CmaBoardReleases
Title: The Capital Markets Authority Announces the end of the Period Granted to Brokerage Companies to Meet the Minimum Requirement of the Paid-up Capital
Kuwait, October 3 2016 – Pursuant to Resolution No. (9) of 2011 on the requirements of the licensed persons issued on 13/6/2011, the CMA has specified the requirements of the capital of brokerage companies, which came into force from the date of issuance. The provisions of the mentioned Resolution were asserted with Resolution No. (23) of 2013 of CMA Board of Commissioners on amending Resolution No. (9) of 2011 regarding the requirements of the licensed persons issued on 29/5/2013.
And as part of CMA’s endeavor to permit registered brokerage companies to meet the capital requirements, it issued Resolution No. (32) of 2013 on the requirements of the capital of licensed persons on 1/10/2013, which stipulates that such companies shall be provided a grace period of three calendar years from the date of its issuance to regularize their situations according to the minimum requirement of the paid-up capital required for licensing the activity and meeting all CMA’s requirements in this regard. According to the Resolution, the grace period was extended to over five years starting from 13/6/2011 pursuant to Resolution No. (9) of 2011 until 1/10/2016 pursuant to Resolution No. (32) of 2013. Such requirements were included in the new Executive Bylaws of CMA’s Law as a basic requirement for obtaining the license of practicing the activity of a Securities Broker Registered in an Exchange pursuant to CMA Board of Commissioners Resolution No. (72) of 2015 of on the issuance of the Executive Bylaws of Law No. (7) of 2010 on the Establishment of the Capital Markets Authority and Regulating Securities Activities, and its amendments.
After the end of the three years’ period granted by the CMA to registered brokerage companies to meet the condition of the minimum limit of the paid-up capital, which is mentioned in Appendix (1) of Module Five (Securities Activities and Registered Persons) of the Executive Bylaws, the CMA emphasizes its endeavor to perform its role regarding applying the laws and regulations related to securities activities, and it strives to achieve the principles of fairness and transparency. Therefore, the CMA would like to announce that CMA Board of Commissioners has resolved in its meeting No. (32) of 2016 held on 27/9/2016 to deal with the brokerage companies registered in the Exchange according to its compliance with the minimum requirement of the capital as follows:
First Category:
Companies that met the minimum requirement of the capital shall resume practicing its activities normally. These companies are:
- First Securities Brokerage Company
- K.I.C Financial Brokerage Company
- Middle East Financial Brokerage Company
- Watani Financial Brokerage Company
Second Category:
Companies that obtained the approval of the CMA to increase the capital or merge with another registered brokerage company, and has already started taking the required measures regarding this issue. The activity license of such comapnies shall be automatically canceled on 10/4/2017 in case the minimum requirement of the capital is not met by completing the required procedures by 9/4/2017. These companies are:
- KFH Financial Brokerage Company
- KFIC Financial Brokerage Company
- Al-Seef Brokerage Company
- Al-Sharq Financial Brokerage Company
- Al Tijari Brokerage Company
- EFG-Hermes IFA Brokerage Company
- Al-Waseet Financial Business Company
Third Category:
Companies which were not granted the CMA’s approval on the capital increase for meeting the minimum requirement of the capital. The activity of such companies shall be ceased for six months which ends on 9/4/2017, and the license of the company shall be automatically canceled in case it does not meet the minimum requirement of the capital by 10/4/2017. These companies are:
- Al-Arabi Brokerage Company
- Al-Robaeya Brokerage Company
- National Finance Brokerage Company
Thus, the CMA praises the companies which met the requirement within the specified period and practiced its role in participating in developing the financial market in Kuwait, met its clients’ expectations, and implemented and respected the Law. We would also like to emphasize the CMA’s pursuit towards developing the financial markets in Kuwait in accordance with the best international practice, and providing a regulatory system that supports a competitive and attractive investment environment.