The Qatar Financial Centre Regulatory Authority is seeking public comments about its proposals to amend its rules for collective investment schemes to allow HNWIs to invest in real-estate funds.

The comment period closes on 25th July and the regulator envisages the new rules coming into force in September. They are known formally as the proposed Collective Investment Schemes (Property Funds and Miscellaneous) Amendments Rules 2016.

The QFC collective investment schemes rulebook took its current form in 2010 and contains COLL (its collective scheme rulebook) and the Private Placement Schemes Rules 2010 (abbreviated to PRIV). The COLL rules were designed to follow the well-established European Union Undertakings for Collective Investments in Transferable Securities (UCITS) rules.

The UCITS rules for collective investments, which are accessible to retail investors, have stood the test of time. UCITS schemes are designed as open-ended schemes that are marketable, highly liquid and subject to borrowing restrictions.

COLL also established a Qualified Investor Scheme (QIS) set of rules that deals with less liquid schemes and lifts some investment and borrowing restrictions. QIS schemes can only be marketed to individuals who answer to the description of 'qualified investors,' i.e. people with the experience, knowledge and financial resources to manage financial products of a riskier kind such as these.

At the moment, specialist schemes such as real-estate funds can be registered through COLL or PRIV but can only be marketed to qualified investors.

In 2010, when the regulator was formulating various retail rules, there was no market demand for retail real-estate funds. In recent times this has changed and financial firms have been lobbying the QFC Regulatory Authority to consider the feasibility of allowing retail investors access to real-estate funds and particularly listed Real Estate Investment Trusts/Company funds. In response, the regulator has looked at the regulatory issues and experiences of real-estate funds in some major financial markets, using the principles and rules of the International Organization of Securities Commissions (IOSCO) and the Hong Kong, United Kingdom and Dubai International Financial Centre regulatory frameworks have been used as benchmarks.

Real-estate funds are commonly available to retail investors in many jurisdictions and there are rules in place that, by and large, protect investors from sharp practice. Given the international development of retail real-estate funds, the regulator believes that now is an opportune time to 'liberalise.'