This is the fourth part of Capital Markets Bill approved by Kuwait National Assembly in its first reading on Jan 20.
— Editor

Article 95
The authority has the right to refuse the pamphlet of the subscription in any of the following cases:
1. If the pamphlet is not in accordance with the verdict of this law and the executive bylaw.
2. If the pamphlet is submitted without an attached statement that the approved fees are paid.
3. If the authority that issues the monetary papers fails to forward the required financial data according to this law or any system or bylaw issued in line with it.
4. If the pamphlet includes an inaccurate or incomplete statement that may affect the decision of the subscriber.

Article 96
The publication of subscription in shares of a company during establishment should include declaration of the following data:
1. Objective of the company and duration.
2. The basic and paid capital of the company.
3. Specifications, characteristics and conditions of the shares declared.
4. Names of founders and scope of their contributions, as well as quantity of shares, if available.
5. Plan of the company concerning utilization of money realized through subscription and projections concerning outcome of monetary utilization.
6. Places of obtaining published subscription approved by the authority.
7. Any other data specified by the byelaw.
Subscription publications should include other data apart from the aforementioned ones, as stated below:
1. Formal activities of the company.
2. Names of board members, managing directors and their experiences.
3. Names of shareholders whose shares are above 5 percent from the company’s shares and percentage of their shares.
4. Summary of lists and financial statements approved by auditors within the last three years or previous period within which the company has been existing, whichever is fewer between the two, in line with the bye law and form of the authority.

Article 97
A listed company in the bourse shall declare financial statements in line with regulations of the bourse, which the authority approves.

Article 98
The authority shall mandate the bourse to ensure that listed companies quickly declare major changes that occur to any of them.

Article 99
The public is permitted, based on payment of an amount specified by the authority, to access or obtain copies of periodic publications, reports, information and statements kept in the bourse after its declaration or announcement.
Section 10
Declaration of Interests

Article 100
A beneficiary is regarded as anybody who owns 5 percent or more interest in the capital of a listed company in the bourse. This may be direct, indirect or alliance with others.
The byelaw shall specify direct or indirect beneficiaries, as well as specify a beneficiary who works as an individual or a group. It shall also specify other interests that should be declared, in addition to procedures concerning mode and timing of declaration.

Article 101
A beneficiary, within a maximum of five days, should ensure actualization of interest by sending an approved statement signed in the bourse where he transacts stock to the concerned authority, while the statement should include information specified by the regulation.
Article 102
He should inform the bourse in which he transacts stock about any changes concerning the interest within five days of the change. This information is mandatory when the change leads reduction of interest by 5 percent of the capital.
Article 103
Every director of a listed shareholding company should declare to the authority, bourse and company his interest in the stock of the company where he works, its subsidiary or partner regardless of percentage of the interest from the company’s capital. This mandate is binding on interests of his first-degree family members or spouse.
Article 104
If the previous article applies to a director, he should clarify the following:
1. Any changes on interests according to the previous article should be disclosed by directors.
2. The practice of a prerogative by a company or any related company with any underwriting of the company or a related company.
3. The practice of a privilege granted by another company to underwrite in stocks of the company.
Article 105
Any registered shareholding company has to have a special record for the declarations of the directors that contains all the data and information stated by the authority. Only concerned personnel have the right to access this record during official working hours.
Article 106
The stock market that has a registered banknote has to announce the information received regarding declarations of interests as soon as they are received according to the executive regulations.
Article 107
The one who is responsible for declarations will be held responsible for any damage done to the authority, the stock market or others in case of failure to declare the interests according to the regulations of the executive list of rules.
Section 11
Disciplinary Actions
Clause 1: Specialties and Procedures
Article 108
A court established by the Court of Cassation is called the ‘Stock Market Court. A decision has to be issued by the Minister of Justice with the approval of the Higher Council of Law to determine its premises. This court consists of the following:
1. Disciplinary sectors that are concerned with disciplinary lawsuits related to criminal actions which are mentioned in this law. The disciplinary sector includes three judges and one of them should at least be a consultant. The Misdemeanor Court must have at least one first class judge. These sectors follow certain rules and regulations in processing criminal actions that are reported in criminal action law, which does not have a special statement in this law.
2. The non-disciplinary sectors are specialized with the non-criminal actions and are related to commercial, civil or administrative issues, and are being implemented according to the regulations of law and the organizational lists that are concerned with stock market. It is also concerned with the disputes of subjective implementation of issued judgments. These sectors are formed of three judges. At least, one of them should be a consultant.
3. One judge or more is seconded to the Court of Cassation to judge temporarily, without violating the original right, to handle issues that are restricted with due dates, which are the cases that this court is responsible for. This court is handling the implementation of temporary problems, in addition to issuing orders on memorandums and temporary orders, as well as performance-related orders.
The commercial and civil procedures law and its complementary laws are valid for the non-criminal pleadings persecuted according to the rules of this law, which does not make a mention in a separate statement.

Article 109
The legal documents and attendance orders are issued by the court to the suspects by specialized commissioners from the stock market authority. This is in line with the stated rules in Chapter 2 part 1 of criminal actions law. It is possible to announce it in the work place by delivering a copy to the work place administration. It is also possible to give these documents to other than the suspect through fax or email. The executive list of regulations organizes the means of announcements by the different means.

Article 110
Apart from the regulations related to announcements of legal documents that are mentioned in civil and commercial procedures law, it is allowed to declare legal documents related to civil, commercial and administrative disputes that were mentioned in this law by fax or email.
The Minister of Justice - in coordination with the Ministry of Communications and the Public Authority for Stock Market - issues a decision with the conditions and criteria specified to organize the procedures of announcements and the means by which these they state the forms of legal notes sent to suspects, the means of payment of legal expenses.

Article 111
The following should be considered with exceptions of articles number 49, 59, 91 of civil and commercial legal procedures law:
1. Based on the defendant’s demand, the judgment should be considered as if it does not exist if the defendant was not asked to attend the court within 30 days from the date of the issuance of the declaration.
2. If neither the plaintiff nor the defendant attends the first court session or the following session, the court will issue its judgment, unless it cancels it after confirming the reliability and accuracy of the announcement. The court also can decide to drop the case if both parts attend and agree to drop it.
But, if the plaintiff or the defendant does not attend the session the second time, the Court must consider the case nonexistent instead of only dropping it. In case the absent party arrives for the Court session before it ends, the cancellation is revoked. The Court will judge the issue as if the case does not exist if both parts do not attend the sessions after its recommencement. This will also be done if either of the parties does not inform the other about the recommencement of the case within 30 days of its cancellation. The period of cancellation is calculated as 30 days from the date cancellation date, if the cancellation is not repeated or continuing. This period is not considered unless the announcement is received by the opponent before the expiration of the validity.
3. The case can be stopped according to an through an agreement between the opponents to stop processing the case for not more than two months from the date of approval be the Court for this agreement. The stoppage does not affect any appointment taken by the law to determine certain procedures.
If neither of the parties announces the resumption of processing the case within 15 days after the limited time, it is considered that both parties have dropped the case.

Article 112
The Court of Appeal forms a penalty and a non-penalty division or more, which specialize in reviewing the appeals of the decisions issued by the Stock Market Court. Their judgments are final and cannot be appealed for by any means.
The appeal division at the Court of Appeal and the Court of Cassation continue to will continue to review the submitted appeals in order to issue a final decision for them.

Article 113
The Chief Justice of the concerned court is responsible for setting a session to review appeals that should be documented in his petition whenever it is presented. This is considered as an announcement for the appealer. The Publication Administration is responsible for announcing the petition to all the opponents by fax through the Stock Market Authority.

Article 114
A special agency called the Stock Market Agency is created, and it is responsible for investigating and handling criminal actions that are undertaken by the Stock Market Court in addition to the appeals of its decisions.

Article 115
The Stock Market Authority as well as the administration of the stock market have to implement the orders of the investigation authorities and the court. They must also cooperate with the authorities and the court to look for evidence related to crimes that resulted from the implementation of this law.

Article 116
The non-penalty division at the court of Cassation automatically refers cases that should be handled by the Stock Market Court in accordance with rules of this law. In case one of the parties is absent, the Publication Administration announces the referral. He will also have to be on time in front of the divisions that he was referred to. The rules of the previous paragraph are not valid for cases with partial court decisions or cases that were postponed. The penalty courts continue to handle cases that they are already handling on the date of implementation of this law.
Clause 2: Crimes and Penalties

Article 117
Without violating the statements in this law or any tougher penalty that is stated by another law, according to this law, the penalties for vicious deeds will be stated in the following articles.

Article 118
Anybody who exploits internal information through purchase or sale of banknotes, or whoever reveals or discusses internal information with outsiders shall be liable to a maximum of five years imprisonment or fine not less than the value of the benefit, avoided loss or KD 10,000 or whichever is higher. The fine should not be more than thrice the value of benefit or avoided loss or KD 100,000 or whichever is higher. Anybody dealing in the stocks is regarded as neutral in keeping internal information, while he can only make use of such information during buying or selling if it is established that he does not have the information prior to the transaction.

Article 119
Anybody who is subject to this law and reveals secrets related to his duty, job or position, shall be liable to a maximum of one year imprisonment and a minimum of KD 3,000 or maximum of KD 10,000 fine, or either of the two penalties. If it is established that he gets certain personal benefit or interest, as well as reward for himself or somebody else by revealing the secret or information, shall be liable to a maximum of three years imprisonment and a minimum of KD 10,000 or maximum of KD 100,000 fine, or either of the penalties.

Article 120
Anybody who ignores, hampers, or hides major information that should serve as guidelines, be disclosed to the authority and bourse concerning sale or purchase of stock, as well as recommendations for sale or purchase of stock, shall be liable to a minimum of KD 10,000 or maximum of KD 100,000 fine.

Article 121
Anybody who violates the provisions of Section 10, concerning the disclosure of interests shall be liable to a minimum of KD 10,000 or maximum of KD 100,000 fine.

Article 122
Anybody who:
1. takes any action capable of making fake impression or mislead people concerning transaction of stock or stock exchange market through:
a- entry into a deal in a manner that does not really change the stock ownership
b- involvement in buying and selling of stock although aware of the likely volume, price and duration of the transaction, which a particular person has released or will release with his background knowledge
2. whoever enters into a stock deal or more to:
a- increase price of the stock for the same source with the intention of urging others to buy
b- decrease price of the stock for the same source with the intention of urging others to buy
c- create real or imaginary transaction with the intention of urging others to buy or sell, shall be liable to a maximum of five years imprisonment and a minimum of KD 10,000 or maximum of KD 100,000 fine, or either of the two penalties.

Article 123
Anybody who violates provision of Section 7 of this law as regards possession or protection of minority rights shall be liable to a minimum of KD 5,000 or maximum of KD 100,000 fine, or 20 percent value of violated shares or the higher penalty among the two.

Article 124
Anybody found to have hidden vested interests for which he encourages or recommends purchase or sale of certain stock, shall be liable to a maximum of five years imprisonment and minimum of KD 5,000 or maximum of KD 50,000 fine, or either of the penalties. Hidden interest means hidden commission, material return, grant or gift from the source, broker, dealer, and investment consultant or subscription agent of the stock.

Article 125
Anybody who makes false claims that the authority has taken certain procedures or decisions, shall be liable to payment of a minimum of KD 5,000 or maximum of KD 50,000 fine.

Article 126
He shall be liable to payment of a minimum of KD 5,000 or maximum of KD 50, 000 fine if a person:
1. practices a profession or activity without proper license from the authority in line with provisions of law
2. makes a general bid or other transaction contrary to provisions of this law or the bye law
3. deliberate failure or delay in presenting necessary periodic report or document to the authority
It is also possible to suspend him from involvement in transactions he did without license, or forbid him from any transaction or deal that requires legal record.

Article 127
He shall be liable to payment of a minimum of KD 5,000 or maximum of KD 50,000 fine, if a person perverts investigation or monitoring activities of the authority or its employees. The following actions could hinder activities of the authority:
1. Impossibility of the authority staff to access necessary data or information
2. Failure to adhere to final decision of the authority’s disciplinary panel

Article 128
In all circumstances, a violator shall be liable to refund the value of financial benefit or avoided loss due to contravention of provisions of this law, apart from the basic penalty.

Article 129
The court can issue a ruling to partially or permanently suspend anybody from board membership or executive director position in a company, or bar from performing his profession or related activities, whose guilt is established concerning any specified crimes in this law.

To be continued tomorrow