Title: Circular No. (06) of 2021 Regarding Financial Derivatives Transactions
Date Publish 20 April 2021
The Capital Markets Authority (CMA) draws the attention of all concerned persons, as part of its responsibility in ensuring the implementation of the provisions of Law No. (7) of 2010 Regarding the Establishment of the Capital Markets Authority and Regulating Securities Activities and its Executive Bylaws and their amendments, in light of the amendments introduced regarding the definition of a security and the CMA’s authority in controlling the brokerage activity in trading securities and its lack of competence to control brokerage activity in Forex Trading (FX), metals or commodities.
Accordingly, all companies whose objectives include brokerage in financial derivatives transactions, or those companies that market services related to financial derivatives trading, shall apply to adjust their situations in accordance with the provisions of Law No. (7) of 2010 Regarding the Establishment of the Capital Markets Authority and Regulating Securities activities and its Executive Bylaws and their amendments, pursuant to the letter and form attached to this Circular during the transitional period referred to in Resolution No. (49) of 2021 Regarding Financial Derivatives Transactions issued on April19, 2021 with the obligation to submit the letter and the form attached to this Circular no later than the end of the business day on Sunday July 18, 2021.
Companies whose headquarters are outside the State of Kuwait and which market their services related to financial derivatives trading with a valid license in accordance with the laws and regulations of those countries shall apply to the CMA in accordance with the aforementioned.
We would also like to point out that the CMA’s control is limited to derivatives issued or those that are traded in the State of Kuwait only, as all other trades are subject to the laws and regulations applicable in the country of origin of the foreign exchange. The CMA’s role is limited to monitoring the relationship between the client and the brokerage company, and the extent to which it applies the articles of the Executive Bylaws.
Based on the foregoing, failure to comply with what is stated in this Circular or instructions and decisions issued by the CMA in this regard, gives the CMA the right to hold the violator accountable in accordance with the provisions of Law No. 7 of 2010 and its Executive Bylaws and their amendments, and any other relevant law.
Attachment 1 and 2 - Financial Derivatives Transactions
Copy of the Official Document
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