CmaBoardReleases
Title: Press Release: Invitation to Participate in the Opinion Poll of the Proposed Amendments to the Executive Bylaws Regarding Financing Requirements
Kuwait, April 19, 2022 - Within the framework of the CMA's strategic goal of developing the legislative and regulatory structure for capital markets, and to complement its initiatives in this field in accordance with international best practice, and the recommendations issued by the International Organization of Securities Commissions (IOSCO), and taking into account the stakeholders' visions, the CMA is in the process of introducing a legislative set of additions and amendments to the Executive Bylaws Modules of Law No. 7 of 2010 Regarding the Establishment of the Capital Markets Authority and Regulating Securities Activities and their amendments related to the requirements of Sustainable Finance. This legislative set comes in light of the trend of global financial markets towards transforming to more sustainable economies and financial markets through the application of sustainable finance represented by the insertion of (ESG - Environmental, Social, and Governance) in economic and financial activities. This trend was accompanied by the regulatory authorities on global financial markets to provide the necessary legislative frameworks for regulating sustainable finance. Such interest comes in line with the trends of investors who aim to achieve financial returns with a positive contribution to achieving environmental, social and governance sustainability on the one hand, and on the other hand, to the efforts of governments of the world, through their development plans, to achieve the seventeen sustainable development goals of the United Nations Development Program (Sustainable Development Goals), which is a global call to take action to end poverty, protect the planet and ensure that all people enjoy peace and prosperity by 2030.
It should be noted in this regard that the IOSCO - Growth and Emerging Markets Committee issued a report in June 2019 on (Sustainable Finance in Emerging Markets and the Role of Securities Regulators), the report included ten recommendations for members of the Growth and Emerging Markets Committee to consider when issuing any rules related to sustainable financial instruments and disclosure requirements related to sustainability risks. Accordingly, the CMA in coordination with the IOSCO, has taken a series of steps related to CMA’s position regarding the ten recommendations referred to above, leading to the preparation of a set of additions and amendments to the Executive Bylaws Modules of Law No. 7 of 2010, and this legislative set includes Six Modules of the Executive Bylaws whose objective is to update the legislative system of the CMA to keep pace with global applications related to sustainable finance in its various aspects, through which the ten recommendations are implemented.
The efforts of the CMA in defining the requirements for amending the Modules of the Executive Bylaws came as a result of the information and conclusions that were reached through research and theoretical analysis regarding the evaluation of information related to sustainable development and sustainable financing, and the comparative study of regulatory frameworks and efforts related to sustainable financing by similar regulatory authorities, in addition to the field studies, which is the study and evaluation of the results of opinion polls that were directed to various potential stakeholders and similar supervisory authorities, the implementation of the recommendations of IOSCO has been taken into account, also the importance of consistency of the new requirements with the rules stipulated in the Modules of the relevant Executive Bylaws, and the possibility of their application in a smooth and practical manner that takes into account the realistic application and progression of these requirements, while ensuring to include all IOSCO recommendations at the same time as much as possible.
In line with the foregoing, the proposed additions and amendments to the Executive Bylaws of Law No. 7 of 2010 referred to above, which aim to meet the basic requirements for implementing sustainable financing in the State of Kuwait in its various aspects, include the following Modules:
Module |
Description |
Module One (Glossary) |
Addition of some definitions related to sustainable finance.
|
Module Six (Policies & Procedures of Licensed Persons) |
Addition of a text stipulating that risk management systems can include the sustainability elements of environmental, social and governance aspects.
|
Module Twelve (Listing Rules) |
Addition of regulations to the sustainability report for listed companies, and for the Securities Exchange to prepare a comprehensive guide for these reports, with the possibility of issuing instructions by the CMA regarding the mandatory application of this disclosure to one of the spilt markets.
|
Module Thirteen (Collective Investment Schemes) |
Addition of the “sustainable fund” within the types of funds, and adding a new facility that includes controls for investing in sustainable funds.
|
And Fifteen (Corporate Governance) |
Addition of texts related to the possibility of including sustainability considerations of environmental, social and governance issues in corporate operations, and developing a plan to include these factors in the overall strategy and main action plans, as well as the Board of Directors' awareness of sustainability risks.
|
In the CMA’s pursuit to achieve transparency, and its belief in the principle of participation and the importance of benefiting from the experiences and capabilities of the persons and entities subject to its supervision, and taking into account their aspirations and visions in the resolutions or instructions it issues to regulate their fields of work in securities activities, which would achieve common interests and support the implementation of these decisions and instructions after issuing it and implementing its requirements in an accurate manner, contributing to CMA’s success in achieving its objectives and thus reaching the public interest.
Accordingly, the Capital Markets Authority is pleased to announce that a survey was conducted for the opinion of the entities subject to its supervision related to the resolution to be issued regarding the amendments to the Executive Bylaws of Law No. 7 of 2010 Regarding the Establishment of the Capital Markets Authority and Regulating Securities Activities and their amendments , with regard to the aforementioned Modules, bearing in mind that the period of the poll will be for 15 business days from the date of this announcement.
In conclusion, the CMA invites all relevant parties to participate in the survey, in an effort to develop integrated perceptions about it in preparation for its adoption in a manner that achieves the interests of the Kuwaiti capital market in particular, and the Kuwaiti economy in general, and to enable the CMA to achieve its goals as a result of the expected amendments, especially keeping pace with international standards, and opening investment horizons to a new approach to sustainable finance on a large scale.
Amendments to the Executive Bylaws Regarding the Requirements of Sustainable Financing
Ends-
Notes to Editors:
The Capital Markets Authority was established pursuant to Law No. 7/2010, approved by the Kuwaiti Parliament in February 2010. Pursuant to the Law, the CMA shall regulate and supervise the securities activities, achieve transparency and fairness, observe listed companies’ execution of Corporate Governance regulations, and protect investors from unfair practices which violate the CMA's Law.
Furthermore, the Law's provisions stipulate the supervision of mergers, acquisitions, and disclosure operations. The CMA also aims to provide awareness programs related to securities activities.
For further information, please contact:
Public Relations & Media Office
Tel: 22903062
Fax: 22903505
Email: pr-media@cma.gov.kw