Qatar is banning unregulated financial advisers as part of a continuing effort to clean-up financial services in the region.
The move comes after last year’s decision by the Qatar Financial Centre Regulatory Authority (QFCRA) not to proceed with Qualifying Regulated Overseas Pension Schemes (QROPS).
The ban on advisors, termed as ‘Law 13’, is part of a wider raft of measures aimed at cracking down on unauthorised financial firms and their representatives from drumming up business in Qatar.
Any company wanting to undertake financial business in the country has to be licensed by one of the three regulatory bodies and part of the move is to block independent financial advisors from outside Qatar flying in to deal with clients.
On top of this, everyone working as a financial advisor has until February 2014 to gain qualification as a level four advisor in the Qualifications and Credit Framework.
Centre of financial excellence
This means advisors will be of the same standard expected by the UK’s Financial Services Authority after they implemented the retail distribution review to help protect clients and boost the qualifications of those offering advice.
Qatar also wants to establish a reputation as a well-run and effectively regulated centre of finance which is keen to make its mark on the global stage.
However, it looks unlikely that the country will change its regulatory framework to allow QROPS to be set-up there.
Under QROPS, a British expat worker can transfer their pension pot from its UK base to a pensions provider based abroad and make it more tax efficient.
And a recent rule change by HM Revenue and Customs has seen several offshore providers see business boom as expats take advantage and protect their pension pot.
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Qatar QROPS advice
The decision by the QFCRA was a setback for those firms interested in taking on the new business because they will now see clients wanting to move their pension pot out of the UK having to take advice with a firm not operating in the Qatar Financial Centre (QFC).
The QFRCA opted not to allow QROPS because of concerns over how the market will develop after the HMRC rule change – and the potential for jurisdictions to be de-listed if schemes do not fully comply.
Though the pension decision is only relevant to those firms working in the QFC – an area that was especially created in Doha in 2005 to attract international financial firms – people in Qatar can still get relevant advice from businesses outside the zone because they will be regulated by the Qatar Central Bank.