Qatar Unveils New Share Pricing and Stabilization Rules to Modernize Capital Markets

New Regulations Bolster Qatar's Capital Markets

Doha, Qatar – The Qatar Financial Markets Authority (QFMA) has announced the implementation of new regulations governing share pricing and stabilization within its capital markets. These significant updates, formalized under QFMA Board Decision No. (8) of 2025 and published in the Official Gazette on December 31, 2025, aim to strengthen and modernize the nation's financial framework. The new 'Offering and Listing and Mergers and Acquisitions Rules 2025' replace the previous 'Offering and Listing of Securities on the Financial Markets Rulebook issued in 2020'.

Book-Building Mechanism Introduced for Offer Price Determination

A key component of the updated regulations is the formal recognition of book-building as a method for determining the offer price of shares. This mechanism allows the offer price to be set based on demand from institutional investors, aligning Qatar with established international market practices. Under the new rules, an issuer may utilize book-building to establish the offer price only with the explicit approval of the QFMA. The offering and listing advisor is responsible for determining the percentage of shares allocated to institutional investors for book-building, the price range, and the book-building period. Notably, the percentage allocated to institutional investors must be no less than 30% of the total amount of offered shares. This approach provides issuers with a transparent method to discover a fair offer price, grounded in real institutional investor appetite.

Greenshoe Option to Stabilize Share Prices Post-Listing

To address post-listing share price volatility, the QFMA has introduced the Greenshoe option, also known as an over-allotment option. This price stabilization mechanism allows underwriters to sell up to an additional 15% of the shares initially offered during an Initial Public Offering (IPO). The Greenshoe option provides a controlled and regulated tool to support the share price after listing, helping to smooth early trading and reduce fluctuations. The mechanism must be approved by the QFMA and managed by the offering and listing advisor or underwriter. Key requirements for the Greenshoe option include:

• The offer must be fully underwritten on a firm commitment basis.
• Over-allocation cannot exceed 15% of the offered shares.
• Over-allocation must occur during the subscription period and at the offer price.
• The option to buy additional shares concludes no later than 30 working days after trading commences.

This measure is expected to instill greater confidence among investors by providing a mechanism to manage potential market volatility.

Broader Goals: Attracting Investment and Enhancing Transparency

The introduction of these new rules is part of Qatar's broader strategy to stimulate the attraction of foreign investments and continuously review and develop the legislative structure regulating its capital market. The QFMA aims to enhance transparency, integrity, and investor protection, fostering a safe and sustainable investment environment. By adopting internationally recognized practices like book-building and Greenshoe options, Qatar seeks to elevate its capital markets to the rank of developed markets, supporting the growth and diversity of the national economy.