CmaBoardReleases
Title: Chairman of the Board interview with Kuwait News Agency (KUNA) regarding the Establishment of Kuwait's Stock Exchange Company
Al-Falah: Establishing "Kuwait Stock Exchange Company" a stride for making Kuwait a financial hub
Kuwait City, 25 November 2013 – Saleh Al-Falah, President of the Board of Commissioners of the Capital Markets Authority, emphasized that the establishment of a Kuwaiti shareholding company, under the name "Kuwait Stock Exchange Company" with a declared total capital of KD 60 million, is a step forward on the path of transforming Kuwait into a regional financial center.
In an exclusive interview with Kuwait News Agency (KUNA), Al-Falah said the CMA had tackled all obstacles facing the establishment of the company, which would "replace Kuwait Stock Exchange." A specific and explicit road-map has been drawn up for actual execution and practical steps have begun with the license issuance.
The commissioners' board decision to establish the company has been taken as a basis for realizing the government strategies, he added.
Explaining, he said the Authority will own all the company stocks in a transitional period, during which the company will be prepared at the administrative and financial levels as well as making it eligible to obtain a permit to start operating the Stock Exchange. Following this phase, its shares will be floated for subscription by Kuwaiti citizens and KSE-listed companies, according to Law Number 7 (2010).
Shedding further light on mechanisms of forming the company, he said the Board had decided to step up a committee grouping its founders to take all relevant legal procedures, as a prelude to electing the first board that will manage the company in the interim period of time.
Abovementioned Law has assigned CMA with the task of launching the company, specifying its capital and floating its stocks equally at a rate of 50 percent for citizens' subscription and 50 percent to be auctioned to listed companies.
The Authority and the consultants, assigned for the task, had been involved in consultation and examination with the founding body. In addition to that respect, meetings had been held with the KSE Committee, the Ministry of Commerce and Kuwait Investment Authority (KIA). The Authority's decision was to specify the company's nature, its legal form, its Memorandum of Association, Articles of Association, and its capital.
Subsequently, the Authority laid out the executive plan, set the timetable and mechanisms for assets' transfer to render the company readiness to carry out its activity in the Stock Exchange, according to the Authority's Law and the international best practices in this regard. In accordance with Articles 32 and 33, of the CMA’s law, at its 18th meeting in 2013, the Board decided to launch the new company with a declared total capital of KD 60 million, subscribed capital of KD six million and paid-up capital of KD 1.5 million.
The Capital Markets Authority in the interim phase will totally take ownership of the company during the (first and transitional) board that would be acting upon recommendations, included in the advisors' reports.
This Board will be also taking important decisions related to setting-up the organizational structure of the company and the staff needed and setting up employment contract procedures with preference for employees currently serving in the KSE to operate the KSEC. It will also review and forward proposals on means for promoting the Stock Exchange, according to the international best standard practices.
Mr. Al-Falah added that the Board of Commissioners had decided, based on Article 70 of the Executive Bylaw of the Authority's Law, to form the establishment committee, of Mr. Abdullah Ahmad Al-Qabandi and Dr. Salah Abdullah Al-Othman, to take all the necessary legal procedures in order to establish the company according to the terms of the Ministry of Commerce and Industry, without prejudice to the provisions of the Authority Law No. 7 /2010 and the Corporates' Law No. 25 /2012 as amended.
Illustrating further, Al-Falah said the CMA, in its capacity as the sole owner of the company in the transitional phase, will appoint an interim eight-member board, including the Chairman and Vice Chairman, in accordance with the conditions mentioned in the CMA’s Law and its Executive Bylaw. This Board will manage the company in the transitional stage and prepare it for subscription for the Kuwaiti citizens and the KSE-listed companies.
Following the accomplishment of the establishment, Al Falah said that the company will assign its first interim board; and subsequently the company will increase its issued capital to the declared capital. He also explained that part of the capital which will include the financial and intellectual assets that the Authority by a following resolution will decide to remain in the Stock Exchange as articulated in the Article 156 of the CMA’s Law, as it is considered part of the company's capital, within the percentage of shares assigned to nationals which constitutes 50 percent of the total capital.
The Authority will subscribe in the company's capital using those assets, at a proportion equal to the shares allocated for the citizens -- half of the declared total capital -- estimated at 300 million shares of the stocks floated for public subscription.
These shares will be equally distributed to the Kuwaiti citizens, namely those whose names are registered in the Public Authority for Civil Information on the day of subscription, without the allotment to the fraction of shares, he said. Citizens will pay to the State according to procedures in the manner assigned by the CMA in later resolutions. The remaining stocks will be auctioned for the listed companies based on the provisions of Article (33) of the Authority's Law.