Defining Market Boundaries: Qatar Codifies Financial Market Conduct

Introduction 

The Qatar Financial Markets Authority ("QFMA") has issued, for the first time, a standalone Code of Market Conduct pursuant to Board Decision No (1) of 2025, consisting of (29) articles. This new code signifies a transformative shift in Qatar’s regulatory landscape, transitioning  the governance of market conduct from broad provisions previously embedded in Law No. (8) Of 2012 of the Qatar Financial Markets Authority (the "Law") and the QFMA Regulation issued by Board Decision No. (1) of 2008 (the "Regulation"), to a more dedicated and systemically structured framework.

How the Code Enhances Market Governance and Institutional Oversight 

From an international perspective

The Code aligns Qatar’s market regulation more closely to global standards, such as those set by International Organization of Securities Commissions (“IOSCO”) and the European Securities and Markets Authority (“ESMA”) and supports its commitment to strengthen its financial regulatory framework in line with the objectives of Qatar National Vision 2030. 

For market participants

By setting out clear rules on acceptable and prohibited conduct, the Code provides greater certainty to market participants. It also fosters a more proactive compliance culture and reduces ambiguity in interpreting market practices.

Within the QFMA

The Code enhances the Authority’s supervisory framework by providing a clearer foundation for identifying and evaluating market misconduct. It also supports greater consistency in regulatory interpretation and enforcement and strengthens internal processes such as investigations and disciplinary measures.

Prior to the Code’s introduction, the QFMA’s Investigation Committee and Disciplinary Committee operated based on the broader provisions of the Law and Regulation. The introduction of the Code now provides these committees with a dedicated reference point for interpreting and adjudicating market violations, thereby enhancing the structure, transparency, and predictability of their decision-making processes. 

Key Takeaways from the Code

• The Code marks significant advancements by introducing, for the first time, specific definitions for key terms that were previously undefined in detail. Concepts such as market manipulation, misleading conduct, inside information, and insider are now explicitly defined in the Code’s opening provisions. Notably, the definition of “inside information” has been expanded to include non-public information related to an issuer or security that may affect its price or trading volume once disclosed, explicitly including pending trade orders. This enhancement is aimed at closing any loopholes that could allow the misuse of advance information, such as in cases of front-running scenarios.
  
  Moreover, the Code broadens the definition of “Security” to extend regulatory coverage to modern instruments like digital financial assets and their equivalents, provided they are licensed by the QFMA. This expanded scope ensures that cryptocurrencies and other digital assets fall under Qatar’s market conduct rules, reflecting QFMA’s effort to staying abreast of financial innovation in line with international developments.
  
  On the other hand, the term “Accepted Market Practice” previously referenced in the Regulation under article (87), is not defined in the Code. Nonetheless, several international frameworks, such as the EU’s Market Abuse Regulation, do in fact designate a specific section within their framework to define Accepted Market Practices. 

• The Code expands the scope of market misconduct to include actions involving the use of technical tools, even if not explicitly listed. By referring broadly to “technical means,” the Code establishes a versatile legal foundation for addressing manipulative conduct carried out through emerging technologies, such as algorithmic trading, automated order injection, or other digital systems, allowing the QFMA to respond to technological developments without the need for constant legislative amendment.
• Financial service providers, the market, and the central depository are now mandated to implement internal policies and controls aligned with the QFMA’s approach to detect and prevent misconduct.
• The Code codifies a range of deceptive trading practices that were not clearly addressed before. Articles (7-9) of the Code enumerate specific examples of market manipulation and misinformation, giving teeth to the broad prohibitions contained in the Law, such as the general bans on “rumors” and “false information” under Article 40 of the law. By detailing these schemes, the QFMA is putting market participants on notice about what conduct is unlawful. Among the newly articulated manipulative practices are:
  • Wash trades and transactions that involve no real change in beneficial ownership (e.g. trading between accounts of the same person or colluding parties) to create a false appearance of trading volume.
  • The Code forbids order book manipulation (spoofing/layering) and placing buy/sell orders without intent to execute them, for example, mass submitting and then cancelling large volumes of orders to mislead others about true supply or demand.
  • The Code prohibits misleading promotion which involves rumour-based manipulation and spreading false or misleading information to influence a security’s price, for instance, promoting a stock to drive its price up (so one can sell at a profit), or spreading negative rumors to drive the price down (to buy cheaply). While Qatar’s old framework did prohibit giving false information about a security’s price or supply, the Code provides more concrete examples of this “pump-and-dump” style conduct, making enforcement more straightforward.
  • The Code targets collusion among investors to create artificial demand. For example, agreements among initial public offering (IPO) subscribers to buy additional shares as soon as trading begins, solely to inflate the price and then sell their allocated shares at a profit are now explicitly prohibited.
  • Article (8) also bans tactics like placing one or more large buy orders to support a security’s price while simultaneously selling into that strength, then cancelling the buy orders. Such “liquidity withdrawal” schemes were not identified in the Law.
  • Article (9) reaffirms that any person in possession of inside information (not just corporate insiders) is forbidden from directly or indirectly trading on it or disclosing it to others who might trade. While this principle existed broadly before, the Code’s language is more explicit, covering not only trading for one’s own account but also recommending or inducing someone else to trade on insider information. 

• The Code expands its scope to cover new forms of manipulation and advanced market abuse tactics, including, algorithmic manipulation, media-driven deception, misleading investment recommendations, and failure to disclose conflicts of interest. 
• Regarding False or Misleading Information, the Code defines “Publication” to include oral transmission, extending beyond the traditional “printed or electronic” categories in the regulation. Also, it presumes liability for individuals who knew or should have known that the information was false or misleading, imposing a duty of care to verify accuracy before publication. Unverified statements on social media (e.g., X Platform, previously known as Twitter), are explicitly considered punishable violations.
• The Code introduces specific exemptions or “safe harbours”, clarifying cases that shall not be deemed manipulative or misleading, provided they are carried out in accordance with applicable laws. The Code explicitly states that certain legitimate market activities do not constitute market abuse even if they impact prices or volumes. These include: company share buybacks (treasury shares) conducted under legal frameworks; price stabilization transactions following public offerings carried out under the relevant rules; trades executed by licensed market makers in accordance with regulatory requirements; trades by authorized liquidity providers conducted under applicable guidelines; and high-frequency or large-volume trades carried out within a short period, provided the intent is not to affect market price or volume (i.e., normal active trading is not deemed manipulative in itself). 

Forward View: Insights to Support the Code’s Effective Implementation

In its 2023 yearly report, the QFMA highlighted under the Surveillance Over Trading section of the report that it is planning to issue a Code of Market Rules - which has now entered into force - and to prepare the internal policies and procedures for the Surveillance Department. 

Building on this significant milestone, and as part of our analysis of international best practices, we examined how regulatory authorities typically work to strengthen the implementation of such frameworks. The following highlights key approaches commonly adopted by regulators to support the effective implementation of similar provisions:  

Advancing Electronic Surveillance Capabilities

Given the strategic importance of electronic surveillance capabilities in ensuring fair market practices, many leading market regulators have progressively enhanced their electronic surveillance systems. This includes, in particular, the adoption of advanced technologies - such as adopting artificial intelligence systems and machine learning – which could enable real-time monitoring of trading patterns and early detection of anomalies.  These technologies are increasingly relied upon by leading and advanced global market regulators to ensure swift and accurate supervisory responses. Additionally, investing in capacity-building programs for supervisory and surveillance personnel, including training in forensic analysis and investigation techniques, would support the effective application of the new regulatory framework. The impact of robust regulations is significantly enhanced when supported with human oversight. 

Internal Use Guidelines for Surveillance Systems

As regulatory technologies continue to advance and particularly with the integration of AI and machine learning, establishing robust internal policies becomes essentials to mitigate legal and operational risk arising from over reliance on automated systems. in light of international best practices, jurisdictions that adopt tools such as the Millennium Surveillance System, must implement internal protocols that govern how these systems should be used by supervisory teams (e.g. the Disclosure and Governance Department). Such guidelines typically clarify how electronic systems complement, rather than replace, expert human judgment, reinforcing a balanced approach that maximizes the strengths of both.

The guidelines may also include protocols for:

• Classifying alerts by severity or priority level.
• Defining escalation pathways based on alert types.
• Logging and auditing decisions taken in response to alerts.
• Establishing clear intervention thresholds. Ensuring that alerts generated by surveillance system are subject to human analysis and contextual review prior to any regulatory enforcement. 
• Outlining referral criteria to the competent department, including evidentiary standards, such as contextual assessment that takes into consideration market conditions, the trading history of the individual or entity involved, and any relevant behavioural patterns. 

Enhancing Cross-Border Surveillance and Coordination

In today’s interconnected global markets, instances of market misconduct – particularly manipulation - may transcend national borders.  For example, manipulation can be carried out by foreign investors trading in securities listed on domestic exchanges or affecting dually listed instruments. International best practices reflect the value of establishing mechanisms for strengthening cooperation with foreign regulators, including the development of protocols for cross-border surveillance and data sharing, in line with IOSCO recommendations. These measures are particularly relevant where cross-border activity may influence local market integrity.

Periodic Review of Market Conduct Regulations

Based on international best practices, regulatory authorities adopt a structured approach to conducting periodic review of market conduct rules. Such reviews often conducted every few years, help support in identifying any gaps or emerging risks, enabling timely updates to the framework and reinforcing its responsiveness, particularly in light of new manipulation tactics, fraud schemes and the continues introduction of innovative products and technological advancements.

Strengthening Insider Trading Controls Through Governance Linkages

International practices suggest that insider trading controls are most effective when closely linked to broader corporate governance frameworks. In several jurisdictions, listed companies are required to maintain and regularly update insider lists, and trading blackout periods are clearly enforced. These measures help support in minimizing the risks related to the leakage or misuse of sensitive information. Furthermore, whistleblower protection mechanisms within financial institutions are recognized as key components in encouraging early reporting of misconduct and fostering a corporate culture that supports compliance. Such mechanisms have proven effective globally in strengthening defences against insider trading.

Enhancing the Administrative Sanctions Framework

International best practices such as the EU Market Abuse Regulation and the IOSCO Principles, emphasise the importance of proportionality, transparency, and deterrence within the administrative sanctions framework. In this context, it is recommended to adopt detailed schedules outlining specific violations and the corresponding sanctions—such as fines, trading suspensions, or licence revocations—to enhance legal clarity, consistency, and effective enforcement.

With reference to Article (40) of the Law, and in light of comparative benchmarks, it may be appropriate to assess the adequacy of the current maximum fine of QAR 10 million in cases involving serious violations—particularly those related to market manipulation by major market participants. In line with the approach under MAR, which links penalties to the amount of illicit gains or the actual impact on the market, a comprehensive benchmarking review could be considered. This may include raising the fine ceiling or linking penalties to a percentage of the unlawful profits or the market harm, thereby ensuring the proportionality of sanctions relative to the severity of the offence.

Article (49) of the Law provides for the possibility of settling cases through payment of 50% of the maximum fine. While this mechanism may facilitate the swift resolution of cases, best practices—such as those set out by IOSCO—stress the importance of governing the use of settlement mechanisms through clear and transparent internal guidelines, to avoid any perception of undue leniency. Such guidance helps determine when a settlement is appropriate and when legal proceedings should be pursued, thereby preserving the credibility and deterrent effect of the enforcement regime.

These insights reflect prevailing global practices and institutional learnings that have helped reinforce the credibility and effectiveness of capital market oversight in other jurisdictions. As Qatar continues its journey in strengthening the resilience and integrity of its financial markets, these approaches illustrate potential pathways for alignment with evolving international standards and for sustaining investor confidence.

Our team has extensive experience in public law, policy development, and regulatory reform, with a particular focus on supporting the restructuring of governmental entities and sectors to meet national strategic objectives. We have been engaged in drafting key legislative and regulatory instruments, including the Qatar Commercial Companies Law (2015), the Qatar Financial Markets Authority Listing and Offering Rules (2011), and the internal regulations and market rules of the Qatar Exchange. We have also advised on the legal and regulatory framework for one of Saudi Arabia’s flagship economic zones, including the drafting of a tailored set of bespoke laws to govern the area’s development and operations.

We have supported a wide range of regulatory and legal reform projects across multiple ministries, including the Ministry of Justice in Qatar, as well as the Ministry of Tourism, the Ministry of Industry and Mineral Resources, and the Ministry of Culture in the Kingdom of Saudi Arabia, among others.