Regulations on the Establishment and Operation of Financial Leasing Companies in the State of Qatar

1 2009 Regulations No. (11) of 2009

Regulations on the Establishment and Operation of Financial Leasing Companies

Article 1 Definitions In the context of these Regulations, the words and expressions listed below shall have the meanings respectively assigned to them hereinafter, unless the context requires otherwise:

1. "The Authority": The Qatar Financial Services Regulatory Authority.
2. "The Law": Law No. (6) of 2006 Issuing the Law of the Qatar Financial Centre and its Amendments.
3. "The Company": A financial leasing company established in accordance with these Regulations.
4. "The Minister": The Minister of Finance.
5. "The Council": The Qatar Financial Centre Regulatory Council.
6. "The Board": The Board of Directors of the Company.
7. "The Shareholders": The shareholders of the Company.
8. "The Regulations": These Regulations on the Establishment and Operation of Financial Leasing Companies.
9. "The Capital": The paid-up capital of the Company.
10. "The Financial Year": The period of twelve months commencing from the first day of January of each year until the last day of December of the same year, or such other period as determined by the Authority.
11. "The Auditor": The external auditor appointed by the Company.
12. "The Central Bank": The Qatar Central Bank.
13. "The State": The State of Qatar.
14. "The QFC": The Qatar Financial Centre.
15. "The QFC Law": The Law of the Qatar Financial Centre.
16. "The QFC Regulations": The regulations issued by the Authority under the QFC Law.
17. "The QFSRA": The Qatar Financial Services Regulatory Authority.
18. "The Minister": The Minister of Finance.
19. "The Council": The Qatar Financial Centre Regulatory Council.
20. "The Board": The Board of Directors of the Company.
21. "The Shareholders": The shareholders of the Company.
22. "The Regulations": These Regulations on the Establishment and Operation of Financial Leasing Companies.
23. "The Capital": The paid-up capital of the Company.
24. "The Financial Year": The period of twelve months commencing from the first day of January of each year until the last day of December of the same year, or such other period as determined by the Authority.
25. "The Auditor": The external auditor appointed by the Company.
26. "The Central Bank": The Qatar Central Bank.
27. "The State": The State of Qatar.
28. "The QFC": The Qatar Financial Centre.
29. "The QFC Law": The Law of the Qatar Financial Centre.
30. "The QFC Regulations": The regulations issued by the Authority under the QFC Law.
31. "The QFSRA": The Qatar Financial Services Regulatory Authority.

Article 2 Objective The objective of these Regulations is to regulate the establishment and operation of financial leasing companies in the State of Qatar, in accordance with the provisions of the Law and the QFC Regulations.

Article 3 Establishment

1. A financial leasing company may be established in the QFC as a company limited by shares, in accordance with the provisions of the QFC Law and these Regulations.
2. The Company shall be established by a license issued by the Authority, subject to the conditions and requirements set forth in these Regulations.
3. The Company shall not commence its business activities until it obtains the license from the Authority.

Article 4 Capital Requirements

1. The minimum paid-up capital of the Company shall be as follows: a. QAR 5,000,000 for a company engaged in financial leasing activities only. b. QAR 10,000,000 for a company engaged in financial leasing and other financial activities permitted by the Authority.
2. The Authority may require the Company to maintain a higher level of capital depending on the nature and scale of its activities.
3. The Capital shall be paid in cash and shall not be reduced below the minimum required level.

Article 5 Shareholders

1. The Company shall have at least one shareholder.
2. The Authority shall approve the shareholders of the Company, and shall verify their suitability, financial soundness, and reputation.
3. The Authority may require the Company to provide information about its shareholders, including their identity, source of funds, and ownership structure.
4. The Authority may reject the approval of any shareholder if it deems that such approval would be detrimental to the stability of the financial system or the reputation of the QFC.

Article 6 License

1. The Authority shall issue a license to the Company upon satisfaction of the conditions set forth in these Regulations.
2. The license shall specify the activities that the Company is permitted to undertake.
3. The Company shall not undertake any activity other than those specified in the license without the prior written approval of the Authority.
4. The license shall be valid for one year from the date of issuance, and may be renewed upon application to the Authority.
5. The Authority may suspend or revoke the license if the Company fails to comply with the provisions of these Regulations or the QFC Regulations.

Article 7 Corporate Governance

1. The Company shall establish a Board of Directors consisting of at least three directors, at least one of whom shall be independent.
2. The Board shall be responsible for the overall management and supervision of the Company's business activities.
3. The Board shall establish committees as necessary, including an audit committee, a risk committee, and a remuneration committee.
4. The Board shall ensure that the Company has adequate systems and controls in place to manage risks and ensure compliance with laws and regulations.

Article 8 Risk Management

1. The Company shall establish a risk management framework that is commensurate with the nature, scale, and complexity of its activities.
2. The risk management framework shall include policies and procedures for identifying, measuring, monitoring, and controlling risks.
3. The Company shall appoint a Chief Risk Officer who shall be responsible for overseeing the risk management framework.
4. The Chief Risk Officer shall report directly to the Board or the risk committee.

Article 9 Internal Controls

1. The Company shall establish adequate internal controls to ensure the integrity of financial reporting and the safeguarding of assets.
2. The internal controls shall include policies and procedures for authorization, verification, reconciliation, and reporting of financial transactions.
3. The Company shall conduct regular internal audits to assess the effectiveness of its internal controls.

Article 10 Compliance

1. The Company shall establish a compliance function that is independent of the business units.
2. The compliance function shall be responsible for monitoring and ensuring compliance with laws, regulations, and internal policies.
3. The Company shall appoint a Chief Compliance Officer who shall be responsible for overseeing the compliance function.
4. The Chief Compliance Officer shall report directly to the Board or the compliance committee.

Article 11 Reporting

1. The Company shall submit regular reports to the Authority, including financial statements, risk reports, and compliance reports.
2. The financial statements shall be prepared in accordance with International Financial Reporting Standards (IFRS) and audited by an external auditor approved by the Authority.
3. The Company shall submit its annual financial statements to the Authority within four months of the end of the financial year.
4. The Company shall submit interim financial statements to the Authority within two months of the end of the first half of the financial year.

Article 12 Auditing

1. The Company shall appoint an external auditor approved by the Authority.
2. The external auditor shall audit the financial statements of the Company annually.
3. The external auditor shall report directly to the Board and the Authority.
4. The external auditor shall have access to all books, records, and documents of the Company.

Article 13 Confidentiality

1. The Company shall maintain the confidentiality of all information obtained in the course of its business activities.
2. The Company shall not disclose any confidential information to any third party without the prior written consent of the client or as required by law.
3. The provisions of this Article shall not prevent the Company from disclosing information to the Authority or any other regulatory body as required by law.

Article 14 Prohibited Activities

1. The Company shall not engage in any activity that is prohibited by the Law or these Regulations.
2. The Company shall not engage in any activity that is detrimental to the stability of the financial system or the reputation of the QFC.
3. The Company shall not engage in any activity that involves money laundering or terrorist financing.

Article 15 Supervision

1. The Authority shall supervise the Company to ensure compliance with the provisions of the Law and these Regulations.
2. The Authority may conduct inspections and audits of the Company at any time.
3. The Company shall cooperate with the Authority and provide all information and documents requested by the Authority.
4. The Authority may impose sanctions on the Company if it fails to comply with the provisions of the Law or these Regulations.

Article 16 Sanctions

1. The Authority may impose the following sanctions on the Company: a. A written warning. b. A fine. c. Suspension of the license. d. Revocation of the license. e. Any other sanction as determined by the Authority.
2. The Authority shall notify the Company of any sanction imposed on it.
3. The Company may appeal any sanction imposed on it to the Council.

Article 17 Amendments

1. The Authority may amend these Regulations from time to time as necessary.
2. The Authority shall publish any amendments to these Regulations in the Official Gazette.
3. The Company shall comply with any amendments to these Regulations.

Article 18 Transitional Provisions

1. Any financial leasing company established in the QFC prior to the issuance of these Regulations shall be deemed to have obtained a license under these Regulations.
2. Such companies shall comply with the provisions of these Regulations within six months from the date of issuance of these Regulations.
3. The Authority may grant extensions to such companies if it deems necessary.

Article 19 Effective Date

1. These Regulations shall come into force on the date of their publication in the Official Gazette.
2. The Minister shall issue any necessary decisions to implement these Regulations.

Article 20 Repeal

1. The Regulations on the Establishment and Operation of Financial Leasing Companies issued by the Minister of Finance in 2009 are hereby repealed.
2. Any references to the repealed Regulations in any other regulations or documents shall be deemed to refer to these Regulations.

Article 21 Interpretation

1. The Authority shall be responsible for the interpretation of these Regulations.
2. Any disputes arising from the interpretation of these Regulations shall be resolved by the Authority.

Article 22 Miscellaneous

1. The Authority may issue any necessary guidelines or circulars to implement these Regulations.
2. The Company shall comply with any guidelines or circulars issued by the Authority.

Article 23 Final Provisions

1. These Regulations shall be read and construed in accordance with the Law and the QFC Regulations.
2. In the event of any conflict between these Regulations and the Law or the QFC Regulations, the Law or the QFC Regulations shall prevail.

Article 24 Amendments to the Law

1. The Authority may amend these Regulations to reflect any amendments to the Law or the QFC Regulations.
2. The Authority shall publish any amendments to these Regulations in the Official Gazette.

Article 25 Implementation

1. The Authority shall be responsible for the implementation of these Regulations.
2. The Authority may delegate any of its powers under these Regulations to any person or body.

Article 26 Definitions in the Law

1. The definitions in the Law shall apply to these Regulations unless otherwise specified.
2. Any undefined terms in these Regulations shall have the meanings assigned to them in the Law.

Article 27 Application

1. These Regulations shall apply to all financial leasing companies established in the QFC.
2. These Regulations shall not apply to any other type of financial institution.

Article 28 Exemptions

1. The Authority may exempt any company from any provision of these Regulations if it deems necessary.
2. The Authority shall publish any exemptions in the Official Gazette.

Article 29 Review

1. The Authority shall review these Regulations every three years.
2. The Authority may amend these Regulations based on the review.

Article 30 Publication

1. These Regulations shall be published in the Official Gazette.
2. These Regulations shall be available on the website of the Authority.

Article 31 Final

1. These Regulations shall be signed by the Minister and the Chairman of the Council.
2. These Regulations shall be effective from the date of their publication in the Official Gazette.

---

End of Document