DOHA, 20 April 2009
Following is a speech given by Mr Stuart Pearce, CEO and Director General of the Qatar Financial Centre (QFC) Authority during the 2nd Leaders in Islamic Finance Conference at the W Hotel & Residences, Doha, Qatar.
Ladies and Gentlemen
As Salaam Aleikum.
Thank you for allowing me the opportunity to speak to you about the Qatar Financial Centre, and the gateway that it provides to Islamic finance. Perhaps I can begin with a short summary of what the QFC is and why it was created. The QFC – which is an onshore legal and regulatory environment (not a free zone) is now some 4 years old. It has rapidly achieved a positive and beneficial profile for itself and for Qatar internationally by engaging with senior industry figures such as yourselves. We have reached a point that I am pleased to say that even in these difficult times for the global finance industry we have 50% more firms making enquiries now than we did a year ago. That goes for firms across the financial spectrum and across the globe.
The QFC was established by the State of Qatar to support its vast investment and development programme, amounting to more than $140 billion. As part of its economic diversification strategy, Qatar wishes to build a world class financial sector.
The country sees this as an essential pre-requisite to enable it to engage fully in the regional and global economy, and to contribute to the growth of financial services in the Gulf and Middle East in general.
A world class business and legal construct is now in place, and the QFC has grown into a sizeable organization which is qualified, ready and willing to support the success of firms entering the Qatari and regional market. The QFC consists of 4 main bodies. I work for the QFC Authority which broadly speaking drives the commercial strategy of the organization. The QFC Regulatory Authority is the independent regulatory body that authorizes and regulates firms licensed to operate from the QFC.
The QFC Civil and Commercial Court hears cases brought to it by firms in the QFC, and the QFC Regulatory Tribunal hears appeals by firms against decisions by the QFC.
We have come a very long way in a short period. Over 100 licenses have been issued to date, for example to banks like Barclays, ICBC, Credit Suisse and Morgan Stanley, as well as to insurers and brokers like AXA, Marsh and Zurich. More importantly some 20% of our licensed firms are Qatari owned or have Qatari interests, and several of the regulated firms are Shari’a compliant, including QInvest, QFIB, Al Mal and Masraf Al Rayan.
This is a very important point. The QFC was always intended to attract international and regional financial institutions and firms that support the finance industry to establish in Qatar, and to help deepen and strengthen its financial sector. But this was never meant to be at the expense of the local financial sector. The fact that some 20 of our firms are indeed of local ownership proves that we are adding to local capacity rather than replacing it. This is a very important trend which will certainly grow.
The Islamic finance rulebook was developed by the QFC Regulatory Authority early on in the development of the QFC. This therefore makes another important point.
Encouraging the role of Islamic finance in Qatar and the State’s investment programme is an integral part of the QFC’s remit, but it is not exclusively so.
We talk to firms seeking QFC licenses to offer Shari’a compliant services in exactly the same was as we do firms wishing to provide conventional financial services. What new capacity do they bring? What is their business plan? What organizational structure do they propose?
I am delighted that we have been acknowledged by the Islamic financial community and the conventional financial community alike as an attractive and beneficial platform which they wish to aspire to.
We are often told- particularly by local and regional firms - that a QFC license is seen by their clients as a stamp of quality that helps them develop their business, and this is one of our primary aims.
We have 3 projects (all of which have Islamic content) which will be launched this year which will be of interest to you.
The first is Qatar Insurance services which is a technology-based reinsurance trade fulfillment system which will provide a secure, structured electronic service, and will facilitate transaction workflow, the production of documentation and effective management information to local, regional and global insurance firms.
It will provide a very solid foundation for Qatar’s objective to become the region’s leading insurance and reinsurance centre. QIS is set to go live mid-year.
The second is Qatar Finance and Business Academy. QFBA is a specialised educational institution for the financial services sector, based in Doha, and developed through a partnership between Qatar Foundation (QF) and the Qatar Financial Centre Authority (QFCA).
Its prime objective is to support the government’s vision for Qatar, and its development as a leading financial services centre, through learning, development and research. Courses on Islamic finance are an integral part of the business plan for QFBA.
The programmes and services offered by the QFBA in partnership with leading international financial learning and accreditation institutions will contribute to the achievement of this goal. Initially focused on Qatar, the QFBA will progress to deliver financial services learning and development to both regional and international clients at every technical and executive level. The first courses of QFBA will take place in the early Autumn.
Finally, in October we will be launching Qatar Finance – the Ultimate Resource, or QFinance, in partnership with Bloomsbury Publishing of the UK. QFinance will be the first financial knowledge and best practice platform of its kind.
Created by 300 of the world’s leading experts in the field, it will comprise a 2 million word database that will give both online and in print access to the latest information on current topics, best practice across all key areas in finance and financial services, which will of course include Islamic financial services. It will address the daily information and advice needs of an increasingly global industry in a clear, accessible and regularly updated form. One of the members of the senior Strategic Advisory Board for QFinance is Dr Hatem Kharanshawi who as many of you will know is the Head of Islamic Studies at Qatar University.
So we have been busy over the past 4 years and will have a busy year ahead!
The QFC reflects what is happening in Qatar right now. Qatar is a small but ambitious country with a very clear vision of where it wants to be in 10 years time, and in 20 years time. It wants to use its growing wealth to the benefit of its future generations, and it wants to contribute to global development and social and humanitarian causes. When the QFC was first established in 2005 the words “Progressive Thinking” were emblazoned across the front of its building (at that time shared with the Ministry of Economy and Commerce). This underlying intent still underscores the attitude of both Qatar and the QFC.