in the State of Qatar, through the QFC, to confidently manage their risk exposure.
ISDA has published a legal opinion prepared by an international law firm in Qatar, Simmons & Simmons LLP, for its members. The legal opinion confirms that financial netting arrangements under the ISDA Master Agreements are enforceable in the QFC.
The QFC Netting Regulations and the supporting provisions in the QFC Insolvency Regulations, provide legal certainty in the QFC as to the enforceability of close-out netting for financial transactions such as derivative transactions in specified circumstances, including in the case of insolvency of a party to the transaction.
Yousuf Mohammed Al-Jaida, Chief Executive Officer, QFC Authority said: “ISDA’s recognition of the QFC’s regime is a vital contribution to the State of Qatar’s financial market infrastructure. In Qatar, the regime will provide the first of its kind recognition for close-out netting to Qatar’s financial institutions, including QFC firms, to benefit from this important risk mitigating mechanism.”
Nasser Al-Taweel, Chief Legal Officer, QFC Authority: “The ISDA recognition should encourage Qatar’s financial institutions to carry out their financial transactions through special purpose companies in the QFC.”
The QFC netting regime is based on ISDA’s Model Netting Act. The ISDA Model Netting Act provides a framework that has been adopted by major international financial jurisdictions that recognise netting arrangements.
Close-out netting is commonly used to manage default risks in derivative contracts in over-the-counter derivatives transactions. It is a legal mechanism where two counterparties agree to offset their obligations upon default, in priority to the normal application of insolvency rules which are typically used when a debtor is being wound up.
The QFC Insolvency Regulations, including the netting provisions, are part of QFC’s comprehensive legislative framework and an important part of its value proposition to corporates and financial institutions looking to benefit from the QFC’s netting regime for financial transactions.
The QFC endeavours to promote Qatar as a lucrative business destination. Companies that wish to establish a business in the QFC are guided throughout the process by a dedicated QFC relationship manager who assists them in obtaining a license and operating a business. QFC firms enjoy competitive benefits, such as operating within a legal environment based on English common law, the right to trade in any currency, 100% foreign ownership, 100% repatriation of profits, 10% corporate tax on locally sourced profits, and an extensive double tax treaty agreement network with 60+ countries. In addition, the Employment Standards Office of the QFC embodies a unique Administrative Employment Dispute Resolution Centre operating under International Labour Organization (ILO) standards providing conciliation and adjudication services free of charge to resolve workplace conflicts.
-Ends-
ABOUT THE QATAR FINANCIAL CENTRE
The Qatar Financial Centre (QFC) is an onshore business and financial centre located in Doha, providing an excellent platform for firms to do business in Qatar and the region. The QFC offers its own legal, regulatory, tax and business environment, which allows 100% foreign ownership, 100% repatriation of profits, and charges a competitive rate of 10% corporate tax on locally sourced profits.
The QFC welcomes a broad range of financial and non-financial services firms.
For more information about the permitted activities and the benefits of setting up in the QFC, please visit www.qfc.qa
@QFCAuthority | #QFCMeansBusiness
CONTACT
QFC: Hala Kassab | T. +974 3300 0216 | E. h.kassab@qfc.qa
BLJ Worldwide: Yasser Hamdy | +974 5592 8045| E. yasserh@bljworlwide.com
© Press Release 2018Disclaimer: The contents of this press release was provided from an external third party provider. This website is not responsible for, and does not control, such external content. This content is provided on an “as is” and “as available” basis and has not been edited in any way. Neither this website nor our affiliates guarantee the accuracy of or endorse the views or opinions expressed in this press release.
The press release is provided for informational purposes only. The content does not provide tax, legal or investment advice or opinion regarding the suitability, value or profitability of any particular security, portfolio or investment strategy. Neither this website nor our affiliates shall be liable for any errors or inaccuracies in the content, or for any actions taken by you in reliance thereon. You expressly agree that your use of the information within this article is at your sole risk.
To the fullest extent permitted by applicable law, this website, its parent company, its subsidiaries, its affiliates and the respective shareholders, directors, officers, employees, agents, advertisers, content providers and licensors will not be liable (jointly or severally) to you for any direct, indirect, consequential, special, incidental, punitive or exemplary damages, including without limitation, lost profits, lost savings and lost revenues, whether in negligence, tort, contract or any other theory of liability, even if the parties have been advised of the possibility or could have foreseen any such damages.
