CMA LAW: 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 their Amendments for the Purpose of Regulating Margin Trading

Kuwait, April 22, 2021 – Within the framework of CMA’s efforts in raising the efficiency of the market, developing it, and diversifying its investment tools to create an attractive investment environment in accordance with the best international practices. The Capital Markets Authority issued on Thursday April 22, 2021 its Resolution No. (53) of 2021 regarding amending some provisions of the Executive Bylaws of Law No. 7 of 2010 and their amendments for the Purpose of regulating Margin Trading. It is considered an investment service that allows the clients to receive the necessary facilities to multiply their purchasing power and benefit from the investment opportunities available for trading on securities in the Exchange. This amendment is a result of a joint effort by the Capital Markets Authority, Boursa Kuwait Securities Company, and Kuwait Clearing Company.

Offering this service is limited to the persons licensed to practice the activity of investment portfolio manager, provided that the base of the licensed persons shall be broadened to offer the service later. The aim of regulating Margin Trading is to increase liquidity in the Exchange, raise efficiency, and protect the investors. 

The amendments of CMA’s resolutions to regulate Margin Trading are as follows: 
• Adding the definitions of Margin Trading to Module One (Glossary) of the Executive Bylaws of Law No. 7 of 2010 and their amendments. 
• Adding the provisions regulating Margin Trading to Module Eleven (Dealing in Securities) of the Executive Bylaws of Law No. 7 of 2010 and their amendments. 
• Approving the amendments of the rules of Kuwait Clearing Company regarding Margin Trading.

This resolution is part of series of resolutions that aim to diversify the investment tools to be in line with the best international practice and standards to develop the capital market system in Kuwait. The CMA would like to emphasize on its compliance with performing its role in supporting the local economy and achieving the objectives of the vision of “New Kuwait 2035” that aim to transfer Kuwait into regional financial and commercial center. 

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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.
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