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Thursday , February 27 2020

Capital Markets Authority to introduce 2 features for foreign investors

KUWAIT CITY, Sept 21: According to Capital Markets Authority “CMA” announcement on June 18, 2019, and its future plans to expand the structures of “Omnibus Account” and “Same NIN Crossing” to foreign investors, the CMA in cooperation with Boursa Kuwait “BK” and Kuwait Clearing Company “KCC” has completed several procedures to implement what was stated in that announcement.

The implementation of these two features come in line with the MSCI’s announcement to reclassify Kuwait to its Emerging Markets index. MSCI announced on June 25, 2019 “that it will reclassify the MSCI Kuwait Index to Emerging Markets status, subject to omnibus account structures and same National Investor Number (NIN) cross trades being made available for international institutional investors before the end of November 2019”.

A day after this announcement, the CMA indicated that the work to satisfy these conditions is already progressing and expressed its confidence that the necessary arrangements will be put into effect before MSCI’s official deadline.

The CMA, BK and KCC consider the implementation of these features a priority, especially since these two mechanisms are available today for local licensed persons in accordance with the CMA regulations. The CMA has taken important steps to expand these features to foreign investors and has already made considerable progress in this regard to ensure finalizing the solution before the deadline of November 2019.

During July, the CMA in cooperation with BK and KCC, circulated consultation document to (155) contact from relevant international stakeholders who are assumed to have interest in using the “Omnibus Account” and the “Same NIN Crossing” in order to secure their feedback on the proposed changes.

The document presented the changes that will impact the CMA Bylaws, and KCC rules as a result of expanding these two features to foreign investors, and seek feedback on the mechanism of implementation to help achieve the desired goal.

On Sept 5, 2019, the CMA announced the results of this consultation, along with the approach that will be followed which will lead to some amendments on the CMA Bylaws, KCC rules, BK rules, and other associated changes in the processes of these entities.

The CMA confirms that the implementation of the proposed changes are on track, and will be put into effect before the deadline of November 2019, in preparation to be reviewed by MSCI which announced in June 2019 that it “will communicate its final decision by Dec 31, 2019”.

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