Title: Invitation to Participate in the Opinion Poll of the Draft Review and Amendment of the Provisions of Module Eleven of the Executive Bylaws of Law No. 7 of 2010.
Date Publish 04 April 2021
Within the framework of the continuous update of the legislative system of the Capital Markets Authority (CMA) and the ongoing development of the rules and legislations aiming to match the latest applications that are implemented worldwide, and as part of the efforts of moving the Kuwaiti market to the ranks of the advanced markets, and the aim of achieving independency of regulatory entities and avoiding interference between their legislations, in order to facilitate procedures for all stakeholders, and after application and practice, the CMA has conducted a comprehensive review to Module Eleven of the Executive Bylaws of Law No. 7 of 2010. The revision process of the provisions of the articles of the mentioned Module in general included both the legislative legal and the technical accounting aspects to be sufficient in implementation and as reference for their users.
The draft review project of Module Eleven included adding new suggested articles for regulating the book building mechanism in the securities prospectus and the priority rights in subscription to be in line with the latest legislations and regulating bylaws at the present time.
Moreover, within the framework of keeping pace with the international legislations and recent applications of the rules regulating the financial markets, and as part of the draft, the CMA has prepared the regulations of the green debt instruments (Sukuk and Bonds) which are financing instruments for the green projects “eco-friendly” that contribute to achieve the objectives of the sustainable development, especially since Kuwait has joined several international and regional environment agreements and protocols, the most prominent of which is Paris agreement regarding the climate change. In addition, the increased issuance of the green debt instruments internationally and regionally resulted in the need for a regulating framework for these issuances in the local investment system that will contribute in the transition to a more sustainable economy.
In the process of completing the series of CMA’s legislative system, new regulations were established regarding the share split in order to add a positive impact for the dealers in the exchange in terms of trust and interest, contribute to move the market to the emerging market system, and attract the professional competencies to the financial sector to enhance its efficiency and performance. Moreover, the share split is one of the mechanisms applied in the advanced and emerging markets. This mechanism allows the companies to split their shares which will result in increasing their number and reducing their par value which in turn will reduce the par value of the share. The most important reason for the shares split is the increased liquidity of trading on the companies’ shares which result in offering the share in a reduced price and in a larger number.
Furthermore, the revision process of Module Eleven of the Executive Bylaws of Law No. 7 of 2010 included amending most of its chapters and adding a new chapter (chapter sixteen) to regulate the share split.
Thus, presenting the report of (Reviewing and Amending the Provisions of Module Eleven of the Executive Bylaws of Law No. 7 of 2010) is divided into seven sections as follows:
- First: General amendment to Module Eleven.
- Second: Amendments to the provisions of increasing the capital by converting a debt to shares (chapter fifteen).
- Third: Amendments to the provisions of reducing the capital to amortize the accumulated losses (chapter fifteen).
- Fourth: Amendments by adding new articles for regulating (the book building mechanism) and (the priority rights).
- Fifth: Amendments by adding new articles for regulating the green bonds and sukuk.
- Sixth: Adding a new chapter (chapter sixteen) to Module Eleven of the Executive Bylaws for regulating the share split.
- Seventh: Technical terms in Module Eleven require amending Module One (Glossary).
The CMA is pleased to announce conducting an opinion poll for the amendments to be made on Module Eleven of the Executive Bylaws of Law No. 7 of 2010 believing in the principle of participation and the importance of benefiting from the experiences and abilities of the relevant persons and entities from the dealers and the persons involved in the financial market considering their legitimate aspirations and visions regarding CMA’s issued resolutions or regulations that shall regulate their work in securities activities.
Therefore, the relevant parties may participate in the opinion poll from 4/4/2021 to 3/5/2021 by filling the application below and sending it to the following email address:
Copy of the Official Document
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