On 1 January 2015, new prudential rules for Investment Management and Advisory firms in the Qatar Financial Centre (QFC) came into force. The revisions, contained in the Investment Management and Advisory Rules 2014 (INMA), support the QFC Regulatory Authority’s commitment to the continued development of the QFC as a leading financial and business centre in the Middle East and as a viable alternative to the UAE’s Dubai International Financial Centre (DIFC). The Dubai Financial Services Authority (DFSA) made changes to its prudential rules back in 2012 in order to align the DIFC regime more closely with the requirements of Basel III.

It is often noted that the regulatory regimes of financial and business centres established in the Middle East with the aim of attracting international financial services institutions do not reflect the reality of the nature of the institutions that they host. The decision of the QFC Regulatory Authority to simplify its prudential rules in respect of investment management and advisory business and set them down in a stand-alone user-friendly rulebook represents a step in the right direction to addressing this perceived in-balance. This Client Alert outlines the new prudential requirements for firms undertaking Investment Management or Advisory business in the QFC and compares the position with that currently applied in the DIFC.