Title: Launching A New Era in Over the Counter Trading (OTC)

Kuwait City, November 17, 2018- Based on the role of the Capital Markets Authority in regulating the securities activity, the Board of Commissioners issued Resolution No. (139) of 2018, announcing the launch of Over the Counter Trading as of Sunday 18 November 2018. This resolution by the Authority has come after CMA’s approval of OTC rule book issued by Boursa Kuwait Securities Company after more than two years of collaboration and team work between the Authority, Boursa Kuwait and Kuwait Clearing Company to complete this significant project as required. All concerned parties have carried out the necessary technical tests over the past months to ensure that the automated systems and administrative procedures are in place to ensure proper trading in the OTC trading system without any complications.

The system will provide an automated platform for OTC trading other than by using manual procedures previously. One of the most important features of this platform is the process of facilitating the trading of shares of unlisted companies and allowing the shareholders of companies that are delisted or canceled to act on their shares by providing a clear and organized mechanism for this purpose. This system will also enable traders to access the necessary data, such as company stock prices and the order schedule, through the services provided by Boursa Kuwait Securities Company for this purpose, which will in turn lead to greater transparency in OTC trading and to provide reference prices to the investor to build the right investment decision. The Kuwait Clearing Company will also play an important role in settling the transactions executed through this system. This will lead to a reduction in the administrative procedures executed by the brokerage companies with their clients.

 It should be noted that the obligations imposed on listed companies on the Securities Exchange do not fall on the shares of companies traded in OTC market, as registration of those companies for trading in this market is not considered a listing. The role of the Authority and the Securities Exchange and clearing company in this system is limited to following up on the trading and settlement of unlisted securities. The Authority or the Securities Exchange do not require any audit of the financial statements or any obligation on the companies of the disclosure requirements on the companies participating in this platform. Accordingly, we recommend that investors take sufficient care to consider the feasibility of investing in the shares of these companies before making any investment decision due to the risks that may surround the trading process in this platform for the reasons mentioned above. The Authority also recommends going over the rule book of OTC trading issued by Boursa Kuwait Securities and the Collateral Document issued by Kuwait Clearing Company both approved by the CMA to know their rights and duties of OTC trading.

 In conclusion, the Authority would like to thank Boursa Kuwait Securities Exchange, Kuwait Clearing Company, brokerage companies and all employees of these organizations for their outstanding role in achieving this accomplishment. We would like to continue to utilize all necessary efforts in organizing and developing the securities activity in the State of Kuwait, in the belief of our role in realizing the vision of Kuwait 2035 and working to make Kuwait a financial and commercial center.

-Ends-

 Notes to Editors:
The Capital Markets Authority was established pursuant to Law No. 7/2010, approved by the Kuwaiti Parliament in February 2010, and amended by Law No. 108/2014. Pursuant to the Law, the Authority 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 Authority's Law.
Furthermore, the Law's provisions stipulate the supervision of mergers, acquisitions, and disclosure operations. The Authority also aims to provide awareness programs related to securities activities.
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