Law No. 7 of 2010 on the Capital Markets Authority and Securities Activities

Law No. 7 of 2010
on the Establishment of the Capital Markets Authority and the Regulation of Securities Activities

Chapter One
Definitions

Article 1

The following words and expressions – wherever they appear in this Law – shall have the meanings assigned to each of them:
The Competent Minister: The Minister of Commerce and Industry.
The Authority: The Capital Markets Authority.
The Board: The Board of Commissioners of the Capital Markets Authority.
The Executive Regulations: The Executive Regulations of this Law.
The Exchange: A Securities Exchange or Securities Markets.
Members of the Exchange: The companies and funds listed on the Exchange, and Brokers.
Clearing Agency: The entity that carries out the clearing and settlement of Securities trades and the central depository operation for Securities, and other services related thereto.
Person: A natural person or a corporate entity.
Issuer: A corporate entity entitled to issue Securities.
Listed Company: A shareholding company listed on the Exchange.
Security: Any instrument – whatever its legal form – evidencing a share in a financing transaction, negotiable under a licence from the Authority, such as:
a – Shares issued or proposed to be issued in the capital of a company.
b – Any instrument creating or acknowledging a debt that has been or will be issued by a company.
c – Loans, bonds, Sukuk and other instruments convertible into shares in the capital of a company.
d – All negotiable public debt instruments issued by the various government bodies or by public authorities and institutions.
e – Any right, option or derivative relating to any of the Securities.
f – Units in a Collective Investment Scheme.
g – Any paper or instrument that the Authority considers a Security for the purposes of applying this Law and the Executive Regulations.
The following shall not be considered Securities: commercial papers such as cheques, bills of exchange and promissory notes, as well as letters of credit, money transfers, instruments traded by banks exclusively among themselves, insurance policies, and the rights of beneficiaries in retirement funds.
Dealing in Securities: A Person’s dealing in a Security for his own account or on behalf of others by selling it, buying it, submitting an offer to sell, buy or acquire it, issuing it, offering it for subscription, subscribing to it, waiving the right to subscribe to it, promoting it, marketing it, underwriting the subscription to it, holding it in custody, listing it, depositing it, settling it, financing dealing in it, lending it, short selling it, pledging it, assigning it, or any other transaction that the Authority considers Dealing in Securities.
Trader: A Person who engages in the purchase and sale of Securities for his own account.
Broker: A corporate entity that practises the profession of purchasing and selling Securities for the account of others in consideration of a commission.
Investment Portfolio: An account opened for a client with one of the companies licensed to manage investment portfolios, comprising cash, Securities or other assets owned by the client, in accordance with the controls laid down by the Authority. An investment portfolio is either a custody portfolio or a portfolio managed by the portfolio manager or by the client.
Investment Portfolio Manager: The Person entrusted with managing investment portfolios on behalf of clients, for the benefit of clients, or for the benefit of the company in which he works.
Investment Advisor: A corporate entity that provides investment advice relating to Securities in consideration of a commission.
Collective Investment Scheme: An entity engaged in investing the funds of its investors in various investment instruments.
Custodian: A corporate entity licensed by the Authority to practise the safekeeping of the assets comprised in Collective Investment Schemes in accordance with the provisions of this Law and the Executive Regulations.
Subscription Agent: The Person who offers or sells Securities for the benefit of their Issuer or its Ally, or obtains Securities from the Issuer or its Ally for the purpose of re-marketing them.
Insider: Any Person who, by virtue of his position, has had access to information or data having a material effect on a Listed Company that was not available to the public.
Public Offering: The process of inviting the public, through the various means of publication, to subscribe to or purchase Securities.
Private Placement: An invitation addressed to a specific group or to a specific Person or Persons to subscribe to a Security.
Ally: The Person who is subordinate to another Person or other Persons or is subject to their authority.
The Competent Court: The Capital Markets Court provided for in this Law.
Actual Control: Any situation, agreement, or ownership of shares or interests, whatever their percentage, that leads to control over the appointment of the majority of the members of the Board of Directors, or over the resolutions issued by it or by the general assemblies of the company concerned.
Market Maker: The Person who works to provide supply and demand for one or more Securities in accordance with the controls laid down by the Authority.
Option Contracts: A contract or agreement that gives a Person the right, but not the obligation, to purchase or sell a Security or a group of Securities, but this right does not carry the right to own the Securities.
Financial Derivatives: Financial instruments whose value derives from the value of the underlying assets, such as shares, bonds, commodities and currencies, and which may be purchased, sold and traded in a manner similar to shares or any other financial assets.
Ask Offer: The wish to dispose of the ownership of a Security listed on the market, through the market, for a cash consideration.
Bid Offer: The wish to acquire ownership of a Security listed on the market, through the market, for a cash consideration.
Related Person: An individual who holds the position of member of the Board of Directors or of the executive or supervisory management of a Broker or an Investment Advisor, or works as a manager or holds a supervisory position at the aforementioned entities, or works as an employee or representative of any of those entities who deals with the public, or has discretion over Securities or funds as part of his work at the entity licensed to operate in the field of Securities.
Secondary Market: The market or markets in which Securities are sold and purchased and their ownership is transferred under the regulations, rules and laws governing them.
Investment Controller: A corporate entity licensed to practise the activity of monitoring and supervising Collective Investment Schemes.
Credit Rating Agency: A corporate entity licensed to practise the activity of credit rating or the activity of rating credit information.
Inside Information: Information or data not disclosed to the public which, if disclosed, would affect the price or trading of the Security.
* Replaced by Law No. 22 of 2015 (Kuwait Al-Youm, Issue No. 1235, 10 May 2015).
* The definitions of “Competent Minister” and “Competent Court” will be replaced as of 1 October 2027 by Decree-Law No. 91 of 2026.

Chapter Two
Capital Market Authority

Article 2

An independent public authority having legal personality, supervised by the Minister of Commerce and Industry, shall be established and shall be called the “Capital Markets Authority”.

Article 3

The Authority aims to:
1 – Regulate Securities activity in a manner characterised by fairness, competitiveness and transparency.
2 – Develop the capital markets and diversify and develop their investment instruments, while seeking to conform to the best international practices.
3 – Provide protection to those dealing in Securities activity.
4 – Reduce the typical risks expected to occur in Securities activity.
5 – Apply a policy of full disclosure so as to achieve fairness and transparency and prevent conflicts of interest and the exploitation of Inside Information.
6 – Work to ensure compliance with the laws and regulations relating to Securities activity.
7 – Raise public awareness of Securities activity and of the benefits, risks and obligations associated with investment in Securities, and encourage its development.
* Replaced by Law No. 22 of 2015 (Kuwait Al-Youm, Issue No. 1235, 10 May 2015).

Article 4

The Board of Commissioners of the Authority shall have competence over the following:
1 – Issuing the regulations and instructions necessary to implement the Law; it shall also issue the recommendations and studies necessary to develop the laws that help achieve its objectives.
2 – Subject to the provisions of Article (33) of this Law, the Board shall issue licences to Securities Exchanges and related activities and shall monitor their activity.
3 – Issuing licences for membership of Securities Exchanges, licences for those working in them, and for everyone who works in the management of Securities activity, including asset management companies, investment funds, financial brokerage companies, Securities custody companies, advisory services institutions and others.
4 – Regulating the promotion of investment funds and other Collective Investment Schemes.
5 – Regulating, supervising and monitoring the public and private subscription of Kuwaiti and non-Kuwaiti Securities.
6 – Regulating, supervising and monitoring acquisition and merger transactions.
7 – Laying down the rules of supervision and self-regulation in Securities activity.
8 – Approving and adopting all the rules and controls laid down by the Exchange administration for conducting its business.
9 – Laying down and adopting rules of compliance with professional ethics, competence and integrity for Licensed Persons.
10 – Providing appropriate systems to protect those dealing in Securities activity and working to limit improper, illegal and unfair practices in Securities activity.
11 – Cooperating with supervisory authorities and similar foreign institutions with respect to regulation, coordination and participation in joint activities.
12 – Carrying out all the duties and powers entrusted to it under this Law or any other law with the aim of avoiding market disruption.
13 – Issuing all decisions that fall within the competence of the Authority and are necessary to implement the provisions of this Law and its Executive Regulations; it may delegate some of these powers.
14 – Laying down the special rules, systems and procedures required for the activity of all Licensed Persons who operate in accordance with the provisions of Islamic Sharia.
15 – Issuing special rules for the activity of the Market Maker.
* Replaced by Law No. 22 of 2015 (Kuwait Al-Youm, Issue No. 1235, 10 May 2015).

Article 5

The Authority shall carry out all the acts necessary to achieve its objectives – in accordance with the provisions of this Law – and in particular the following:
1 – Filing civil, commercial and administrative lawsuits relating to the application of the provisions of this Law and the regulations, instructions and rules issued thereunder, or those in which the Authority has an interest.
2 – Receiving complaints submitted regarding the violations and crimes provided for in this Law, conducting administrative investigations into them, and referring them to the Disciplinary Board if it deems fit.
3 – Taking all measures that may lead to the detection of the crimes provided for in this Law, and referring criminal complaints to the Public Prosecution in every incident suspected of being a crime, whether committed against the Authority or against those dealing in Securities activity.
4 – Conducting inspection and supervision of Dealing in Securities and of the activity of the Persons licensed under this Law.
5 – Purchasing, possessing and disposing of property of any description, and carrying out all forms of legal acts.
6 – Printing and publishing material related to Securities activity.
7 – The Authority may impose fees commensurate with the service, and collect fines within the limits of the application of this Law. It may do all things necessary to enable it to perform its functions and achieve its objectives set out in this Law.
8 – The Authority shall lay down the rules regulating Dealing in Securities and the transfer of their ownership, and the provisions of Articles (508), (992) and (1053) of the Civil Code and Articles (231), (232), (233) and (237) of the Commercial Law shall not apply to such dealings. The Authority shall also lay down the rules regulating execution against Securities without being bound by the provisions of Book Three of the Civil and Commercial Procedures Law and the Executive Regulations of the Companies Law.
9 – Issuing the rules regulating special purpose companies that issue Securities, without being bound by the provisions of the Companies Law.
10 – The Authority may establish, or participate in establishing, an educational or training institution in the field of Securities markets, having legal personality and subject to the control and supervision of the Authority alone. Such institution shall be regulated by regulations and rules issued by the Authority.
* Replaced by Law No. 22 of 2015 (Kuwait Al-Youm, Issue No. 1235, 10 May 2015).

Article 6

The Authority shall be managed by a board called the Commissioners of the Capital Markets Authority, consisting of five full-time Commissioners named by a decree issued upon the nomination of the Competent Minister.
The decree shall designate, from among the members, a Chairman and a Vice-Chairman.

Article 7

A Commissioner shall be a Kuwaiti natural person of integrity, with experience or specialisation in the fields related to the work of the Authority, and shall not have been the subject of a final judgment declaring him bankrupt or imposing a custodial penalty for a felony or a crime involving breach of honour or trust.

Article 8

The Chairman shall represent the Authority before third parties and before the courts. He shall perform the work of the Executive Director, implement the decisions of the Authority, and supervise all of its technical and administrative bodies. He shall exercise his powers in accordance with the laws, regulations and decisions approved by the Board of Commissioners, and shall be responsible, together with the other Commissioners, for the management of the Authority. He may delegate some of his administrative powers to one of the Commissioners or to an administrative unit of the Authority.

Article 9

If the Chairman is absent or his office becomes vacant, and the Vice-Chairman is unable to perform his duties for any reason whatsoever, the Board shall meet within two weeks and assign a person to act as Chairman of the Board.

Article 10

The term of membership of a Commissioner shall be four years, renewable for one term only, except for the members of the first Board of Commissioners, three of whom only may be renewed for a third term. The seat of a Commissioner shall become vacant by death, incapacity or resignation. A Commissioner shall also lose his capacity, his seat shall become vacant, and a decree shall be issued terminating his membership in the following cases:
a – If a final judgment declaring him bankrupt is issued.
b – If he is convicted by a final judgment of a crime involving breach of honour or trust, or sentenced to a custodial penalty for a felony.
c – If, during one year, he is absent from three consecutive meetings or six non-consecutive meetings without an excuse acceptable to the Board of Commissioners.
d – If he breaches the provisions of Article (27) or the provisions of Article (29) of this Law.
e – If he intentionally violates the code of honour laid down by the Board of Commissioners at its first formation, which sets out the rules of conduct and ethics of Commissioners.
* Replaced by Law No. 108 of 2014 (Kuwait Al-Youm, Issue No. 1196, 10 August 2014).

Article 11

The salaries and remunerations of the Chairman, the Vice-Chairman and the other Commissioners, and any allowances or benefits paid from the funds of the Authority, shall be determined by decree, upon the proposal of the Competent Minister and the approval of the Council of Ministers.

Article 12

The Board shall meet at least eight times a year at the invitation of the Chairman, or at the request of at least two Commissioners.
* Replaced by Law No. 22 of 2015 (Kuwait Al-Youm, Issue No. 1235, 10 May 2015).

Article 13

A meeting of the Board of Commissioners shall be valid if attended by the majority of the Commissioners, provided that they include the Chairman or the Vice-Chairman, except for the meeting provided for in Article (9). The decisions of the Board shall be issued by a majority of the votes of its members.

Article 14

The Board may establish permanent or temporary advisory committees and entrust them with studying a particular matter within its competences specified in this Law, and it may seek the assistance of experts from outside the Authority in the work of the committees.

Article 15

A committee shall be organised within the Authority to receive complaints and grievances. Any interested party may submit a complaint to it about any error committed by a Licensed Person, and it shall also receive grievances against the decisions issued by the Authority. The Executive Regulations shall set out the time limits, procedures and rules of work of the committee, and the rules and procedures for challenging its decisions before the Competent Court.

Article 16

Subject to the provision of Article (2) of Amiri Decree No. (12) of 1960 promulgating the Law on the Organisation of the Fatwa and Legislation Department of the Government of Kuwait, the Authority shall have a Legal Department reporting to the Chairman of the Authority, which shall handle all cases and appear before all courts and arbitration panels, or give legal opinions and conduct investigations.
It shall also prepare drafts and proposals of laws, regulations and decisions relating to the Authority and its work.
* Replaced by Law No. 22 of 2015 (Kuwait Al-Youm, Issue No. 1235, 10 May 2015).

Article 17

The Board of the Authority shall lay down the administrative and financial regulations for the affairs of the employees of the Authority without being bound by the rules prescribed for civil servants in the Civil Service Law and its Statute, provided that the latter law and its Statute shall apply where no special provision exists.
The Chairman of the Board of Commissioners of the Authority shall have the powers of the Minister and of the Civil Service Commission with respect to the employees of the Authority.

Article 18

The Authority shall have an independent budget issued by law and prepared in accordance with the rules specified by the Executive Regulations, subject to the provisions of Decree-Law No. (31) of 1978 on the Rules for Preparing Public Budgets, Monitoring their Execution and the Final Accounts. The financial year shall begin on the first of April and end at the end of March of each year. The Executive Regulations shall set out the financial rules and procedures governing the Authority’s disposal of its funds, the books it shall keep to record its operations, and the manner in which its accounts are audited. The Chairman of the Board of Commissioners shall have the powers of the Minister of Finance with respect to the provisions of the aforementioned Decree-Law.
* Replaced by Law No. 22 of 2015 (Kuwait Al-Youm, Issue No. 1235, 10 May 2015).

Article 19

The financial resources of the Authority shall consist of the proceeds of the fees prescribed by this Law and its regulations and collected for the account of the Authority, the amounts allocated to it from the State budget, or any other resources derived from the exercise of its activity or the investment of its reserves.
* Replaced by Law No. 22 of 2015 (Kuwait Al-Youm, Issue No. 1235, 10 May 2015).

Article 20

Any funds owed to the Authority by third parties shall be considered public funds and shall enjoy the same treatment as debts owed to the Public Treasury, and shall be collected in accordance with the procedures for collecting debts owed to the Public Treasury.

Article 21

The Authority shall have cash reserves ensuring its long-term financial stability in order to meet the typical risks expected to occur in Securities activity. The amount of these reserves and the manner of their formation shall be determined by a decision of the Council of Ministers – upon the proposal of the Board. The Authority shall invest these reserves. If they reach the determined amount, the surplus shall be transferred to the Public Treasury of the State, and if at any time they fall below the determined amount, the Government shall make up and pay the shortfall.
The Authority shall also have an operating capital of forty million Kuwaiti Dinars (KD 40,000,000), to be used to meet the expenditure on all aspects of the Authority’s activity, and to be paid and covered directly from the cash reserves of the Authority in accordance with the rules set out in the Executive Regulations. The capital of the Authority may be increased by decree.
* Replaced by Law No. 22 of 2015 (Kuwait Al-Youm, Issue No. 1235, 10 May 2015).

Article 22

The Authority shall keep appropriate books of account and records of its revenues, expenses, assets and liabilities and of all transactions of the Authority, and the Authority shall have one or more independent auditors.
The Authority shall lay down the rules and conditions to be met by the auditors registered in the register kept by the Authority for this purpose.

Article 23

Without prejudice to the subsequent audit of the Authority by the State Audit Bureau, the Authority shall not be subject to the prior audit of the State Audit Bureau, nor to the provisions of Public Tenders Law No. 37 of 1964 and its amendments.

Article 24

Without prejudice to the provisions of this Law, the Authority is prohibited from carrying out any commercial business, and it may not lend funds, or issue or invest in Securities.
* Replaced by Law No. 22 of 2015 (Kuwait Al-Youm, Issue No. 1235, 10 May 2015).

Article 25

The Authority shall submit to the Competent Minister an annual report, to be submitted to the Council of Ministers, within 120 days of the end of each financial year, on its activities, work and achievements in developing and growing the market during the preceding year, provided that it includes the accounts of the Authority and the auditor’s report.
* Replaced by Law No. 22 of 2015 (Kuwait Al-Youm, Issue No. 1235, 10 May 2015).

Article 26

No Commissioner or employee of the Authority who is invited to a meeting within the scope of the Authority’s competence, and who has a direct or indirect interest in the matter put forward for discussion, may participate in discussing it, expressing an opinion on it or voting on it. He shall disclose this interest at the beginning of the meeting and leave the meeting before the discussion of the matter begins.
Every person invited to a meeting within the scope of the Authority’s competence who has a direct or indirect interest in the matter put forward for discussion shall also disclose this interest at the beginning of the meeting and before participating in discussing it or expressing an opinion on it.
In all cases, the chairman of the meeting shall alert those present to the necessity of the disclosure referred to in the two preceding paragraphs.
* Replaced by Law No. 22 of 2015 (Kuwait Al-Youm, Issue No. 1235, 10 May 2015).

Article 27

Commissioners and employees are prohibited, while serving at the Authority, from carrying out any commercial business on their own behalf or as an agent, guardian or testamentary guardian. Nor may any of them practise any other job, profession or work in the public or private sector, or provide any services or advice, directly or indirectly, or participate in the membership of the board of directors of any entity subject to the supervision of the Authority or any entity related thereto.

Article 28

Every member of the Board and every employee shall, immediately upon assuming his duties, declare in writing to the Authority the Securities listed on the Kuwait Stock Exchange that are owned by him and by his minor children under his guardianship, and shall also disclose in writing any change thereto in accordance with the rules laid down by the Board.
The members of the Board are prohibited from dealing in the shares of companies subject to the supervision of the Authority throughout the period of their membership of the Board.
* Replaced by Law No. 22 of 2015 (Kuwait Al-Youm, Issue No. 1235, 10 May 2015).

Article 29

Every Commissioner or employee, or any person working in or with the committees of the Authority, with or without remuneration, shall maintain the confidentiality of the information that reached him by virtue of his position and shall safeguard the documents in his possession, and no one other than the competent persons at the Authority shall have access to them, unless this Law or any other law so requires, or a judgment or order is issued by a judicial authority obliging him to disclose or provide any information or documents obtained by him by virtue of his position.
* Replaced by Law No. 22 of 2015 (Kuwait Al-Youm, Issue No. 1235, 10 May 2015).

Article 30

The employees of the Authority designated by a decision of the Competent Minister shall have the capacity of judicial police officers in establishing the crimes committed in violation of the provisions of this Law and the decisions issued in implementation thereof. For this purpose, they may inspect the records, books, documents and data at the premises of the companies operating in the field of Securities, at the premises of the Securities markets, or at any other entity where they are kept.
The officials of the entities referred to in the preceding paragraph shall provide the said employees with the data and documents they request for this purpose.

Chapter Three
Securities Exchanges

Article 31

A Securities Exchange means the market competent to match Ask Offers and Bid Offers for Securities, which follows the trading procedures and performs the functions customarily performed by financial markets.

Article 32

No Person may establish or operate, or assist in establishing or operating, a Securities Exchange except after obtaining a licence under this Law and in accordance with the rules and regulations approved by the Authority. The Authority alone shall have competence to issue such licence, which shall be published in the Official Gazette.

Article 33

The Authority shall grant an Exchange licence to a shareholding company that shall replace the Kuwait Stock Exchange. The capital of this company shall be determined by a decision of the Board of Commissioners, and its activity shall be limited to operating the Securities Exchange. The Authority shall be charged with establishing this company, provided that its shares are allocated as follows:
1 – A percentage of not less than six per cent (6%) and not more than twenty-four per cent (24%) shall be allocated to the public entities entitled to own shares, and the percentage not subscribed shall pass to the winning investor.
2 – A percentage of not less than twenty-six per cent (26%) and not exceeding forty-four per cent (44%) shall be allocated for subscription by the companies registered on the Kuwait Stock Exchange together with a global exchange operator, or by a global operator alone. The Authority shall lay down the conditions and controls to be met by the bidders and the auction, and the auction shall be awarded to whoever offers the highest price per share above its nominal value plus the incorporation expenses – if any.
3 – A percentage of fifty per cent (50%) shall be allocated for public subscription by all citizens.
4 – The Board of Commissioners charged with establishing the company shall determine its capital and distribute all the shares allocated for public subscription equally among all Kuwaitis whose names are registered with the Public Authority for Civil Information on the day of the subscription, provided that the value of these subscriptions is paid by the citizens to the Authority in accordance with the procedures and in the manner determined by the Authority, without any interest, fees or any increase over the share price on the date of the subscription, no later than the day at the end of which sixty days expire, counted from the first day of the month following the month in which the Authority invited the citizens, through the Kuwaiti print, audio and visual media, to pay the value of the subscriptions due from them.
The Authority shall include in the Prospectus a clause permitting citizens to request an increase in their allotment from the shares whose value has not been paid to the Authority, so as to ensure that the fifty per cent (50%) allocated to citizens is fully covered. The Authority shall determine the mechanism and procedures for allotting the amount of the increase and distributing it among those citizens, and the manner, procedures and dates of their payment of its value to the Authority.
The Authority may approve the licensing of other exchanges, whose capital, activity, the conditions of their business and management, and all matters relating to them shall be determined by a decision of the Board of Commissioners.
* Replaced by Law No. 22 of 2015 (Kuwait Al-Youm, Issue No. 1235, 10 May 2015).

Article 34

The Exchange shall – after the approval of the Authority – set the procedures, rules and regulations that the Licensed Exchange shall follow for the trading and transfer of ownership of Securities listed on the Exchange.
The Executive Regulations of the Law shall determine the procedures, rules and regulations that the Licensed Exchange shall follow for the trading and transfer of ownership of Kuwaiti Securities not listed on the Exchange.
* Replaced by Law No. 22 of 2015 (Kuwait Al-Youm, Issue No. 1235, 10 May 2015).

Article 35

The following shall be required of a member of the Board of Directors of the Exchange, and for continuing to hold that position:
1 – He shall not have been previously convicted of a crime involving breach of honour or trust.
2 – He shall not have been declared bankrupt by a final judgment.
3 – He shall be of good reputation.
4 – He shall have experience in financial, economic and legal affairs in accordance with the rules and controls issued by a decision of the Authority.
* Replaced by Law No. 22 of 2015 (Kuwait Al-Youm, Issue No. 1235, 10 May 2015).

Article 36

The Exchange shall be managed by a Board of Directors formed of a Chairman, a Vice-Chairman who shall replace him in his absence, and six members who shall be elected and chosen by the general assembly of the company after the approval of the Board.
The Chairman of the Board of Directors of the Exchange, or whoever acts on his behalf, shall notify the Board of the names of the candidates for membership of the Board of Directors of the Exchange at least thirty days before the date set for the meeting of the general assembly of the company to elect the members of the Board of Directors.
The Board may, within fifteen days of being notified, object by a reasoned decision to any of the candidates for failing to meet the required conditions.
Such objection shall result in the exclusion of the candidate for membership of the Board of Directors, and no candidate of whom the Board has not been notified, or to whom an objection has been made in accordance with the provisions of this Article, may be presented to the general assembly of the company.
The Board may request the Board of Directors of the Exchange to remove any of the members if he loses – while holding his position – one of the conditions stipulated in the preceding Article, or if the Board considers that such a measure would preserve the safety of the Traders’ funds or the public interest of the Exchange. If the removal is not effected, the Board may issue a reasoned decision excluding him from his work, and this shall be recorded in the Authority’s register.
* Replaced by Law No. 22 of 2015 (Kuwait Al-Youm, Issue No. 1235, 10 May 2015).

Article 37

The Chairman of the Board of Directors shall represent the Exchange before third parties and before the courts, in addition to the other competences set out in the Memorandum of Incorporation and the Articles of Association, and shall also implement the decisions of the Board of Directors.
The Exchange shall have one or more Chief Executive Officers appointed by the Board of Directors in accordance with the controls set by the Authority and after its approval. The Chief Executive Officer shall be entrusted with managing the Exchange, and the Board of Directors shall determine his remuneration and powers. The positions of Chairman of the Board of Directors and Chief Executive Officer may not be held by the same person.
* Replaced by Law No. 22 of 2015 (Kuwait Al-Youm, Issue No. 1235, 10 May 2015).

Article 38

The Exchange shall:
1 – Ensure the existence of a Securities market characterised by fairness, transparency and efficiency.
2 – Ensure the existence of prudent management of the risks relating to its business and operations.
3 – Give precedence to the public interest where it conflicts with the interest of the Exchange or of its members, shareholders or management.
4 – Provide and operate its services in accordance with the rules and regulations determined by the Authority.
5 – Regulate its operations, the standards of its practice and the conduct of its members in accordance with the rules, policies and procedures of the Exchange.
6 – Regulate the operations and standards of practice of the companies listed on it and of their employees in accordance with the regulations governing the same.
7 – Provide its services in accordance with the latest technologies, applications and automated systems, in line with the international standards approved by the Authority or those determined by it.
8 – Maintain the confidentiality of all information in its possession relating to its members and clients, except for what the law or regulations require it to publish or disclose; it may not disclose such information except to the Authority, or by order of the Authority or by order of a judge.
9 – Comply with the instructions issued by the Authority.

Article 39

The Exchange company shall promptly notify the Authority of the following:
1 – If it becomes apparent to it that one of its members is unable to comply with any of the rules of the Exchange or the financial resources controls.
2 – If it considers that there is a financial irregularity or any other matter that may indicate the insolvency of the member or his inability to meet his obligations.
3 – Any disciplinary action it takes against any member, or anyone working with or affiliated to him.

Article 40

The Board of Commissioners of the Authority may request the Exchange to prepare specific rules in its field of work, or to amend them, within a specified period. If the Exchange does not comply with the request or with the period specified for it in the request, the Authority may, on behalf of the Exchange, prepare or amend the rules, and the Exchange shall bear the costs.

Article 41

No rules issued by the Exchange, nor any amendment thereto, whether by withdrawing, replacing, changing or adding to them, shall take effect unless approved by the Authority. The Exchange shall submit to the Authority the reasons and objectives that led it to propose such rules or their amendment, and shall set out their intended effects. The Authority may, on that basis, decide to approve, not to approve or to amend them, and shall notify the Exchange of its decision within a period not exceeding three months from the date of notification of the proposal.

Article 42

A committee shall be formed at the Exchange, competent to consider the violations committed by any member of the Exchange. The Authority shall issue the instructions and controls necessary for its work and its membership. The committee may impose the following sanctions:
1 – A caution to cease committing the violation.
2 – A warning.
3 – Subjecting the violator to further supervision.
4 – Suspension from work or from practising the profession for a period not exceeding one year.
5 – Imposing restrictions on the activity or activities of the violator.
6 – Suspension of trading in a Security for a specified period in the interest of the market.
In all cases, the committee may cancel the transactions related to the violation and the effects resulting from them.
* Replaced by Law No. 22 of 2015 (Kuwait Al-Youm, Issue No. 1235, 10 May 2015).

Article 43

The management of the Exchange shall notify the Authority of any disciplinary action it takes against any of its members, of the details of the violation committed, of the measures it has taken and of the penalty imposed, and shall provide the Authority with all the documents of the matter.
The Authority may, by its own decision or on the basis of a grievance submitted by the aggrieved party within fifteen days from the date of his being notified of the decision in writing, refer the matter to the Disciplinary Board to review the disciplinary action in accordance with the review system adopted by it. The Disciplinary Board may uphold, amend or cancel the decision of the Exchange by a reasoned decision.
* Replaced by Law No. 22 of 2015 (Kuwait Al-Youm, Issue No. 1235, 10 May 2015).

Article 44

In cases of disasters, crises and disturbances that may create severely harmful effects on the market, and also where some Traders engage in misleading suggestions or signals, the Authority shall have the widest powers to issue instructions aimed at restoring fairness, transparency and efficiency to the market, and it may in particular take any of the following measures:
1 – Suspend trading on the Exchange, or in any listed Security, for a temporary period.
2 – Cancel trading for a specified period, or cancel the deals on a particular share.
3 – Issue decisions to liquidate all or part of the balances, or to reduce them.
4 – Amend the trading days and hours.
5 – Amend or suspend any of the rules of the Exchange.

Article 45

If the Exchange does not comply with the decisions or instructions of the Authority issued under the power vested in it by the preceding Article, the Authority may take whatever measure it deems appropriate to achieve orderly trading or to liquidate any position relating to Securities.

Article 46

The Authority may, by written notification to the Exchange, cancel the licence granted to it with effect from the day specified in the Authority’s decision, in the following cases:
1 – If the company loses one of the conditions that qualified it to obtain the licence.
2 – If work on the Exchange stops for more than five working days.
3 – If it is closed.
4 – If it does not comply with the instructions of the Authority despite the Authority’s warning to it.
5 – If it does not provide the Authority with the information requested by it, or provides incorrect or misleading information.
The Authority shall publish the decision cancelling the licence, and the reasons for it, in the Official Gazette.

Article 47

The Authority may, on its own initiative, grant the company a specified period, or extend the period granted to it after the date of cancellation of the licence, if the Authority considers this to be in the public interest, or at the request of the Exchange, until the operations on it are closed or until its activities are handed over to another licensed exchange.

Chapter Four
Clearing Agency

Article 48

Clearing Agency means any legal entity that undertakes settlement and clearing between traders in Securities with respect to payment or delivery or both, and that provides the services relating thereto, including the service of depositing Securities within a central system for safekeeping and transfer of ownership, or the service of central counterparty for capital markets transactions.
The Authority may grant a licence for one or more of the services of a Clearing Agency.
* Replaced by Law No. 22 of 2015 (Kuwait Al-Youm, Issue No. 1235, 10 May 2015).

Article 49

No Person may establish or manage a Clearing Agency, assist in its establishment or management, or announce that he is doing so, except after obtaining a Clearing Agency licence issued by the Authority in accordance with the conditions and restrictions determined by the Executive Regulations of the Law. The licence shall be published in the Official Gazette.

Article 50

A Clearing Agency licence may only be granted to a shareholding company whose capital is determined by the Board of Commissioners, and whose activity is the management of clearing, settlement and central depository operations for Securities and their safekeeping, and the matters related or connected thereto that are required for the proper management of the Agency.
The Authority may request from the company applying for the licence any information or data it deems necessary.
The Authority shall determine the conditions required for granting the licence, and its procedures, in the Executive Regulations of the Law.

Article 51

The Clearing Agency shall comply with the following obligations:
1 – Take fair clearing and settlement measures, with full effectiveness, in relation to any commercial transactions in Securities.
2 – Manage the risks relating to its activity and operations with the highest degree of professionalism.
3 – Give priority to the public interest and the interest of those dealing with it over the interests of the company.
4 – Manage its services in accordance with the special rules approved by the Authority.
5 – Maintain the confidentiality of all information and data in its possession, except what is requested by the Authority or the judicial authorities.
6 – Provide its services in accordance with the latest technologies, applications and automated systems, in line with the international standards approved by the Authority, or as requested or decided by the Authority.

Article 52

The Clearing Agency shall promptly notify the Authority of the following:
1 – If it becomes apparent to it that any of those dealing with it is unable to comply with any of the rules relating to clearing, settlement or depository operations.
2 – If it considers that the financial position of any of those dealing with it, and his ability to meet his obligations, have begun to signal instability, or that his ability to meet his obligations has become unstable.

Article 53

The Authority shall request the Clearing Agency to prepare rules and regulations relating to clearing, settlement and registration of Securities operations and the other activities related to the business of the Agency, or to amend them, within a specified period. If the Clearing Agency does not comply with the request or with the period specified for it therein, the Authority may, on its behalf, prepare or amend those rules, and the Agency shall bear the costs.
* Replaced by Law No. 22 of 2015 (Kuwait Al-Youm, Issue No. 1235, 10 May 2015).

Article 54

No rules issued by the Clearing Agency, nor any amendment thereto, whether by withdrawing, replacing, changing or adding to them, shall take effect unless approved by the Authority. The Clearing Agency shall submit to the Authority the reasons and objectives that led it to propose such rules or their amendment, and shall set out their intended effects. The Authority may, on that basis, decide to approve, not to approve or to amend them, and shall notify the Clearing Agency of its decision in writing within a maximum period of one week from the date of the decision.

Article 55

If any of those dealing with the Clearing Agency fails to comply with the clearing rules, the Clearing Agency may oblige him to pay the fees resulting from his failure to comply with those rules.

Article 56

The Authority may issue instructions to the Clearing Agency to ensure the fair, orderly and appropriate settlement of transactions in Securities, and to ensure the integrity and soundness of comprehensive risk management in the Securities markets. It may in particular issue instructions concerning the settlement of Securities contracts and the making of adjustments to contractual obligations that may arise from Securities contracts, or any other matters the Authority deems necessary for the application of the provisions of this Law.

Article 57

In cases of disasters, crises and disturbances that may create severely harmful effects on the market, the Authority may issue instructions to amend, or suspend the application of, any of the rules of the Clearing Agency.

Article 58

If the Clearing Agency does not comply with the decisions or instructions of the Authority issued under the power vested in it by the preceding Article, the Authority may take any measures it deems necessary to maintain fair settlement and achieve effectiveness of commercial transactions in Securities or in any class thereof.

Article 59

The Authority may, by written notification, cancel the Clearing Agency licence granted to it in accordance with the provisions of this Law, with effect from the day specified in the Authority’s decision, in any of the following cases:
1 – The Agency’s loss of one of the conditions that qualified it to obtain the licence.
2 – If the Agency ceases to perform the tasks entrusted to it or that it is licensed to manage.
3 – Liquidation of the Agency.
4 – Failure to perform any obligation imposed on it by this Law.
5 – Failure to provide the information requested by the Authority, or the provision of incorrect or misleading information.
6 – The Agency’s making of any amendments to its objects in its Memorandum of Incorporation or Articles of Association without obtaining the prior approval of the Authority.
7 – If the Agency requests the cancellation of the licence granted to it.
The Authority shall publish the decision cancelling the licence, and the reasons for it, in the Official Gazette.

Article 60

The Authority may grant the Clearing Agency a specified period, or extend the period after the date of cancellation of the licence, if the Authority considers this to be in the public interest, or at the request of the Agency, in order to stop its operations or to hand over its activities to another licensed agency.

Article 61

The Agency may submit a grievance to the Authority against the decision cancelling its licence within fifteen days from the date of its being notified of it in writing or from the date of its publication in the Official Gazette. The Authority shall decide on the grievance by a reasoned decision within twenty days from the date of its submission.

Article 62

Where any person becomes subject to the provisions of insolvency, bankruptcy or liquidation, or where a judicial receiver is appointed over his property, the clearing and settlement procedures of the Clearing Agency shall have priority over any ordinary procedures or debts.

Chapter Five
Regulated Securities Activities

Article 63

No Person may carry on any of the businesses set out below except after obtaining a licence from the Authority specifying the licensed activity or activities:
1 – Broker or his representative.
2 – Investment Advisor or his representative.
3 – Investment Controller.
4 – Investment Portfolio Manager.
5 – Collective Investment Scheme manager.
6 – Custodian.
7 – Market Maker.
8 – Credit Rating Agency.
9 – Any person who works or participates in another activity that the Authority considers to be a regulated Securities activity for the purposes of this Law.
A single corporate entity may be licensed to carry on two or more of these activities. The Executive Regulations shall determine the conditions and controls for granting these licences, the standards for practising the activity, and the systems relating thereto.
* Replaced by Law No. 22 of 2015 (Kuwait Al-Youm, Issue No. 1235, 10 May 2015).

Article 64

No Person may act as a representative of a Licensed Person, or claim to do so, except after the approval of the Authority and its licensing of him.

Article 65

The Authority may request Licensed Persons in Securities activities to submit periodic reports to it on all their business, including an annual report on the audited financial statements.
All their records shall be subject to examination and audit by the Authority, and it may take copies of these records or request any of them to submit copies thereof.

Article 66

A person licensed to work in the management of Securities activities shall comply with the controls determined by the Executive Regulations, and in particular the following:
1 – Separate the commercial dealing in his Securities from all other commercial business.
2 – Maintain sufficient capital.
3 – Not divert the funds or Securities of clients to his own use, nor mismanage them.
4 – Not resort to a high degree of credit for the purpose of acquiring or holding Securities.
5 – Have reasonable grounds for believing that the Securities he recommends to a client are suitable for that client.
6 – Not make promises to a client of a specific return or any guarantee against loss, unless the nature of the Security so requires.
7 – Seek to achieve the best performance in the interest of the client.
8 – Not charge high commissions or offer high discounts in transactions.
9 – Not engage in excessive buying or selling transactions in a client’s account.
10 – Provide clients with the documents and statements of account relating to their transactions.
11 – Prepare and maintain regular books and records.
12 – Appoint one of his managers to be responsible for applying the legal obligations.
13 – Have written supervisory regulations, and systems and rules to control the work, including procedures to prevent misuse of Inside Information and procedures to detect and prevent money laundering operations.
* Replaced by Law No. 22 of 2015 (Kuwait Al-Youm, Issue No. 1235, 10 May 2015).

Article 67

The Authority may refuse, suspend or revoke the licence of, or restrict the activity of, any Person licensed to engage in the management of Securities activities, or any Related Person affiliated with it, if it is established to the Authority that such Person has committed any of the following:
1 – Committing a gross error, giving misleading information, or omitting to mention a material fact when submitting its licence application, or omitting to mention any other information that is required to be submitted to the Authority.
2 – Failing to meet the standards applied under the provisions of this Chapter or any system or regulation issued pursuant thereto.
3 – Violating any provision, rule, system or regulation issued under this Law, or under any other law relating to its activity, or any Securities law, rule or regulation of another country.
4 – Negligence in supervising any of its subordinates by failing to prevent them from anything that would violate the provisions of this Law or its Executive Regulations.
* Replaced by Law No. 22 of 2015 (Kuwait Al-Youm, Issue No. 1235, 10 May 2015).

Chapter Six
Review of the Accounts of Licensed Persons

Article 68

Every Licensed Person shall organise and keep books, records and accounts that reflect, in detail and accurately, the transactions or transfers of ownership of the assets of such Person, in accordance with the accounting standards approved by the Authority.
The Licensed Person shall keep such books, records and accounts for a period of not less than five years from the date of their preparation, or until the settlement of any existing dispute between the Licensed Person and the client, provided that during that period they remain available for inspection upon request, and remain subject at all times to examination and audit by the Authority or by whomever it appoints for that purpose.
* Replaced by Law No. 22 of 2015 (Kuwait Al-Youm, Issue No. 1235, 10 May 2015).

Article 69

Every Licensed Person shall use an internal control system [to ensure] compliance with the following:
1 – Executing transactions in accordance with a general or specific authorisation from the competent management.
2 – Freedom to dispose of assets under a general or specific authorisation from the competent management.
3 – Comparing the recorded assets at appropriate intervals and taking the necessary action regarding any material changes.
4 – Recording transactions in a manner that allows the preparation of financial statements consistent with the standards adopted by the Authority, or upon auditing the recorded assets of the company.
* Completed from the context.

Article 70

Every Licensed Person shall, within one month of obtaining the licence, appoint an auditor approved by the Authority, provided that such auditor is not a director, officer, employee, shareholder or partner of the Licensed Person.
The Licensed Person shall notify the Authority thereof within seven days of the appointment, and shall also notify it within the same period in the event of the auditor’s resignation or replacement.

Chapter Seven
Acquisitions and Protection of Minority Rights

Article 71

An Acquisition Offer means the offer, attempt or request to acquire ownership of:
1 – All the shares of a Listed Company, or all the shares of any class or classes within a Listed Company, other than the shares owned by the offeror and the parties affiliated with or allied to it on the date of submitting the offer.
2 – All the remaining shares in the offeree company, which are offered to all the other shareholders in that company as a result of the offeror and the parties affiliated with and allied to it holding a majority percentage in the company that enables it to control the Board of Directors.
The Authority shall issue a decision specifying the majority percentage required for applying the provision of this Article.

Article 72

A Person who wishes to submit an Acquisition Offer shall submit a copy of the offer documents, accompanied by the basic data and information, to each of the Authority, the Exchange and the Issuer of the Securities that are the subject of the Acquisition Offer. The offeror shall obtain the approval of the Authority before proceeding with the Acquisition Offer procedures.
The Authority may, within a maximum period of ten working days, review the statement and the offer documents and issue its approval. The Authority shall refrain from issuing its approval in the following cases:
1 – The offer is not consistent with the provisions of this Law and the Executive Regulations.
2 – The offer is not accompanied by the required filing fees.
3 – The offeror fails to submit the data required under the provisions of this Law or its Executive Regulations.
4 – The offer contains an incorrect statement or is incomplete, and this would affect the decision of the shareholders.

Article 73

The Authority shall include in the Executive Regulations the rules governing the acquisition by any Person of ownership of a percentage of not less than 5% and not more than 30% of the shares of any company listed on the Exchange.
Any of the shareholders referred to in the preceding paragraph may object to the resolutions of the general assemblies if such resolutions would harm the rights of the minority, and shall have the right to file a grievance with the Board of Commissioners within fifteen days from the date of issue of the resolution objected to or of his knowledge thereof, whichever is later. The Authority may annul the resolution of the general assembly if the harm is established, and any person having an interest may challenge the decision of the Authority before the Competent Court in accordance with the procedures specified by this Law and its Executive Regulations.
If the Authority does not respond to the grievance within twenty days, this shall be deemed a rejection thereof.

Article 74

A Person shall, within thirty days of obtaining, directly or indirectly, ownership of more than 30% of the traded Securities of a listed shareholding company, promptly submit an offer to purchase all the remaining traded shares, in accordance with the conditions and controls specified by the Executive Regulations.
The following cases shall be exempted from this provision:
1 – Acquisition in consideration of the public interest and the interest of the remaining shareholders; the Authority shall issue the exemption decision in writing and with reasons.
2 – Obtaining the said percentage as a result of an increase in the company’s capital and some shareholders refraining from subscribing.
3 – Obtaining the said percentage as a result of debt capitalisation.
4 – Obtaining the said percentage as a result of inheritance, a will or a court judgment; in such case, the Person shall regularise its position within a period not exceeding two years from the devolution of such increase.
5 – Other cases determined by the instructions and rules issued by the Authority.
* Replaced by Law No. 22 of 2015 (Kuwait Al-Youm, Issue No. 1235, 10 May 2015).

Article 75

The Issuer whose Securities are subject to acquisition shall, within seven working days of receiving the offer, submit to the Authority a response stating its opinion and its recommendation to the shareholders.
* Replaced by Law No. 22 of 2015 (Kuwait Al-Youm, Issue No. 1235, 10 May 2015).

Chapter Eight
Collective Investment Schemes

Article 76

A Collective Investment Scheme means any of the following forms:
1 – An investment fund that has legal personality.
2 – A contractual collective investment scheme relating to movable or immovable assets, the purpose of which is to enable the persons participating in the scheme to participate in, or obtain, the profits that may arise from the holding, ownership, management or disposal of such assets.
3 – Whatever the Authority decides falls within a Collective Investment Scheme.
The Authority shall set the rules regulating Collective Investment Schemes, subject to the provisions of this Chapter.
* Replaced by Law No. 22 of 2015 (Kuwait Al-Youm, Issue No. 1235, 10 May 2015).

Article 77

The Securities or units of a Collective Investment Scheme may not be managed or sold unless the Scheme is licensed by the Authority in accordance with the rules, regulations and systems issued by it, and unless they are approved by the Authority and published to the public in the Official Gazette.
* Replaced by Law No. 22 of 2015 (Kuwait Al-Youm, Issue No. 1235, 10 May 2015).

Article 78

The Executive Regulations shall specify the requirements necessary for establishing and managing Collective Investment Schemes, their approved forms, and the functions required in them and their responsibilities. The Authority shall issue the rules and systems relating to the issuance and redemption of investment units in such Schemes, and the controls for their pricing.
* Replaced by Law No. 22 of 2015 (Kuwait Al-Youm, Issue No. 1235, 10 May 2015).

Article 79

Participants shall have the right to redeem their units in a Collective Investment Scheme in accordance with the articles of association or the contract.
* Replaced by Law No. 22 of 2015 (Kuwait Al-Youm, Issue No. 1235, 10 May 2015).

Article 80

An investment fund whose establishment has been licensed by the Authority may be listed on the Exchange.
Investment funds established outside the State of Kuwait, which are licensed by the Authority to market their units in the State of Kuwait, may apply for listing on the Exchange, in accordance with the conditions and controls specified by the regulations and rules of the Exchange.
* Replaced by Law No. 22 of 2015 (Kuwait Al-Youm, Issue No. 1235, 10 May 2015).

Article 81

Every Person acting as an advisor to a Collective Investment Scheme shall comply with the following:
1 – To be licensed by the Authority to act as an Investment Advisor.
2 – To act in accordance with the regulations and procedures governing Collective Investment Schemes, and in a manner aimed at achieving the interests of the unit holders.
3 – To exercise the care of a person who is prudent with his own funds when providing investment advice.
4 – To keep regular books and records in accordance with the accounting systems in respect of Collective Investment Schemes, and to submit periodic reports to the Authority as it requests from him, in accordance with the regulations issued by it.

Article 82

Collective Investment Schemes are prohibited from doing any of the following:
1 – Granting credit.
2 – Purchasing any Security issued by the company managing the Scheme or by any of its subsidiaries, except within the limits of the rules established by the Authority in this regard.
3 – Purchasing any Security of an entity for which the Scheme’s manager is the subscription manager or selling agent, except within the limits of the rules established by the Authority in this regard.

Article 83

The manager or Custodian of a Collective Investment Scheme may not be replaced except after the approval of the Authority thereof. The Authority shall notify the applicant of its reasoned decision within thirty days from the date of its receipt of the application. The Executive Regulations shall specify the procedures necessary for this.
* Replaced by Law No. 22 of 2015 (Kuwait Al-Youm, Issue No. 1235, 10 May 2015).

Article 84

The manager of a Collective Investment Scheme may not make any amendments to the contract or the articles of association except after the approval of the Authority of such amendments.
The Authority may, if it finds in the proposed amendments anything that affects the acquired rights of the unit holders, require the Scheme manager to obtain the approval of more than (50%) of the unit holders for such amendments.
* Replaced by Law No. 22 of 2015 (Kuwait Al-Youm, Issue No. 1235, 10 May 2015).

Article 85

The Authority may revoke the licence of any Collective Investment Scheme in any of the following cases:
1 – If it becomes apparent that any of the conditions for granting the licence has not been met.
2 – If doing so protects the interests of the participants in the Scheme.
3 – If the manager, the Investment Controller or the Custodian violates any of the provisions of the Law or the regulations, or submits to the Authority incorrect, inaccurate or misleading information.
4 – If the Scheme manager requests the revocation of the licence; the Authority may reject the request if it finds it necessary to investigate a matter relating to the Scheme or to the interests of the participants.
* Replaced by Law No. 22 of 2015 (Kuwait Al-Youm, Issue No. 1235, 10 May 2015).

Article 86

The Authority may notify the manager, the Investment Controller or the Custodian of a Collective Investment Scheme in writing of its intention to revoke the Scheme’s licence and of the reasons that led it to do so. The manager or the Custodian shall, within fifteen days from the date of being notified, submit an undertaking acceptable to the Authority in order to avoid the revocation of the Scheme’s licence.
* Replaced by Law No. 22 of 2015 (Kuwait Al-Youm, Issue No. 1235, 10 May 2015).

Article 87

If the Authority issues a decision revoking the licence of a Collective Investment Scheme, it shall assign a Licensed Person to carry out the liquidation of the Scheme, or request the Competent Court to do so. In such case, it shall notify the manager and the Custodian of the Scheme, immediately and in writing, of the measure it has taken.
The Authority shall specify the rules and procedures for the liquidation of a Collective Investment Scheme.
* Replaced by Law No. 22 of 2015 (Kuwait Al-Youm, Issue No. 1235, 10 May 2015).

Article 88

The Authority may, upon an application submitted to it, permit the marketing of a Collective Investment Scheme established outside the State of Kuwait. The Executive Regulations shall specify the conditions and controls relating to this case.

Article 89

The Authority may revoke the marketing permission of a Collective Investment Scheme established outside the State of Kuwait in any of the following cases:
1 – If it becomes apparent that any of the conditions for granting the permission has not been met.
2 – If doing so protects the interests of the participants in the Scheme.
3 – If the manager, the Investment Controller or the Custodian violates any of the provisions of the Law or the Executive Regulations, or submits to the Authority incorrect, inaccurate or misleading information.
* Replaced by Law No. 22 of 2015 (Kuwait Al-Youm, Issue No. 1235, 10 May 2015).

Article 90

If it becomes apparent to the Authority that the manager, the Investment Controller or the Custodian of a Collective Investment Scheme has not complied with the provisions of this Law or the regulations issued in implementation thereof, the Authority may instruct the Scheme manager to suspend temporarily the redemption or subscription, or both, of units of the Collective Investment Scheme on the date specified in such instructions.
* Replaced by Law No. 22 of 2015 (Kuwait Al-Youm, Issue No. 1235, 10 May 2015).

Article 91

The aggrieved party may file a grievance with the Authority against the decisions issued in implementation of the provisions of this Chapter within fifteen days from the date of being notified thereof in writing. The rules and procedures set out in this Law and its Executive Regulations shall apply to the grievance.

Chapter Nine
Prospectus for Securities Issued by Companies

Article 92

The provisions of this Chapter shall apply to Securities issued by companies, whatever the form of such Securities and whatever their purpose.

Article 93

No Person may offer Securities for public or private subscription unless a Prospectus is submitted for such subscription that conforms to the data and procedures set out in the Executive Regulations and is approved by the Authority.
Foreign Securities may not be offered or issued for public or private subscription, or promoted or marketed, except under a licence from the Authority.
The Executive Regulations shall specify any exemptions decided by the Authority from the application of the provisions of this Article.
* Replaced by Law No. 22 of 2015 (Kuwait Al-Youm, Issue No. 1235, 10 May 2015).

Article 94

The Prospectus shall become effective after thirty days from the date of its submission to the Authority complete with the required documents, information and data, unless the Authority announces its approval or rejection in writing before that date. The said review period may be extended with the consent of the Issuer of the Securities.
The Issuer shall make the Prospectus available to the public free of charge and at a clear address in the State of Kuwait.

Article 95

The Authority may reject the Prospectus in any of the following cases:
1 – The Prospectus is not consistent with the provisions of this Law and the Executive Regulations.
2 – The Prospectus is submitted without being accompanied by evidence of payment of the prescribed fee.
3 – The Issuer fails to submit the financial statements required under this Law or any rule or regulation issued thereunder.
4 – The Prospectus contains an incorrect or incomplete statement that would affect the decision of the subscriber.

Article 96

The Prospectus for subscription to the shares of a company upon its incorporation shall include disclosure of the data provided for in the aforementioned Commercial Companies Law, in addition to the data specified by the Executive Regulations of this Law. The following data shall also be disclosed:
a – The company’s track record.
b – The names of the members of the Board of Directors and of the responsible managers, and their experience.
c – The names of the holders of registered shares each of whom owns more than 5% of the company’s shares, and the percentage owned by each.
d – A summary of the financial statements and data approved by the auditors for the preceding three years, or for the period following the incorporation of the company, whichever is shorter, in accordance with the disclosure rules set out in the Executive Regulations of this Law and the forms established by the Authority.
* Replaced by Law No. 22 of 2015 (Kuwait Al-Youm, Issue No. 1235, 10 May 2015).

Article 97

Companies listed on the Exchange shall disclose their financial statements in accordance with the regulations issued by the Exchange and approved by the Authority.

Article 98

The Authority may oblige the Exchange to take all measures that would expedite the disclosure by the companies whose Securities are listed on it of any material changes that may occur in any of such companies.

Article 99

The public shall be permitted, against fees determined by the Authority, to inspect at the Exchange, or obtain copies of, the prospectuses, periodic reports, information and data deposited with the Exchange that have been announced or disclosed.

Chapter Ten
Disclosure of Interests

Article 100

An Interested Person means any person who has an interest representing five per cent (5%) or more of the capital of a company listed on the Exchange, whether directly, indirectly or in alliance with others.
The instructions and rules issued by the Authority shall regulate what is meant by an Interested Person, whether directly or indirectly; they shall also specify the Interested Person where one or more persons act as a group that may be deemed a beneficial owner, or where one or more persons act in alliance with others; they shall also specify the other interests that are to be disclosed, and shall set out the procedures relating to the manner and timing of disclosure.
* Replaced by Law No. 22 of 2015 (Kuwait Al-Youm, Issue No. 1235, 10 May 2015).

Article 101

An Interested Person shall – within a period not exceeding five working days from the interest arising – send an authenticated statement signed by him to the Authority, to the Exchange on which the Securities are traded and to the Issuer of the Securities, provided that the statement contains the information specified by the instructions and rules issued by the Authority.
Shareholding companies listed on the Exchange shall also disclose the names of their shareholders whose shareholding represents (5%) or more of their capital, or any change in such percentage; and the instructions and rules issued by the Authority shall specify the procedures and timing of disclosure.
* Replaced by Law No. 22 of 2015 (Kuwait Al-Youm, Issue No. 1235, 10 May 2015).

Article 102

The Authority and the Exchange on which the Securities are traded shall be notified of any change in the interest – subject of disclosure – exceeding one half of one per cent of the Issuer’s capital, within a period not exceeding ten working days from the date of the change. Such notification shall remain mandatory where the change results in the interest falling below five per cent of the capital.
* Replaced by Law No. 22 of 2015 (Kuwait Al-Youm, Issue No. 1235, 10 May 2015).

Article 103

The Authority shall lay down the instructions and rules regulating disclosure and Dealing in Securities with regard to Insiders, as well as members of the Board of Directors and members of the executive management of companies.
* Replaced by Law No. 22 of 2015 (Kuwait Al-Youm, Issue No. 1235, 10 May 2015).

Article 104

The Authority shall lay down the instructions and rules regulating the disclosure of material information by listed companies.
* Replaced by Law No. 22 of 2015 (Kuwait Al-Youm, Issue No. 1235, 10 May 2015).

Article 105

Every listed shareholding company shall maintain a special register for the disclosures of members of the boards of directors, the executive management and managers, containing all the data and information determined by the Authority; it shall also contain all data relating to remunerations, salaries, incentives and other financial benefits, which shall be included in the reports of the General Assembly. Persons concerned shall have the right to inspect this register during normal working hours.

Article 106

The Exchange – on which the Security is listed – shall announce the information it has received concerning disclosures immediately upon receiving the information, in the form specified by the rules and instructions laid down by the Authority.
* Replaced by Law No. 22 of 2015 (Kuwait Al-Youm, Issue No. 1235, 10 May 2015).

Article 107

A person under the obligation of disclosure shall bear liability for any damage sustained by the Authority, the Exchange or third parties as a result of their failure to disclose their interests in accordance with the provisions of this Law and the rules and instructions laid down by the Authority.
* Replaced by Law No. 22 of 2015 (Kuwait Al-Youm, Issue No. 1235, 10 May 2015).

Chapter Eleven
Penalties and Disciplinary Sanctions

First: Jurisdiction and Procedures

Article 108

A court called the Capital Markets Court shall be established within the Court of First Instance; its seat shall be determined by a decision of the Minister of Justice with the approval of the Supreme Judicial Council. This Court shall consist of the following:
1 – Criminal circuits having exclusive jurisdiction to decide criminal actions relating to the offences provided for in this Law. The Felonies Circuit shall be composed of three judges, one of whom shall be of the rank of Court Vice-President at least, and the Misdemeanours Circuit shall be composed of one judge of the first grade at least. The rules and procedures prescribed in the Code of Criminal Procedure and Trials shall be followed in initiating and bringing the criminal action before those circuits, in respect of matters for which no special provision is made in this Law.
2 – Non-criminal circuits having exclusive jurisdiction to decide non-criminal actions relating to commercial, civil and administrative disputes arising from the application of the provisions of this Law and the rules and regulations relating to the securities market, and substantive enforcement disputes relating to the judgments issued by them, whatever the value of such disputes. These circuits shall be composed of three judges, one of whom shall be of the rank of Court Vice-President at least.
3 – One or more judges delegated by the Court of First Instance to rule on an interim basis, without prejudice to the merits of the right, in urgent matters which it is feared may be prejudiced by the lapse of time and which fall within the jurisdiction of this Court, as well as interim enforcement disputes and the issuance of orders on petitions, interim orders and orders for payment relating thereto.
The Code of Civil and Commercial Procedure and its complementary laws shall apply to non-criminal actions brought in accordance with the provisions of this Law, in respect of matters for which no special provision is made therein.
* Clauses (1) and (2) amended by Decree-Law No. 71 of 2026 (Kuwait Al-Youm, Issue No. 1798, 5 July 2026).
* To be repealed as of 1 October 2027 by Decree-Law No. 91 of 2026.

Article 109

Judicial papers and summonses to appear issued by the investigator or by the court shall be served on the accused through the competent representatives of the Capital Markets Authority, in accordance with the rules prescribed in Chapter Two of Part One of the Code of Criminal Procedure and Trials. He may also be served at his place of work by delivering the copy there to whoever states that he is in charge of managing that place or is employed there.
Such papers and summonses to appear may be served on persons other than the accused by fax or e-mail.
The Executive Regulations shall regulate the manner of service by this means.
* To be repealed as of 1 October 2027 by Decree-Law No. 91 of 2026.

Article 110

As an exception to the rules on the service of judicial papers provided for in the Code of Civil and Commercial Procedure, judicial papers relating to the civil, commercial and administrative disputes provided for in this Law may be served by fax and e-mail.
The Minister of Justice – in coordination with the Ministry of Communications and the Authority – shall issue a decision setting out the conditions and controls for regulating the service procedures, the type of devices and software used in effecting such service, the forms and format of summonses to appear and notifications and of the replies thereto, and the method of paying the judicial fees prescribed for them. Violation of the provisions of this Article shall result in nullity.
* Replaced by Law No. 22 of 2015 (Kuwait Al-Youm, Issue No. 1235, 10 May 2015).
* To be repealed as of 1 October 2027 by Decree-Law No. 91 of 2026.

Article 111

As an exception to Articles (49), (59) and (91) of the Code of Civil and Commercial Procedure, the following shall be observed:
1 – Judgment shall – at the request of the defendant – be rendered deeming the action as if it had never been filed, if the defendant has not been summoned to appear within thirty days from the date of filing the statement of claim with the Clerks’ Department and this is attributable to an act of the plaintiff.
2 – If neither the plaintiff nor the defendant attends the first session or any other session, the court shall decide the action, failing which it shall order it struck off the roll, after verifying the validity of service; and the court shall order the action struck off if both parties attend and agree to strike it off. If the plaintiff or the appellant fails to attend for the second time, the court shall, instead of striking off the action, deem it as if it had never been filed. If the absent litigant attends before the end of the session, the striking off shall be deemed as if it had not occurred.
The court shall rule that the action be deemed as if it had never been filed if both parties fail to attend after it has been resumed, or if neither litigant serves notice on the other of the resumption of the action within thirty days from its being struck off; the period of striking off, if repeated, shall be included in the calculation of this time limit even if not consecutive. The time limit shall not be deemed to have been observed unless the notice reaches the litigant before its expiry.
3 – The action may be stayed by agreement of the litigants not to proceed with it for a period not exceeding two months from the date on which the court approves their agreement, and such stay shall have no effect on any mandatory time limit that the law may have set for taking a procedural step.
If none of the litigants serves notice of the resumption of the action within the fifteen days following the end of the period – whatever the duration of the stay – the plaintiff shall be deemed to have abandoned his action and the appellant to have abandoned his appeal.
* To be repealed as of 1 October 2027 by Decree-Law No. 91 of 2026.

Article 112

There shall be formed at the Court of Appeal a criminal circuit and a non-criminal circuit or more, specialised in hearing appeals against judgments issued by the Capital Markets Court; their judgments shall be final and may not be challenged by any means of challenge.
The appellate circuits at the Court of Appeal and at the Court of First Instance shall continue to hear the appeals brought before them against judgments issued in cases that have come within the jurisdiction of the Capital Markets Court, or those brought before them after this Law comes into force, until a final judgment is issued on their merits.
* To be repealed as of 1 October 2027 by Decree-Law No. 91 of 2026.

Article 113

When judgments are challenged by opposition or appeal, the President of the Competent Court shall set a session for hearing the challenge, which shall be recorded on its petition at the time of filing; this shall be deemed notice of the session to the challenging party, even if the challenge is filed by his legal representative. The Clerks’ Department shall serve the petition on the other litigants by fax through the Authority.
* To be repealed as of 1 October 2027 by Decree-Law No. 91 of 2026.

Article 114

A special prosecution called the Capital Markets Prosecution shall be established, having exclusive jurisdiction to investigate, dispose of and prosecute the offences that fall within the jurisdiction of the Capital Markets Court, and to challenge the judgments issued therein.

Article 115

The Authority and the Exchange management shall each execute the orders of the investigating authorities and of the court, and assist them in searching for evidence relating to offences arising from the application of the provisions of this Law.

Article 116

The non-criminal circuits of the Court of First Instance shall, of their own motion, refer the actions pending before them which have come within the jurisdiction of the Capital Markets Court by virtue of the provisions of this Law to the latter, in the state in which they stand. Where one of the litigants is absent, the Clerks’ Department shall serve notice of the referral on him together with a summons to appear, within the set time limits, before the circuits to which the action has been referred.
The provisions of the preceding paragraph shall not apply to actions in which judgment has been rendered on part of their merits, actions in which an interlocutory judgment has been issued disposing of part of the dispute, and actions in which a decision has been issued adjourning them for the pronouncement of judgment, even with permission to submit memoranda.
The criminal courts shall continue to hear the cases pending before them on the date this Law comes into force concerning offences that have come within the jurisdiction of the Capital Markets Court.
* To be repealed as of 1 October 2027 by Decree-Law No. 91 of 2026.

Second: Crimes and Penalties

Article 117

Without prejudice to the measures prescribed in this Law or to any more severe penalty provided for in another law, the acts criminalised under this Law shall be punishable by the penalties provided for in the following Articles.

Article 118

Any Insider who sells or purchases a Security while in possession of Inside Information about it, or discloses Inside Information, or gives advice to another person on the basis of Inside Information, shall be punishable by imprisonment for a term not exceeding five years and a fine of not less than the value of the benefit obtained or the losses avoided or the amount of ten thousand Kuwaiti Dinars – whichever is higher – and not exceeding three times the value of the benefit obtained or the losses avoided or the amount of one hundred thousand Kuwaiti Dinars – whichever is higher – or by either of these two penalties.
Any person who purchases or sells a Security on the basis of Inside Information obtained from an Insider, with knowledge of the nature of that information, for the purpose of obtaining any benefit for himself or for others, shall be punishable by the same penalties.
* Replaced by Law No. 22 of 2015 (Kuwait Al-Youm, Issue No. 1235, 10 May 2015).

Article 119

Any person subject to the provisions of this Law who discloses a secret that came to his knowledge by virtue of the nature of his work, employment or position shall be punishable by imprisonment for a term not exceeding one year and a fine of not less than three thousand Kuwaiti Dinars and not exceeding ten thousand Kuwaiti Dinars, or by either of these two penalties.
The penalty shall be imprisonment for a term not exceeding three years and a fine of not less than ten thousand Kuwaiti Dinars and not exceeding one hundred thousand Kuwaiti Dinars, or either of these two penalties, if it is proved that he obtained, in any manner whatsoever, a benefit, interest or consideration for himself or for others in return for disclosing the secret or the information.
* Replaced by Law No. 22 of 2015 (Kuwait Al-Youm, Issue No. 1235, 10 May 2015).

Article 120

Any person who omits, withholds or prevents information having a material effect – which the law or the regulations require to be given or disclosed to the Authority and the Exchange – concerning the purchase or sale of a Security or concerning a recommendation to purchase or sell a Security, shall be punishable by a fine of not less than ten thousand Kuwaiti Dinars and not exceeding one hundred thousand Kuwaiti Dinars.
* Replaced by Law No. 22 of 2015 (Kuwait Al-Youm, Issue No. 1235, 10 May 2015).

Article 121

Any person who violates any of the provisions of Chapter Ten concerning the disclosure of interests shall be punishable by a fine of not less than one thousand Kuwaiti Dinars and not exceeding one hundred thousand Kuwaiti Dinars.

Article 122

Any person proved to have intentionally committed one of the following acts shall be punishable by imprisonment for a term not exceeding five years and a fine of not less than ten thousand Kuwaiti Dinars and not exceeding one hundred thousand Kuwaiti Dinars, or by either of these two penalties:
1 – Acting in a manner that creates a false or misleading appearance and impression concerning the actual trading in a Security or in the securities market, by:
a – Entering into a transaction in a manner that does not result in an actual change in the ownership of the Security.
b – Entering an order to purchase or sell a Security, knowing that an order of similar size, price and time of sale or purchase for that Security has been or will be placed by the same person or by persons acting in agreement with that person.
2 – Concluding one or more transactions in a Security that would:
a – Raise the price of that Security of the same Issuer, with the aim of inducing others to purchase it.
b – Lower the price of that Security of the same Issuer, with the aim of inducing others to sell it.
c – Create actual or fictitious trading with the aim of inducing others to purchase or sell.
The Authority shall lay down the rules indicating the cases in which the acts provided for in Clauses (1/a) and (2/c) occur, and those rules shall specify the legitimate practices exempted from the application of the provision of this Article.
* Replaced by Law No. 22 of 2015 (Kuwait Al-Youm, Issue No. 1235, 10 May 2015).

Article 123

Any person who violates any provision of Chapter Seven of this Law concerning acquisition and the protection of minority rights shall be punishable by a fine of not less than five thousand Kuwaiti Dinars and not exceeding one thousand Kuwaiti Dinars, or 20% of the value of the shares involved in the violation at the time of the occurrence, whichever is higher.
* As published in the Official Gazette (“not exceeding one thousand Kuwaiti Dinars”); the Capital Markets Authority’s translation reads “one hundred thousand Kuwaiti Dinars”.

Article 124

Any person proved to have an [undisclosed] interest who has publicly encouraged or recommended the purchase or sale of a particular Security shall be punishable by imprisonment for a term not exceeding five years and a fine of not less than the amount of five thousand Kuwaiti Dinars and not exceeding the amount of fifty thousand Kuwaiti Dinars, or by either of these two penalties. An undisclosed interest means any hidden commission, return, grant or gift from an Issuer, broker, trader, adviser or subscription, relating to the Security.
* Completed from the context.

Article 125

Any person who claims – contrary to the truth – that the Authority has taken any action or decision that it has not in fact taken shall be punishable by a fine of not less than five thousand Kuwaiti Dinars and not exceeding fifty thousand Kuwaiti Dinars.
* Replaced by Law No. 22 of 2015 (Kuwait Al-Youm, Issue No. 1235, 10 May 2015).

Article 126

Any person who does any of the following shall be punishable by a fine of not less than five thousand Kuwaiti Dinars and not exceeding fifty thousand Kuwaiti Dinars:
1 – Practises a particular activity or profession without obtaining the licences from the Authority in accordance with the provisions of this Law.
2 – Makes any public offering or any other transaction in violation of the provisions of this Law or its Executive Regulations.
3 – Intentionally refrains from or delays submitting to the Authority any periodic report or document that this Law requires to be submitted.
Judgment may also be rendered depriving him, for a temporary period, of practising any activity that he has practised without a licence, or depriving him of entering into any transaction or deal that the law requires to be registered.

Article 127

Any person who commits an act that would obstruct investigations or any supervisory activity of the Authority or its employees shall be punishable by a fine of not less than five thousand Kuwaiti Dinars and not exceeding fifty thousand Kuwaiti Dinars. The following acts shall be deemed acts obstructing the work of the Authority:
1 – Failing to enable the employees of the Authority to inspect any data or information which the Authority considers it important to inspect.
2 – Failing to comply with any final decision issued by the Disciplinary Board of the Authority.
3 – Providing the Authority with incorrect or misleading data.
* Replaced by Law No. 22 of 2015 (Kuwait Al-Youm, Issue No. 1235, 10 May 2015).

Article 128

In all cases, the offender shall, in addition to the principal penalty, be sentenced to repay the value of the financial benefit he obtained or the value of the losses avoided as a result of his committing an act in violation of the provisions of this Law.

Article 129

The court may issue an order against any person convicted of any of the offences provided for in this Law, depriving him temporarily or permanently of working as a member of the board of directors, managing director or chief executive officer of a shareholding company, or of practising his profession or any similar profession. Deprivation shall be mandatory in the event of recidivism.
* Replaced by Law No. 22 of 2015 (Kuwait Al-Youm, Issue No. 1235, 10 May 2015).

Article 130

The Capital Markets Court may go below the minimum of the penalty of imprisonment it imposes for the offences provided for in this regard, without being bound by the provision of the second paragraph of Article (83) of the Penal Code.
It may also order a stay of execution of the judgment in the cases provided for in Article (82) of the Penal Code, whatever the penalty imposed.

Article 131

The Authority may, at any stage of the criminal action and until a final judgment is issued therein, offer or accept settlement with any person who has committed one of the offences provided for in this Law, in return for payment of an amount of not less than the minimum of the prescribed fine and not more than its maximum. Settlement in the offences provided for in Articles (122), (124), (126) and (127) shall be conditional, in addition to payment of the said consideration, on the repayment of the value of any benefit obtained or losses avoided, and on the accused not being a recidivist.
The Authority shall determine the period within which the accused shall fulfil the conditions of settlement in accordance with the foregoing rules, and upon completion of the settlement the criminal action shall lapse.

Article 132

The Attorney General may, by his own decision or at the request of the Authority or the employer, if the interest of the investigation so requires, temporarily suspend from work, employment or the practice of a profession any person whom the Public Prosecution is investigating for one of the offences provided for in this Law. Any person referred to the criminal court shall be suspended from work by operation of law; however, the court may order otherwise during the trial proceedings, at the request of the interested party or of its own motion.

Article 133

The Attorney General may, if sufficient evidence has been gathered against a Person or a group of Persons that he has committed an act criminalised under this Law, or at the request of the Authority or whomever it authorises, order that he be banned from travel and from disposing of and managing his funds, and also take all precautionary measures in this regard, in respect of all or part of the funds in the possession of the accused or of others, without prejudice to the right of the Authority or of any interested party to take all precautionary judicial measures.
The Attorney General may take the same measures in respect of the funds of the minor children or the spouse of the accused.
A grievance against this decision may be filed before the Competent Court within twenty days from the date of its issuance.

Article 134

The Attorney General shall take a decision on the request of the Authority provided for in the preceding Article within twenty-four hours from the time of its submission, and if the request is rejected, the rejection shall be reasoned. The Authority may file a grievance before the Competent Court within fifteen days from the Attorney General’s decision. The court shall decide on this grievance promptly.

Article 135

The value of the funds placed under precautionary attachment may not exceed the value of the maximum financial penalty that may be imposed on the accused, and the Attorney General or the court may seek the assistance of the Authority in assessing the value of the benefit obtained by the accused.

Article 136

The Attorney General or the court may, at the request of the Authority or of any interested party, lift the precautionary measures if the accused provides sufficient guarantees acceptable to the Authority or the court.

Article 137

Where the accused is banned from managing his funds, the Attorney General shall appoint a manager to manage the funds covered by the ban, upon nomination by the Authority, which shall, by a statement issued by it, determine the duties, powers and rules of work of such manager.

Third: Violations and Discipline

Article 138

The filing of a report, the Public Prosecution’s commencement of the investigation and the filing of the criminal action shall not prejudice the right of the Authority to pursue disciplinary accountability, and the Disciplinary Board may defer deciding on the disciplinary accountability until the criminal action is decided. In all cases, the criminal judgment shall be binding on all.

Article 139

Any act that contravenes the provisions of this Law or any rule, regulation, decision or instructions issued by the Authority within the framework of this Law shall be deemed a violation.
* Replaced by Law No. 22 of 2015 (Kuwait Al-Youm, Issue No. 1235, 10 May 2015).

Article 140

One or more Disciplinary Boards shall be established within the Authority, each composed of three members, chaired by a judge seconded by the Supreme Judicial Council, and two members with experience in financial, economic and legal affairs. The term of membership of the Disciplinary Board shall be three years, renewable.
The Disciplinary Board shall consider the following matters:
1 – Deciding on disciplinary accountability cases referred to it and brought by the Authority relating to violations of the provisions of this Law, the Executive Regulations or any decisions or instructions issued pursuant to it.
2 – Deciding on grievances filed against decisions of the Exchange and of its Violations Committee. When considering grievances against decisions of that committee, the Disciplinary Board of the Authority shall be deemed an appellate body, and its decision thereon shall be final.
The Executive Regulations shall determine the system, rules and procedures of work of the Disciplinary Board and the manner of issuing its decisions and notifying them to the concerned parties.

Article 141

A member of the Disciplinary Board is prohibited, while performing his duties, from having any interest, whether direct or indirect, with any entity subject to the provisions of this Law, or from being an ally of such entity.

Article 142

The Legal Department of the Authority shall undertake the administrative investigation of the violations set out in this Law and its Executive Regulations that are referred to it by the Authority. For the purpose of carrying out the investigation and performing his work, the investigator shall have the following powers:
1 – The right to request any data, documents or records from any government entity or any entity concerned with the activity of the Authority.
2 – The right to hear the testimony of witnesses.
3 – Summoning or requesting the attendance of anyone whose statements he deems it necessary to hear.
4 – The right to visit and examine any register or data held by any government entity or any entity concerned with the activity of the Authority.

Article 143

If the investigations reveal evidence that the violation has been committed, the Authority may refer the violator to the Disciplinary Board in accordance with the rules and procedures determined by the Executive Regulations. The Authority may warn the violator to stop committing the violation and require an undertaking not to repeat it in the future, and may subject him to further supervision.
* Replaced by Law No. 22 of 2015 (Kuwait Al-Youm, Issue No. 1235, 10 May 2015).

Article 144

Any Person who is investigated or who appears before the Disciplinary Board shall have the full right to defend himself, and may appoint a lawyer to defend him.

Article 145

The Person against whom the complaint is made shall be notified of the facts attributed to him and their grounds, and of the date of his investigation session, at least seven working days before the date and time set for the investigation, provided that the Executive Regulations shall determine the method, time limits and procedures of notification.

Article 146

The Disciplinary Board may, after verifying the violation, impose any of the following sanctions:
1 – Warning the violator to stop committing the violation.
2 – Reprimand.
3 – Requiring the violator to retake the qualification examinations.
4 – Suspension from work or from practising the profession for a period not exceeding one year.
5 – Permanent suspension from practising the work or the profession.
6 – Suspension of the licence for a period not exceeding six months.
7 – Revocation of the licence.
8 – Imposing restrictions on the activity or activities of the violator, such restrictions to be determined by the Executive Regulations.
9 – Cancelling the vote, proxy or authorisation obtained in violation of the provisions of this Law.
10 – Suspending or cancelling any Acquisition Offer or purchase transactions outside the scope of the Acquisition Offer if carried out in violation of the provisions of Chapter Seven of this Law or of the Executive Regulations.
11 – Prohibiting, for a period not exceeding three years, the exercise of voting rights by a shareholder who refrained from submitting any statement or submitted a statement that is incomplete or contrary to the truth, the Law or the Executive Regulations.
12 – Suspending the effectiveness of a Prospectus in force under the provisions of this Law.
13 – Suspending trading in a Security for a limited period, or suspending or cancelling a decision to list a Security before it takes effect.
14 – Removing a member of the board of directors or a manager of a licensed company or a listed company, or the Investment Controller or Custodian of a Collective Investment Scheme, who has failed to perform the responsibilities provided for in this Law or the Executive Regulations.
15 – Imposing financial sanctions graded according to the gravity of the violation, up to a maximum of fifty thousand Kuwaiti Dinars.
In all cases, the Disciplinary Board may order the cancellation of the transactions related to the violation and their consequences, or require the violator to pay sums equal to the value of the benefit he obtained or the loss he avoided as a result of committing the violation, and the value may be doubled in the event of repeated violations.
* Replaced by Law No. 22 of 2015 (Kuwait Al-Youm, Issue No. 1235, 10 May 2015).

Article 147

Anyone on whom any of the sanctions provided for in this Law is imposed may file a written grievance against it with the Authority within fifteen days from the date of being notified of the decision in writing. The decision of the Authority rejecting the grievance shall be final and may be challenged before the Competent Court. Failure to respond to the grievance within one month from the date of its submission shall be deemed a rejection of it.

Fourth: Settlement of Disputes by Arbitration

Article 148

Disputes arising from the obligations established in this Law or in any other law, if they relate to capital market transactions, may be settled through arbitration, in accordance with the arbitration rules issued by the Authority.

Chapter Twelve
General Provisions

Article 149

The Authority may exchange information and documents relating to violations in Securities matters between the Authority and similar entities and authorities in other countries, as the Authority deems appropriate in each case individually and as the public interest requires, provided that the principle of reciprocity is applied.
The Authority may sign memoranda of understanding with similar entities and authorities in other countries to coordinate cooperation between them.
The Authority may also conclude agreements with counterpart entities and authorities in other countries, in accordance with the provisions and procedures prescribed by the Constitution.
* Replaced by Law No. 22 of 2015 (Kuwait Al-Youm, Issue No. 1235, 10 May 2015).

Article 150

All data and information relating to the work of the Authority shall be confidential, and may not be disclosed except with the consent of the Authority or by order of a judge.
The data and information of Licensed Persons and of those dealing in the securities market shall also enjoy the protection prescribed for personal and confidential data, and may not be disclosed except in the cases permitted by law or by order of a judge.

Article 150 bis

Without prejudice to the tax exemptions established for profits from the disposal of Securities issued by companies listed on the securities market, the returns on Securities, bonds, financing sukuk and all other similar Securities shall be exempt from tax, whatever their issuer.
* Added by Law No. 22 of 2015 (Kuwait Al-Youm, Issue No. 1235, 10 May 2015).

Chapter Thirteen
Transitional Provisions

Article 151

A decree naming the members of the Board of Commissioners shall be issued within three months from the date of issuance of this Law.

Article 152

The Authority shall issue the Executive Regulations of this Law within six months from the date of issuance of the decree naming the Board of Commissioners, and they shall be published in the Official Gazette.

Article 153

As an exception to the provisions of Article (164), the provisions of Ministerial Resolution No. 2 of 1984 establishing the Arbitration Committee, and the rules and procedures followed before it, shall apply to the settlement by arbitration of disputes arising from the application of this Law, until the Authority issues arbitration rules.

Article 154

Pursuant to the provisions of this Law, the current Kuwait Stock Exchange shall be deemed a licensed securities exchange, and it shall regularise its status in accordance with the provisions of this Law and its Executive Regulations, in particular those relating to the conditions and rules of licensing, within one year from the date of publication of the Executive Regulations in the Official Gazette.
All decisions, instructions and internal rules of the Kuwait Stock Exchange shall remain in force until they are cancelled or amended by the Authority in accordance with the provisions of this Law and its Executive Regulations.

Article 155

The supervisory functions established in this Law shall be transferred to the Authority within six months from the date of publication of the Executive Regulations, whereupon the work of the Kuwait Stock Exchange Committee shall end in its supervisory aspect. After that date, neither the Exchange that has replaced the Kuwait Stock Exchange nor the Kuwait Stock Exchange Committee may exercise any of the powers vested in the Authority by this Law.

Article 156

All the tangible and intangible assets of the Kuwait Stock Exchange shall devolve to the Authority upon the issuance of this Law, and the Kuwait Stock Exchange Committee shall continue to manage them until the Authority assumes the management functions. The Authority may entrust their management to Boursa Kuwait Securities Company.
The Authority shall, within the first year of this Law’s entry into force, commission an advisory committee to evaluate the tangible and intangible assets of the Kuwait Stock Exchange and to determine which of them shall devolve to the Authority and which shall remain with the Exchange, provided that the Authority shall authorise each of the Exchange and the Kuwait Stock Exchange Committee, or Boursa Kuwait Securities Company, to manage these assets and to carry out the administrative and financial functions required for the operation of the Exchange facility during the transitional period.
* Replaced by Law No. 22 of 2015 (Kuwait Al-Youm, Issue No. 1235, 10 May 2015).

Article 157

Without prejudice to the employment status established for the employees of the Kuwait Stock Exchange on the date this Law comes into force, these employees shall continue to work at the Authority with the same rights and duties existing on that date, and their remuneration for their previous period of service shall be settled and paid by the Kuwait Stock Exchange. The Authority shall requalify the employees of the Kuwait Stock Exchange and regularise their status in accordance with the requirements of implementing this Law and its Executive Regulations.
The proportion of Kuwaitis employed shall be set so that it is not less than (75%) of the total number of employees in the Capital Markets Authority, securities exchanges and Clearing Agencies.

Article 158

Pursuant to the provisions of this Law, the Kuwait Clearing Company shall be deemed a licensed Clearing Agency, and the company shall regularise its status in accordance with the provisions of this Law and its Executive Regulations within one year from the date of publication of the Executive Regulations.

Article 159

Pursuant to the provisions of this Law, a financial broker licensed on the Kuwait Stock Exchange shall be deemed a financial broker licensed on the Exchange, and the broker shall regularise its status in accordance with the provisions of this Law and its Executive Regulations within six months from the date of publication of the Executive Regulations.

Article 160

Pursuant to the provisions of this Law, all Securities listed on the Kuwait Stock Exchange shall be deemed listed on the Exchange.

Article 161

Investment funds authorised under Decree-Law No. 31 of 1990 shall be deemed licensed under the provisions of this Law and its Executive Regulations, and they shall regularise their status in accordance with the provisions of the Law and its Executive Regulations within six months from the date of publication of the Executive Regulations.

Article 162

Investment companies registered with the Central Bank of Kuwait that carry on the activity of managing third-party funds and are licensed for investment management shall be deemed licensed to manage Collective Investment Schemes under the provisions of this Law and its Executive Regulations, and they shall regularise their status in accordance with the provisions of this Law and its Executive Regulations within one year from the publication of the Executive Regulations.

Article 163

First: After the end of the transitional stages referred to in this Law, the following laws, decree-laws and decrees shall be repealed:
1 – The Decree issued on 14 August 1983 regulating the Kuwait Stock Exchange.
2 – The Decree regulating the settlement of securities trading transactions and the clearing house at the Kuwait Stock Exchange, dated 27 December 1986.
3 – Law No. (12) of 1998 on licensing the establishment of leasing and investment companies.
4 – Decree-Law No. (31) of 1990 on regulating the trading of securities and establishing investment funds.
5 – Law No. (2) of 1999 on the disclosure of interests in the shares of shareholding companies.
Second: The provisions of Articles (323) to (328) of the Commercial Law shall not apply to the exchanges to which the provisions of this Law apply.
Third: The provisions of Chapters Five and Six of Part Nine of the Companies Law are repealed.
* Replaced by Law No. 22 of 2015 (Kuwait Al-Youm, Issue No. 1235, 10 May 2015).

Article 164

This Law shall be deemed a special law, and its provisions shall be deemed special provisions. Every provision in any general or special law that conflicts with its provisions is repealed.

Article 165

The Prime Minister and the Ministers shall implement this Law, and it shall be published in the Official Gazette.

Issued on 21 February 2010 and published in the Official Gazette Kuwait Al-Youm on 28 February 2010.