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Title: The Capital Markets Authority Opinion Poll on the Draft Amendments for Some Provisions Regarding Collective Investment Schemes
Date Publish
21 August 2021
Kuwait City, August 21, 2021- based on the comprehensive vision of the Capital Markets Authority (CMA) to establish an effective control system that matches the latest international standards applied in various aspects related to securities activities, and its continuous keenness to make the necessary updates in light of the requirements of practical application, and its endeavor to reach a regulatory and a legislative infrastructure favorable for investment funds that possess the elements of: disclosure, transparency, governance, flexibility and simplified procedures, whether in managing and providing their services or in terms of investments in a manner that does not conflict with the supervisory role of the CMA, supports the asset management industry of investment companies, and raises the level of related services it presents to investors. It can actually establish an investment industry with a high degree of solidity and good financial solvency. This enhances the attraction of this type of investment, opens broad investment horizons for those wishing to invest in it, and ensures protecting the rights of investors. The CMA has prepared to implement proposed amendments to the provisions of Module Thirteen (Collective Investment Schemes) of the Executive Bylaws Law No. (7) of 2010 Regarding the Establishment of the Capital Markets Authority and Regulating Securities Activities, its Executive Bylaws, and their amendments to achieve the aforementioned objectives.
The proposed amendments to the aforementioned module are distributed according to three aspects presented in the following tables, the first of which relates to achieving "legal security and continuous governance", while the second deals with "keeping up with the best international practice.". The third part of the amendments covers the developed products related to investment funds
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Aspects of the proposed amendments related to achieving legal security and continuous governance
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1 |
Permissibility to specify a specific category of investors in the public offering
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2 |
Organizing the transformation of the fund's classification from public to private and vice versa
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3 |
Specifying and clarifying the tasks of service providers in detail
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4 |
Regulating conflict of interest for voting in assemblies
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5 |
Segregation between vacancy provisions and employment of: the administrative body and service providers
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6 |
Greater regulations for conflict of interest cases and measures to be taken to avoid their occurrence
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7 |
Permitting the suspension of applications if it is in the interest of the unit holders
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8 |
Regulating the provisions for ownership transfer in the local fund
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9 |
Excluding the index fund manager from the prohibition of the purchase of a security in order to issue a declaration to cover his subscription
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10 |
Organizing the discussion of items not included in the agenda of the Unitholders Association
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11 |
Organizing the requirements for authorization and power of attorney in the presence of the Unit Holders Association
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Aspects of the proposed amendments related to keeping pace with international best practice
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1 |
Approval to in kind participation in private funds
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2 |
Permitting the payment of the subscription value in installments to the closed private fund
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3 |
Reducing the minimum capital of the public fund to KWD 2 million
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4 |
Reducing the minimum participation amount for the fund manager to be KWD 100,000, and with the possibility of recovery if its net value exceeds the required minimum.
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5 |
Permitting the replacement of printed copies of the articles of association with electronic ones
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6 |
Permitting electronic subscription and redemption
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7 |
Adding a new exception for special funds such as unit holders associations, whether in person or electronic, and replacing them with written or electronic correspondence
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8 |
Segregate the fee schedule from the articles of association to reduce the burden of amending the articles of association if it is changed, while transferring the fee schedule to the annex of the articles of association
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9 |
Reducing regulatory requirements for promotional advertising controls
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10 |
Adding the CEO position as one of the persons who can be appointed as an administrative body
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11 |
Permitting holding the unit holders assembly electronically
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12 |
Organizing the process of buying and selling real estate in real estate funds to be based on the rate of valuations
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13 |
Permitting the specifying the subscription period by the applicant for incorporation, provided that it is within 6 months from the approval of the CMA
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14 |
Excluding index funds from the provisions of conflict of interest regarding the employment of the fund manager’s employees in the membership of the boards of directors of companies whose securities constitute part of the fund’s assets
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15 |
Increasing the possibility of delaying the valuation of assets in required cases
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16 |
Allowing liquidation funds to hold their annual assembly during the financial year instead of three months from the end of the financial year
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Areas of proposed amendments related to the developed products of investment funds
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1 |
Introducing investment controls in hedge funds
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2 |
Introducing investment controls in venture capital funds
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3 |
Permitting the establishment of other new types of funds, provided that they are private funds
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4 |
Raising the concentration rates of investment controls for securities funds and the acceptability of trading in financial derivative contracts and options
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5 |
Raising the percentage of concentration in debt instruments to control investment in debt instrument funds
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6 |
Increasing the maximum weighted average maturity of the fund's total investments to 180 days instead of 150 days for money market funds
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7 |
Opening the scope of investment in other types of funds (such as money market funds and securities funds in the real estate field) for real estate funds
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Finally, the Capital Markets Authority, as it believes in the importance of surveying the views of stake and vision holders, and those interested in securities activities in general, and people dealing in the market in particular, regarding its various directions related to these activities. It invites them to participate in the poll it is conducting regarding the aforementioned proposed amendments. It also welcomes their suggestions and opinions through the designated website, starting from Sunday August 22, 2021 until Thursday, September 09, 2021, in an effort to develop integrated visions about it in preparation for its adoption in a way that achieves the interests of the various related parties, and enables the CMA to achieve its goals as a result of the expected amendments, especially in terms of protecting investors, keeping up with international standards, and opening new investment horizons.
Poll Website:
https://www.cma.gov.kw/ar/web/cma/Surveybook13
Scan here to enter the website:
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
Disclaimer: The information provided on this page is for reference purposes only, visitors are encouraged to review and understand the information provided in the official scanned document attached in the link above (if available). The CMA endeavors to ensure that the information on this page is complete and accurate, but the CMA does not guarantee the quality, accuracy, or completeness of any content at any time. In the event the information on this page is different from the content in the official scanned document attached in the link (if available), the official scanned document attached shall take precedence.
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