The Ministry of Finance hopes a single regulatory body will attract more foreign investment.
Qatar plans to start introducing international regulatory standards for its financial services industry this year as it competes with rivals such as Dubai to attract foreign investment, a Qatar regulatory official said on Tuesday.
The local stock exchange, the Qatar Central Bank and the Qatar Financial Centre (QFC) will come under the authority of a a single regulatory body which the Ministry of Finance may finish setting up as early as 2009, Phillip Thorpe, chairman of the Qatar Financial Centre Regulatory Authority, told Reuters.
Qatar, the world's largest exporter of liquefied natural gas, plans to spend about $130 billion on infrastructure and industry over the next few years to grow the economy and help attract foreign investment.
It set up the QFC in 2005 to offer international financial service companies such as HSBC Holdings Plc a regulatory environment that operates according to international standards and 100 % ownership. Foreign companies outside the QFC must have majority local partners.
"Companies have a choice where they base their headquarters in the region," Thorpe said. Having a single regulator "simplifies things further" and makes Qatar more attractive to foreign investment, he said.
Qatar's gross domestic product grew about 8% last year to $54 billion, spurred by higher oil prices and sales of natural gas.
"The economic activity happening here warrants something more on a par with major international financial markets," said Kapil Chadda, director of investment banking at HSBC in Qatar. "The regulator is the next logical step."
The authority will introduce regulations for the insurance industry, private banking and asset management, which are limited now, according to Thorpe.
"It provides clarity where there was a previous overlap between banking and asset management," said Chadda."
The single authority, which does not yet have a name, plans to improve the quality of company financial disclosures and accounting standards, and tighten listing requirements, Thorpe said, without being more specific.
Regulated to international standards, domestic companies may also find it easier to be accepted abroad, he said.
"Most of Qatar's financial services firms are healthy and are looking at growing their businesses," Thorpe said. "If you want to access other markets, you need the passport to do it, which means being regulated to a standard that is internationally recognised."