Bid to raise Kuwaiti financial markets to ranks of developed countries

KUWAIT CITY, May 25: Within the aim of strengthening government efforts to support and develop the capital market system, the Minister of Commerce and Industry Muhammad Othman Al-Aiban issued ministerial resolution No. 75/2023 for the formation of a committee to study the proposals to remove obstacles to the development of the Kuwaiti capital market and to develop the necessary proposals, mechanisms and solutions in this regard, reports Al-Qabas daily. According to governmental sources, this decision would, in the event of implementation of its axes and special solutions, raise the Kuwaiti financial markets and stock exchange to the ranks of developed countries, as a continuation of the achievements made and a qualitative shift in the work of the Capital Markets and Stock Exchange Authority during the past few years. The sources explained that the Minister of Commerce and Industry hired a group of prominent specialists in governmental and private agencies of an economic nature to work in the committee. They include the CEO of the Kuwait Stock Exchange Company Muhammad Al-Osaimi who will chair the committee, and representatives of the Central Bank of Kuwait, the Capital Markets Authority, the Public Institution for Social Security, the Kuwait Authority for Investment, and the Economic Association.

Period
The decision specified a period not exceeding one month for the committee to prepare its recommendations. This decision can be considered as a remarkable indication that Minister Al-Aiban is dedicating his efforts to developing the capital markets system as soon as possible. The ministerial decision regarding the formation of the committee stated the following: Article 1 - A committee is formed to study proposals to remove obstacles to the development of the Kuwaiti capital market. It will be headed by the CEO of the Kuwait Stock Exchange Company Muhammad Saud Al-Osaimi. Muhammad Al-Khamis, the representative of the Central Bank of Kuwait will be the Vice-Chairman.

The representative of the Kuwait Investment Authority Yousef Al- Mulla, the representative of the oil sector Shaima Al-Ghunaim, the representative of the Public Institution for Social Security Hamad Al-Sanea, the representative of the Kuwait Economic Society Muhammad Al-Joaan, and the representative of the Ministry of Commerce and Industry Dr. Abdullah Muhammad Al-Awadhi will serve as members of the committee. Article 2 - The committee is concerned with studying proposals to remove obstacles to the development of the Kuwaiti capital market, and developing the necessary proposals, mechanisms and solutions in this regard.

This particularly includes the following:

1. Studying the mechanisms for preparing a market development plan, and submitting it to the Capital Markets Authority for approval.

2. Developing proposals to remove obstacles that prevent the establishment of a trading platform for shares of small and medium companies.

3. Submitting a proposal for activating the crowdfunding mechanism in coordination with the Ministry of Commerce and Industry and the Central Bank of Kuwait. Deciding whether or not a draft law should be prepared that excludes crowdfunding mechanisms from some of the restrictions stipulated in the companies law.

4. Studying ways to expedite offering financial derivatives, including future contracts.

5. Submitting a proposal for enhancing the purposes of financial brokerage firms to include providing financial research, margin financing, and stock lending and borrowing.

6. Working on setting indicators to measure the competitiveness of the Kuwaiti capital market compared to emerging markets in the region.

This includes examining ways to attract new listings and remove any obstacles in this regard, as well as balancing the obligations imposed on companies on the one hand, and the returns they achieve from their work on the other hand.