Kuwait Upgrades its Capital Market to Make it More Competitive and Attract Global Investments

The launch of MD 3.2 is a significant step towards strengthening the Kuwait capital market and reinforcing its position as a leading financial centre domestically and globally.

The Kuwaiti capital market has started a market development program reaffirming its commitment to creating a more attractive, competitive, and efficient market that meets investor ambitions and aligns with international best practice.

They have implemented many initiatives to enhance the operational and regulatory framework and expand the range of products and services offered in the Kuwaiti capital market. Led by Capital Markets Authority (CMA) and in partnership with the Central Bank of Kuwait, local banks and investment companies, Boursa Kuwait and the Kuwait Clearing Company (KCC) gave many transformative products, services, including the Central Counterparty (CCP) framework, which lowers risks and offers guarantees to advance clearings and settlement process in line with international standards.

They have also introduced sub-account numbers under omnibus accounts, which refers to a consolidated account that pools together assets and liabilities of several people, to improve transparency; upgrading broking firms operating system to ‘Qualified Broker’ status, marking a significant step forward in market structure; and cash settlement through Central Bank of Kuwait’s Kuwait Automated Settlement System for Inter-participant Payments (KASSIP) system.

Additionally, the IT infrastructure and technical environment are updated, and extensive testing is conducted with all relevant parties to get Exchange-Traded Funds (ETFs) and fixed-income securities like bonds and sukuk ready for listing and trading.

This milestone is one of the biggest changes in the market’s history since Kuwait’s stock exchange privatisation. It aims to restructure the regulatory and operational infrastructure of the market, enabling it to bring in fresh investment products and instruments to increase market liquidity and strengthen its role as a strategic engine of the country’s economic expansion.

Mr. Bader Nasser Al-Kharafi, Chairman of Boursa Kuwait, confirmed that this development is a turning point in the ongoing growth of Kuwait’s capital market, strengthening its competitiveness and position at the regional and international levels.

He highlighted that this also shows Boursa Kuwait’s commitment to supporting the State’s goals of making Kuwait a leading regional financial hub that attracts investment, all the while working closely with all stakeholders to implement a strategic plan to grow the market and increase its contribution to the expansion of the national economy.

Boursa Kuwait made efforts to make the market’s infrastructure ready for the launch of its latest phase, which marks a significant operational milestone for the exchange and the capital market.

The exchange played a key role in implementing the technical framework in the comprehensive market development program (MD 3.2) as it continued to improve the trading system, which will support the launch of new products, improve market integration, and create the foundation for upcoming offers like derivatives. The upgrades also show that the market is ready to expand its range of investment products and bring its regulatory framework into compliance with world-class standards.

The launch of MD 3.2 is a significant step towards strengthening the Kuwait capital market and reinforcing its position as a leading financial centre domestically and globally. It expands on a comprehensive reform journey that aims to increase the range of investment products, boost the effectiveness of the operational infrastructure, and implement the highest standards of governance and transparency to meet the investor expectations and make the Kuwaiti capital market appealing to investors.

The milestone reflects the success of a strategic vision to create a safe and transparent capital market that ensures issuers get access to a wide range of investment options and gives investors more stability and varied opportunities.

The capital market apparatus remains dedicated to improving the investment climate and infrastructure development, supporting the national economy, advancing the United Nations’ sustainable development goals, and securing its position as a leading financial hub and a top destination for capital from around the world.

The capital market apparatus is the infrastructure that allows the buying and selling of long-term financial instruments, including stocks, bonds, and derivatives.