QFC Regulatory Authority issues proposals on market risk and other miscellaneous amendments for conventional and Islamic banks

Doha, Qatar, Monday, 28 April 2025

The QFC Regulatory Authority (“Regulatory Authority”) today issued a Consultation Paper on proposals to update the market risk approach in, and make related miscellaneous amendments to, the Banking Business Prudential Rules 2014 (“BANK”) and the Islamic Banking Business Prudential Rules 2015 (“IBANK”).

The proposed amendments are set out in the draft BANK and IBANK (Market Risk and Miscellaneous) Amendments Rules 2025 (“draft Rules”) and include:

a     updating the market risk approach. The Regulatory Authority proposes to implement the Basel Committee on Banking Supervision’s simplified standardised approach as the default for
             banks in the QFC. This is suitable for banks with less complex trading portfolios and is a recalibrated version of the current approach set out in BANK and IBANK; and

b     introduction of limits on concentrations in foreign currencies. Under the proposed rules, a QFC bank’s:

             i     net open position in a foreign currency, other than the US dollar, must not be greater than 5% of the bank’s Tier 1 capital;

             ii    net open position in the US dollar must not be greater than 25% of the bank’s Tier 1 capital; and

            iii   total net open positions in surplus, or total net open positions in deficit, (whichever is higher), in all foreign currencies (including the US dollar) must not be greater than 30%
                      of the bank’s Tier 1 capital.

The Regulatory Authority is seeking to assess the impact of these proposals on authorised firms and will also be available to meet on a one-to-one basis with any firm wishing to discuss the consultation proposals.

You are invited to submit your comments by 5 June 2025.

Please click here to access the Consultation Paper and the draft Rules.