CMA LAW: CMA Circular No. (16) of 2026 to all Persons Licensed to Practice the Activity of Qualified Securities Broker registered with an Exchange Regarding the Regulation of Discounts on Brokerage Commission

Based on the role of the Capital Markets Authority (CMA) in regulating securities activity in accordance with fairness, transparency, and competitiveness, and according to Article (1-6) of Module Eight (Conduct of Business) of the Executive Bylaws of Law No. 7 of 2010 and amendments thereto, amended pursuant to Resolution No. (85) of 2026, which stipulates:

“Without prejudice to the rights of a Licensed Person to collect commissions, charges and fees required for providing services as mentioned in the agreement entered with the Client, the Licensed Person, while practicing an activity involving Securities, shall not pay any fees or commissions, provide monetary or non-monetary benefits or gifts, whether directly or indirectly, to his clients. Furthermore, it shall not receive any of the mentioned except in the following cases:

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3. Discounts on brokerage commissions determined according to the Authority’s instructions, provided that they are granted in accordance with specific policies of the Licensed Persons.
The prohibition set out herein shall apply to employees of the Licensed Person.”

The CMA draws the attention of all licensed persons to the permissibility of offering discounts on brokerage commission in a maximum of 25% of the commission value according to their approved policies and procedures, starting from January 1, 2027. The provision of these discounts remains discretionary option for the licensed person, without any obligation to grant them. Moreover, this mechanism does not apply to discounts granted to market maker, provided that the market maker remains entitled to the prescribed discounts in accordance with Boursa Kuwait Rulebook.

In this regard, the licensed persons shall set clear and organized policies and procedures regarding the mechanism of granting discounts on commissions and their eligibility criteria, to ensure they are clearly disclosed to clients and fairly applied. Discounts programs may be designed based on objective criteria, such as trading segments, activity size, or any other related criteria, so as to provide the necessary flexibility to licensed persons, without prejudice to the provisions and regulations prescribed in the Article referred to herein.

Emad Ahmed Tifouni
Issued on: 03/09/2026.
 

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