Issuance of Regulations
Capital Markets Authority (CMA) has issued new Executive Regulations of the law establishing the Capital Markets Authority. The new Executive Regulations were published in a special edition number (1261) of the Al Kuwait Al Yawm official gazette issued on 10/11/2015, coinciding with the enforcement of Law No. 22 of 2015 amending certain provisions of Law No. 7 of 2010 on the establishment of Capital Markets Authority and Regulation of the Securities Activity. The new Executive Regulations were issued in 16 volumes comprising 1665 articles.
Enforcement of Regulations
The Executive Regulations shall come into force commencing the date of issuance on 10/11/2015, thus all the rules and instructions issued by CMA in the past would be nullified after they have been reviewed and included in the new regulations. The new Regulations shall comprise all amendments and updates that CMA may issue in the future, thereby reference to these provisions shall be integrated into one source and become easy to handle with consistency established.
Transitional provisions for the application of Regulations
The CMA has taken into account the transitional periods required by the concerned persons targeted by the provisions of the Regulations either with respect to any new requirements or additional obligations that were not set forth in the previous instructions and resolutions. Regulations have granted an appropriate grace period extending to more than a year to meet these requirements and obligations. The CMA corporate governance rules shall apply as from 30 June 2016 as scheduled.
Resolution to issue Regulations
CMA has been keen to include several details – regarding resolutions that were nullified – in the resolution No. 72 of 2015, where the resolution included the following:-
- Appendix No. (1): resolutions and instructions of CMA and the CMA Board of Commissioners which have been nullified.
- Appendix No. (2): The Kuwait Stock Exchange resolutions that were nullified.
- Appendix No. (3): Concerning transitional provisions, which are 44 articles comprised spread in overall volumes of the Regulations, those provisions set up the roadmap with regard to the privatization of the stock exchange and requirements to upgrade the work of the clearing company. Those provisions clarify as well periods of regularization for companies licensed by CMA to meet the new requirements.
- Transitional provisions have stated to allow the activity of the market maker for a maximum period of one year from the issuance of the Executive Bylaws. Transitional provisions have obligated the stock exchange and clearing agency to fulfill all the necessary requirements for this activity within one year from the issuance of the Regulations.
The most important dates by which the Regulations shall become effective
The following are the earliest dates by which the requirements of the Regulations shall be applied:
- Clause 35 of appendix No. 3: Rules of competence and integrity shall apply immediately and directly on the persons who apply for registration or nomination for positions with due registration after the issuance of these bylaws i.e. on 09/11/2015
- Clause 40 of Volume 11: The provisions of articles (9-13), (9-14), and (9-15) shall apply to pledge contracts concluded after the issuance of regulations i.e. on 09/11/2015
- Clause 39 of Volume 9: Mergers and acquisitions: Periods stipulated in Article (3-6) are calculated for the buying and selling rate allowed for the controller of the listed company effective 01/01/2016
- Clause 43 of Volume 13: Collective Investment Systems: The monthly information form contained in Appendix 5 of volume 12 shall come into force on 01/01/2016