Initial Public Offering - Kuwait
As per Law Number 7 of 2010, Regarding the Establishment of the Capital Markets Authority and Regulating Securities Activities, Security is defined as, “Any instrument - in any legal form - that evidences ownership of a share in a financial transaction and that is negotiable pursuant to a license from the Authority, such as:
- Shares issued or proposed to be issued in the capital of a company
- Any instrument that creates or acknowledges a debt issued or to be issued by a company
- Loans; bonds; Sukuk; and other instruments that can be converted to shares in the capital of a company
- All public debt instruments that are tradable and issued by the various government entities or public institutions and authorities
- Any right, option, or derivative relating to Securities
- Units in a collective investment Scheme
- Any paper or instrument considered by the Authority as a Security for the purposes of implementing this Law and the Bylaws”
Kuwait established Capital Market Authority in February 2010 as a regulatory body of the various transactions that takes place in the market. The CMA is in charge of various activities such as
- Regulating Securities activities
- Growing capital markets and diversifying by introduction of investment instruments in accordance with international practice
- Ensuring compliance in regards to the established rules and regulations
In 2015, the body enacted a set of laws in relation to the market place conduct. This is the law that governs the regulations, procedures, sale, and offer in relation to the aforementioned securities, in Kuwait.
The law was enacted in 2015 as Decree Number 72 by the Kuwaiti Parliament. Kuwait CMA Laws is considered to be one of the most complex and diverse set of regulations to be adopted by Kuwait in its recent years.
For a company to be listed with the Kuwaiti stock Exchange, there are various regulations to be followed. Proceeding the listing application submission, a company has to provide all documents and information required along with the payment of fees for the Exchange and Authority. Module 12 of the Bylaws deal exclusively with the requirements and rules of listing.
Further, it is necessary for the issuer to obtain a license to conduct activities in the market. Article 63, Chapter 5 of the CMA handbook states that a person cannot operate without a license in the market for activities such as:
- Securities Broker,
- Investment Advisor,
- Investment Controller,
- Investment Portfolio Manager,
- Collective Investment Scheme Manager,
- Any person who conducts or participates in any other activity that is deemed by the Authority to be an activity in Securities to be regulated in accordance with the purposes of the Law,
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