Kuwait Takes Steps To Boost Capital Market’s Operational Efficiency

Kuwait is set for pivotal capital market transformation as part of its efforts to boost efficiency and woo big investment.

The move is aimed at reshaping the regulatory and operational infrastructure of the market, thus paving the way for the introduction of new instruments and investment products.

Reaffirming its commitment to building a more efficient, attractive, and globally competitive market that meets investor ambitions and aligns with international best practices, the Kuwaiti capital market apparatus has launched part two of the third phase of its comprehensive market development programme.

This phase included a series of core initiatives aimed at strengthening the operational and regulatory infrastructure as well as expanding the range of products and services in the Kuwaiti capital market.

Led by the Capital Markets Authority (CMA) and in collaboration with the Central Bank of Kuwait, local banks, investment firms and brokerage companies, Boursa Kuwait and the Kuwait Clearing Company (KCC) delivered a variety of transformative products, services and infrastructure enhancements, including the introduction of the Central Counterparty (CCP) framework, which reduces risks and provides guarantees to advance clearing and settlement processes in line with international standards.

Among the other enhancements are cash settlements through local banks and the Central Bank of Kuwait’s KASSIP system; the upgrade of brokerage firms’ operating models to 'Qualified Broker' status, marking a significant step forward in market structure; and the introduction of sub-account numbers under omnibus accounts, which will strengthen transparency and oversight.

In addition, the technical environment and IT infrastructure have been fully prepared and upgraded, with comprehensive testing conducted with all relevant parties in preparation for the listing and trading of Exchange-Traded Funds (ETFs) and fixed-income instruments, including bonds and sukuk. Legislative updates for these products are expected to be introduced later.

This milestone represents one of the most significant transformations in the market’s history since the privatization of Kuwait’s stock exchange. It aims to reshape the regulatory and operational infrastructure of the market, paving the way for the introduction of new instruments and investment products that will deepen market liquidity, enhance its breadth and reinforce its role as a strategic driver of national economic growth.

On the key achievement, Boursa Kuwait Chairman Bader Nasser Al Kharafi said these developments represent a pivotal milestone in the continued advancement of Kuwait’s capital market, thus reinforcing its position and competitiveness on both regional and international levels.

He highlighted that this achievement also reflects Boursa Kuwait’s steadfast commitment to supporting the state’s ambitious vision of establishing Kuwait as a leading regional financial centre that attracts investment, while working in close partnership with all stakeholders to implement a comprehensive strategic roadmap that accelerates market development and enhances its contribution to national economic growth.

"We greatly value the remarkable efforts that have driven the various phases of the Market Development Program for Kuwait’s capital market, a reflection of the power of constructive cooperation between the public and private sectors, which stands as a national model for realizing economic objectives and development ambitions rooted in innovation and professionalism," stated Al Kharafi.

"This collaboration has played a vital role in advancing market infrastructure and introducing sophisticated products and services that promote a more transparent and dynamic investment environment. These efforts are essential to attracting capital, generating added value for the national economy, and supporting the diversification of income sources,” he added.

Boursa Kuwait said it led the efforts to prepare the market’s infrastructure for the launch of this latest phase, which represents a significant operational milestone for the bourse and the capital market apparatus.

The exchange was instrumental in implementing the technical framework in MD 3.2, as it continued upgrading the trading system, which will support the introduction of new products, strengthen market integration, and lay the foundation for future offerings such as derivatives.

The upgrades also highlight the market’s readiness to broaden its range of investment instruments and align its regulatory framework with world-class standards, sauid its top official.

"The launch of this phase reflects our unwavering commitment to developing an advanced, efficient trading environment that meets the highest international standards," remarked its CEO Mohammed Saud Al Osaimi.

"It is the product of close collaboration across the capital market apparatus and represents a key step in expanding the depth, transparency and resilience of Kuwait’s capital market," he added.-TradeArabia News Service