Title: The Capital Markets Authority Issues Regulatory Rules and Provisions of Passported Funds

Kuwait, December 29, 2024 - Based on the objectives of the primary law of the Cooperation Council for the Arab States of the Gulf (GCC) that aims for closer ties and stronger relations between the Member States and for the importance of developing the cooperation relations between them in various fields, and in line with the economic agreement of the GCC aimed at strengthening  the economies of the Member States in light of the global economic developments and enhance their competitive abilities, in particular Article 5 of the agreement which stipulates:
“Integration of the financial markets in the Member States and unifying the policies and systems related to them.”
which was issued pursuant to Law No. 5 of 2003 approving the Unified Economic Agreement between the GCC countries on February 18, 2003, and in continuation of the efforts of the Capital Markets Authority (CMA) to regulate and develop and supervise the capital markets and securities activities, including the development of local, regional and foreign investments in the Member States, and to provide a transparent and stable investment environment.
The CMA has issued today, Sunday 29/12/2024 Resolution No. (169) of 2024 regarding the amendment to some provisions of the Executive Bylaws of Law No. 7 of 2010 Regarding the Establishment of the Capital Markets Authority and Regulating Securities Activities and amendments thereto, as a notification to the start the first steps towards the financial markets integration in the Member States through the regulation of rules and provisions of (Passported Funds), which includes amendment to the following:
• Module One (Glossary).
• Adding Chapter Three (Passported Funds) to Moule Eighteen.
• Amending Schedule of the CMA Services Fees.

The most significant positive economic impacts that we look forward to are as follows:
• Achieving a step towards the financial markets’ integration and the regulatory consistency among regulatory entities in the GCC, countries which contributes to reducing or eliminating additional and repetitive regulatory requirements imposed on funds in each GCC country.
• Enabling all GCC funds to market units in all the Member States without the need for obtaining a license in each country, saving time and effort.
• Opening new markets with a wider client base to enable the fund managers to market their local funds without the need to establish and license sub-companies in the Member States to offer the same activities provided by the parent company licensed in the country of origin, which leads to offering further investment opportunities for the GCC citizens and residents and diversifying the investment fields.
• Encouraging the investment funds managers in the region to develop their skills in the management of assets and funds and create a sound competitive environment for the funds of outstanding performance and ending with achieving an optimal entity for one economic region that provides freedom in the movement of capital, investment, and workforce.
In this regard, the most prominent technical features of the rules and provisions of Passported Funds according to the latest amendments are as follows:
• Passported Fund is any Fund or Collective Investment Scheme, or joint investment program established and licensed or regulated by any of the Regulatory Entities in the Gulf Cooperation Council countries and managed by a Licensed Person for specific fees.
• The funds licensed by the CMA may submit an application to the CMA to register a Passported Fund in the financial products register to market its units in one of the regulatory bodies according to the conditions stipulated in Chapter Three (Passported Funds) of Module Eighteen of the Executive Bylaws.
• The CMA, based on a notification submitted to it by one of the regulatory bodies, may register a Passported Fund in its financial products register and permit marketing its units in the State of Kuwait according to conditions stipulated in Module Eighteen of the Executive Bylaws, provided that it is conducted by the marketing person that is a person licensed by the CMA to practice the activity of Collective Investment scheme Manager or Subscription Agent (Selling) and conducts Passported Marketing processes in the State of Kuwait after obtaining the CMA’s permission.
In conclusion, the CMA invites all licensed persons and concerned parties to view the latest draft of the amendments and comply with its provisions through visiting the following link:
www.cma.gov.kw
The CMA will also invite licensed persons and concerned parties to attend an awareness workshop during the coming period to discuss these amendments.
 

Ends-
Notes to Editors:
The Capital Markets Authority was established pursuant to Law No. 7/2010, approved by the Kuwaiti Parliament in February 2010. Pursuant to the Law, the CMA shall regulate and supervise the securities activities, achieve transparency and fairness, observe listed companies’ execution of Corporate Governance regulations, and protect investors from unfair practices which violate the CMA's Law.
Furthermore, the Law's provisions stipulate the supervision of mergers, acquisitions, and disclosure operations. The CMA also aims to provide awareness programs related to securities activities.
For further information, please contact:
Public Relations & Media Office
Tel: 1888898
Email: pr-media@cma.gov.kw