Market Profiles

FII Market Entry Requirements for Kuwait

RBC IS operates a segregated account structure in this market.

Please refer to 'Market Account Opening Requirements' for information on the market requirements. Clients are requested to refer to the requirements for information purposes only.

For further information or support around accessing this market, please contact your RBC IS representative.

Client Notice

Please note not all financial instruments and exchanges listed below are available as an RBCIS product offering. Please consult our Terms & Conditions or reach out to your RBCIS representative for further details.

Boursa Kuwait (formerly known as Kuwait Stock Exchange)

Boursa Kuwait was founded in April 2014 by the Capital Markets Authority (CMA) Commissioners’ Council Resolution No. 37/2013 dated 20 November 2013. Effective 25 April 2016, Boursa Kuwait then replaced the Kuwait Stock Exchange (KSE), which was founded in August 1983 by a royal decree, to become Kuwait's official exchange. The Kuwait Clearing Company (KCC) offers clearing and depositary services for all transactions executed on the exchange.

Boursa Kuwait uses X-Stream trading system that is developed by the NASDAQ OMX Group. X-Stream is considered a high-performance trading platform able to handle thousands of trades per second and offer a single integrated platform for equities, debt and derivatives trading. The trading system also provides better controls including electronic surveillance of the market, transparency and disclosures. X-Stream is already utilised in the region by Nasdaq Dubai, the Dubai Financial Market and the Abu Dhabi Securities Exchange (ADX).

Boursa Kuwait classifies all equity stocks using FTSE Russell Industry Classification Benchmark (ICB) effective June 2018.

Boursa Kuwait Main Market 50 (BK Main 50) Index:

• BK Main 50 Index reflects the top 50 liquid companies in the Main Market.
• ISIN:             KW0IN0000200
• Index Code:     BKM50
• Short Name: BK Main 50
• Long Name:  Boursa Kuwait Main Market 50
• Base Value   5000
• Currency      KWD
• Description  Market cap weighted Price return Index
  The BK Main 50 Index inclusions and exclusions will be based on the calculation of the average daily traded value (ADTV), which is published simultaneously with the results of Boursa Kuwait Market Segmentation on the second Sunday of January.
• The Index constituents will be reviewed on an annual basis and the results of the review will be announced on the second Sunday of January and take effect on the second Sunday of February.

Sunday to Thursday:

OPENING AUCTION             08:50  09:00

Order Acceptance              08:50  08:59

Pre Open                             08:59   09:00

CONTINUOUS TRADING            09:00     12:30

Auction Market session 1        10:00    10:15

Auction Market session 2        11:00    11:15

CLOSING AUCTION                    12:30     12:40

Closing Auction phase one      12:30    12:35

Closing Auction phase two      12:35    12:40

TRADE AT LAST                          12:40 12:45

BUY IN BOARD                            13:15    13:30

ISIN (International Securities Identification Numbering): ISINs are available for securities traded in the Kuwait securities market.

Other: A ticker and a local stock number are used to identify listed securities on Boursa Kuwait.

Capital Market Authority (CMA)
Capital Market Authority (CMA) was approved by the Kuwait Parliament on 2 February 2011 and came into effect with the publication of its by-laws in the official gazette on 13 March 2011 (in Arabic). The CMA is under the purview of the Minister of Commerce & Industry and is managed by a Board named The Authority's Board of Commissioners that comprises of five full-time commissioners including Chairman and Deputy Chairman. The Board of Commissioners is the highest power in the Authority and is responsible for all resolutions issued by it whether legislative, regulatory or executive. Below is a summary of the CMA`s responsibilities:

• Issuance of laws and regulations
• Issuance of licenses
• Introduce measures for compliance with the law including review of capitalization of market participants
• Regulate public and private subscriptions
• Regulate mergers and acquisitions
• Implement sharia laws and promote Sharia compliant products
• Impose penalties and take necessary disciplinary actions
• Increase foreign interest through better market transparency, efficiency and fairness
• Control market manipulation practices
• Attract foreign investment in Boursa Kuwait, leading to increase in market liquidity, limit speculative trading, increase research coverage of local companies as well as institutional investment

Kuwait Clearing Company (KCC)
Kuwait Clearing Company is the central clearing, settlement and depository entity for the Kuwaiti securities market. It provides clearing, settlement and depository services to all Boursa Kuwait traded securities, derivatives, unlisted participating companies, local and regional bond instruments. The KCC also provides registrar and trustee services to the companies and investment funds, and performs local and regional custody services for both local and foreign investors.

Central Bank of Kuwait (CBK)
The Central Bank of Kuwait (CBK) aims to lay the foundations and maintain a flexible and stable monetary financial system in the State of Kuwait. The CBK also acts as a banker and financial advisor to the government, while representatives from both the public and private sectors make up the Board of Directors. The CBK is responsible for regulating all banks operating in Kuwait.

Equities and fixed income instruments are held in a dematerialised or immobilised form at the KCC.
Government Bonds and Bills are held in a dematerialised form at the Central Bank of Kuwait (CBK).
Corporate Bonds are held in immobilised form at the KCC. Some market participants keep them in physical form in vaults.

There are only 2 tick-sizes as follows:

• Price of up to 100.9 fils : tick size of 0.1 fil
• Price of 101 fils and above : tick size of 1.0 fil

Kuwait Dinar (KWD) is equivalent to 1000 fils.

Circuit breaker is 10 per cent up or down from the closing price of the last trading day for securities in the Premier Market and Main Market.

Equity:
T + 3 

Fixed Income:
Primary market:
Government Bonds T + 3 (Wednesdays)

Secondary market:
Government Bonds & Corporate bonds:
Usually T+3, negotiated between buyer and seller

KWD

Boursa Kuwait operates Over-the-Counter (OTC) service for unlisted local stocks of shareholding companies along with corporate bonds and sukuks. At present buyers and sellers must operate through licenced brokers (it is not necessary to use the same one). The brokers provide the formal documentation required from their clients for the transaction to Boursa Kuwait, where it is reviewed. If the transaction is approved, Boursa Kuwait will issue a Notice of Approval to each broker involved in the transaction, which allows the transfer of ownership. After receiving the approved transaction, the broker(s) finalize the transaction at the KCC, or the company which holds its shareholder registrar to transfer the ownership to the buyer. If Boursa Kuwait does not approve the transaction, a formal Notice of Rejection will be issued to the broker(s).

The settlement cycle

is T+ 3 for all investors in the market.

At KCC, the following two accounts would be maintained for all investors:

KCC will also maintain central settlement accounts for each custodian. Omnibus accounts for all clients for a given custodian:

1. A central cash settlement account

Trading/Settlement process

Currently not permitted except for market makers or backed by SLB contracts.

Turnarounds are possible. Boursa Kuwait system allows clients to sell shares on the same day that they are purchased, therefore turn around trades are possible in Boursa Kuwait. As short selling is currently not permitted, except for market makers or backed by SLB contracts, the purchase should be executed in the market prior to the sale.

In terms of settlement turnaround trades are processed in the same manner as any other trade. The shares are transferred on settlement date for both purchase and sale trade. The sale trade will be settled in subcustodian’s records only after settlement of the purchase trade.

The Kuwait Clearing Company (KCC) was appointed in 1986 to act as the clearing, and settlement agent for all security transactions at Boursa Kuwait. In the same year, in consultation with the KSE (now Boursa Kuwait), KCC formulated and implemented the necessary mechanisms and procedures for clearing and settlement processes. Since then, KCC has made significant progress in all aspects of its businesses including better risk management, improved services, implementation of new products and services and system enhancements. KCC has initiated and implemented a number of new products and services including electronic transfers of funds through clients' bank accounts, the depository services for corporate bonds, and local and regional custody services. KCC calculates the mutual obligations of market participants for the exchange of securities and money (clearance) and carries out the final transfer of securities (delivery).

The Central Bank of Kuwait (CBK) executes the transfer of funds through its payment system. Settlement is only available in Kuwaiti Dinar.

Kuwait Clearing Company (KCC) is the central clearing, settlement and depository entity for the Kuwaiti securities market. It provides clearing, settlement and depository services to all Boursa Kuwait traded securities, derivatives, unlisted participating companies, local and regional bond instruments. The KCC also provides registrar and trustee services to the companies and investment funds, and performs local and regional custody services for both local and foreign investors.

It also provides depository services for unlisted equity securities and debt instruments. In addition, the KCC provides registrar and trustee services to the companies and investment funds. The KCC is also a commercial entity which provides other value added services to its customers that do not pertain to this offering. KCC is responsible for safekeeping, clearing and maintaining the registers of most Boursa Kuwait listed securities in its electronic book-entry system. All securities are held at the KCC in a dematerialised form. The accounts are segregated and held in the name of the underlying investor at the KCC (unless the account is marked as an omnibus securities account). The KCC uses a system called eClearSettle to clear and settle the trades. The eClearSettle is electronically connected to Boursa Kuwait system and allows real time trade updates to KCC.

The KCC is a non-listed, tightly held corporation which is 72 per cent owned by those members of the market who have contributed to its capital and 28% owned by Boursa Kuwait. No individual investor of KCC is permitted to hold more than 25% of KCC, with the exception of Boursa Kuwait.

The KCC acts as central registrar for all listed companies, and undertakes the distribution of dividends and bonus shares.

BIS is an international organisation which fosters cooperation among central banks and other agencies in pursuit of monetary and financial stability. The Committee on Payments and Market Infrastructures (CPMI) uses three common structural approaches, or models, to categorise the links between delivery and payment in a securities settlement system. 

The settlement cycle in Kuwait is T+3. In terms of BIS models, this can be considered Model 1 settlement– i.e. gross settlement of both securities and cash.  Purchase obligations are payable by 9.30am local time while sale proceeds are paid by the KCC before  1.30pm local time. Movement of securities is processed in the KCC’s records during SD by 9.30am.

The CMA issued Resolution No.(68) of 2016 Regarding the KCC, which Regularised its Situations Pursuant to Law No.(7) of 2010 Regarding the Establishment of the Capital Markets Authority and    

Regulating Securities Activities and its Amendments. The CMA Board of Commissioners passed the resolution in its meeting No.(21) of 2016 held on 28 June 2016 and published it on 30 June 2016.

The following were resolved:

Article (1)

The KCC, which regularised its situations pursuant to the provisions of Law No.(7) of 2010 and its amendments, in addition to CMA resolutions and regulations issued in this regard, is hereby licensed to practice the activities of a clearing agency. It shall only provide central custody of securities and conduct settlement and clearing operations. The licence term for the mentioned services shall be three years, starting from the issuance date of the CMA licence certificate. The company shall be exempted from paying the initial fee of the licence for such period in respect of the licensed activities. It shall pay the fee when renewing the licence for any other term(s) pursuant to the provisions of Law No.(7) of 2010 and its executive by-laws and its amendments.

Article (2)

The minimum paid capital and the legal form for persons licensed to practice any service of a clearing agency's activities mentioned in the table below shall be as follows, according to the type of the licensed service:

Activity / Legal form / Capital (KWD)                                                                                     

1. Central custody of securities Shareholding company                5,000,000                       
2. Settlement and clearing operations Shareholding company      20,000,000                      

Article (3)

The minimum financial guarantee submitted to the CMA shall be KWD8 million for settlement and clearing operations.

Article (4)

The KCC shall comply with Article (2-2-3) of chapter two of module four of the executive by-laws of Law No.(7) of 2010 and its amendments by 30 June 2017.

Article (5)

The KCC shall comply with the transitional provisions mentioned in Resolution No.(72) of 2015 on the issuance of the executive by-laws of Law No.(7) of 2010 and its amendments.

Article (6)

The concerned bodies shall execute this resolution, each within its jurisdiction. This resolution shall come into force from the date of its issuance, and it shall be published in the Official Gazette.

On 20 July 2017, the CMA issued Resolution No. (113) of 2017 Regarding Extending the Grace Period Granted to Kuwait Clearing Company to comply with Article 2-2-3 of Chapter 2 of Module 4 of the Executive Bylaws of Law No 7 of 2010 and its Amendments.

Book-Entry: Kuwait is a beneficial owner market and all accounts at the Kuwait Clearing Co (KCC) are opened in the name of the beneficial owner, unless the securities account is opened as “omnibus securities account”.  Registration is not applicable for equities as settlement takes place via book-entry at the KCC. Securities are held in dematerialised/immobilised form and are transferred electronically from the seller's securities account to the buyer's securities account at the KCC. 

This is not applicable for fixed income securities as they are settled via book-entry. 

There are no specific ownership registration requirements associated with new issues as new issues are generally made in the dematerialised form.

Physical:  securities can be held by investors in the form of  Depositary receipt but cannot be traded on the Boursa Kuwait unless dematerialised. Investors may submit re-materialisation requests to the KCC for the withdrawal of securities from their accounts with the KCC.

Unlisted securities are traded on the OTC platform.

KCC is the central clearing, settlement and depository entity for the Kuwaiti securities market. It provides clearing, settlement and depository services to all Boursa Kuwait traded securities, derivatives, unlisted participating companies, local and regional bond instruments. The KCC also provides registrar and trustee services to the companies and investment funds, and performs local and regional custody services for both local and foreign investors.

Registration is on settlement date, and the legal ownership title is changed on trade date.

Share holdings may be required to be disclosed by the beneficial owner, particularly when holdings reach or exceed prescribed disclosure limits. Investors must ensure that they comply in full by reporting such holdings to the appropriate organisations for this market, within the timeframe required. If you have any questions regarding this issue we encourage you to consult your legal counsel. 

Failure to comply with reporting requirements may lead to penalties and/or other sanctions.

The following are the foreign ownership restrictions in Kuwait.

• While Kuwait's Ministry of
•  
• Commerce and Industry (MOCI) has lifted the 49 per cent cumulative foreign ownership limit (FOL) on Kuwaiti banks through decree 694/2018 in December 2018, ownership in any listed bank regulated by the Central Bank of Kuwait (CBK) is limited to five per cent of the bank’s capital without prior approval from the CBK.
• Any Ownership of 5% (or more) of any listed company should be publicly disclosed.
• Once an investor reaches the 5% threshold, they are obliged to complete the disclosure requirement within five business days from the Trading Day.
• For every 0.5% change above the 5% threshold a further disclosure has to be submitted to the CMA, Boursa Kuwait and the issuing company within ten business days from the Trading Day.
• Once the investor holdings drop below the 5% threshold, a final disclosure has to be made to the CMA, Boursa Kuwait and the issuing company.

Foreign ownership limit is enforced and monitored by the Capital Markets Authority as per the provisions of law no. 7 for the year 2010 as amended in 2015 and the regulations hereof. The compliance with disclosure requirements of the CMA is the investor's ultimate responsibility. 

The following has to be completed when filing for disclosure :

• To be reported within 5 business days of achieving interests (clarified to be Trading Date)
• Name of the interested person and the names of any other persons who contributed in achieving the interest
• Details of any financial support from another person for the acquisition or funding loans
• Indicate whether the purpose of ownership is to acquire the company, or to invest in it or otherwise
• The total of related shares with details of what he owned before the disposition and total number of shares that he owned after the disposition and their percentage of the share capital
• Nature of disposal and the statutory basis for disclosure

Complying with the disclosure requirements imposed by the CMA is the ultimate responsibility of the investor.

A buy-in board has been introduced since April 2018 to address securities default, with settlement roll-over and cash close-out.

If a broker executes a trade for an investor which does not have the securities in possession, the investor is assumed to be in a naked short sell position. A new platform is provided for brokerage firms to cover these short positions. Brokerage firms are able to enter their buy-in orders starting from T to T+2. After T+2, KCC places mandatory buy in orders on behalf of brokerage firms. KCC settles these trades on a T+1 settlement cycle.

The buy-in session is available after the regular trading session is closed and the reference prices are set. The reference price for buy-in board securities is set to the close price of regular securities of the same trading day (and to reference price if there is no close for the day) with a maximum premium of 5 per cent for Premium Market and 10 per cent for Main Market .

Buy-in session is run as an auction style session. Orders are matched at the end of the session.

Securities Lending and Borrowing (SLB) is allowed to support market making and facilitate covered short selling. Any investor which is interested to lend securities can apply to become KCC approved lender and lend the securities in the pool managed by the KCC as SLB agent.

Collateral requirement for the loan requests is computed using the previous business day’s closing price. Transaction fee for each successful borrowing request is 5 KWD plus 3 per cent of the loan value, which will be charged on the repayment date.  

In 2017, as part of the implementation of Interim Post Trade Model Phase 1 (IPTM1) the settlement guarantee fund was replaced by the Financial Collateral System as per CMA Resolution 72 /2016. In the collateral system each broker and custodian places a collateral amount related to their trading activities with the Kuwait Clearing Company (KCC) to cover their failed obligation.

The KCC is given authority to debit the collateral to cover the obligation if the broker/custodian fails to cover the obligation on SD. In the case where the collateral is not sufficient, the broker/custodian is required to place additional collateral in the account.

Custodian collateral will only be utilised in the case where the custodian does not cover the obligation on SD and has not rejected the trade by the market rejection deadline.

The following is specified in the Financial Collateral Document issued by the KCC and approved by the CMA:

Clearing shall cover the events of failure resulting from trading (risk waterfall) through the following arrangement:

The subcustodians KYC due diligence process complies with regulatory requirements on anti-money laundering.

All accounts are required to be in the name of the beneficial owner, therefore segregated securities accounts are opened for each client at the KCC and in the subcustodian's books, unless the securities account is opened as “omnibus securities account”.


The following accounts are required for investment in the Kuwait market:

• A securities account for holding shares
• A (currency denominated) account for settlement of securities transactions, collection of dividends, payment of charges and credit of interest income.

The Central Bank of Kuwait Circular dated June 2010, the Capital Market Authority AML regulations and the Anti-Money Laundering and Counter-Terrorism Financing Law published in the Official Gazette in June 2013 now incorporated in the CMA Executive Bylaws amended in November 2015, require that transactions in a cash account are in line with the purpose of opening the cash account. The cash accounts opened in Subcustodian records are to facilitate the settlement of clients' Kuwaiti securities related transactions / asset servicing and hence, in line with the above stated laws / rules, are required to be used only for those purposes.

This is an FII market. Please contact your RBC Investor Services' Client Manager before making portfolio investments.

Foreign Institutional Investors (FII) are not required to obtain any prior approval before investing in the market. Further, they can trade in all securities available in the secondary market subject to the foreign ownership and disclosure requirements stated below. 

While Kuwait's Ministry of Commerce and Industry (MOCI) has lifted the 49 per cent cumulative foreign ownership limit (FOL) on Kuwaiti banks through decree 694/2018 in December 2018, ownership in any listed bank regulated by the Central Bank of Kuwait (CBK) is limited to five per cent of the bank’s capital without prior approval from the CBK.

Any ownership of 5% (or more) of any listed company should be publicly disclosed. Refer above for full details regarding disclosure requirements.

Companies increasing their capital or becoming public may restrict new share distribution to Kuwaitis or Gulf cooperation country (GCC) nationals only. Restrictions may vary depending on the issuer. Non-Kuwaitis will have voting rights and board nomination rights, in addition to any other rights granted by the law to all shareholders in such companies.

Sale and income proceeds can be remitted or repatriated freely, provided that the transfers are made through a registered commercial bank or authorised foreign exchange dealer.

Effective November 1, 2015, the International Bank Account Number (IBAN) became the only acceptable cash account format for remittance instructions in Kuwait.

CBK Circular allows local banks to make deposits with foreign banks in KWD while conducting swap and forward contracts in foreign currencies against the KWD for commercial transactions only.

The Central Bank of Kuwait (CBK) uses the Kuwait's Automated Settlement System for Inter-Participant Payments (KASSIP). It is an RTGS based settlement mechanism in which both processing and final settlement of the inter-bank funds transfer instruction take place continuously. The following functions are available:

• Message Handling
• Payment Processing
• Liquidity Management
• Monitoring and Reporting
• Billing of Fees and Charges

The RGTS System supports the following Kuwait banking operations:

• Inter-Participant transfers
• Ministries and Government payments to and from Participants
• Inter-bank cheque clearing settlement
• Monetary policy transactions
• Sale, switch and redemption of Treasury Bills and Treasury Bonds
• Other CBK transactions affecting participant accounts.
• CBK payments in and out including transfers to and from Ministries and Government organisations in standard formats for STP payments.
• Processing of CBK cheques
• Processing of cash transaction

Further to the circular 2/BS/27/1997 dated 27 May 1997 available at   http://www.cbk.gov.kw/en/images/section-10-10-2745-1.pdf , credit lines are not provided for KWD accounts opened for the purpose of securities transactions.

Equity: Overdraft not permitted

Fixed Income: Overdraft  not permitted

N/A

There is no fixed dividend payment frequency in the market. It varies from company to company as each company can have a different calendar year. However, as per CMA regulation, for the cash dividends eligible to shareholders in listed companies whose shares are being traded the payable date must be announced. The company need to advise the applicable Cum, Ex, Record and Payment date.

 Bonus Issues (subject to approval at both the company AGM and the EGM)

- As per Article No 250 of the Kuwait Companies Law, any resolution at an Extraordinary General Meeting (EGM) of a company shall not be effective until its proclamation.

- Proclamation procedure:

1- Publishing minutes of meeting of Board of Directors in the Official Gazette.

2- Updating the shares quantity (Issued Capital) of the (company) in the commercial registry.

- Record date: After receiving the required approvals the company will announce the Cum, Ex, Record and Payment date.

- Ex-date: After receiving the required approvals the company will announce the cum, ex, record and payment date.

- The payment date  After receiving the required approvals the company will announce the cum, ex, record and payment date.  KCC (The Central Depository) will issue cheques (or electronic dividends) for the investors’ entitlements on the payment date. Cheques are subject to clearance which may take between 1-2 days.

Interest on fixed income securities is generally paid on a quarterly, semi-annual or annual basis.

Not applicable as cash dividends, interest income, bonus shares and right issues would be directly paid by KCC.

N/A

There is no fixed income payment frequency in the market. It varies from company to company as each company can have a different calendar year.

Entitlements are automatically processed by the KCC and entitlement is based on the settled positions on record date. 

The company will announce the cum, ex, record and payment date.

None, proxy voting is available to foreign shareholders.

Shares are not blocked since only shareholders on AGM dates are entitled to vote.

In November 2022, the Capital Markets Authority (CMA) has issued directions mandating Record date to be 10 business days before the AGM date. The announcement date by the issuer will be announced at least 5 business days prior to AGM Record date. It is worth noting that previously the Record date used to be on the AGM date.

Upon the availability of announcement and translation of agenda in English within one business day of announcement in the market.

For listed equities, companies are required to provide results of meetings to Boursa Kuwait Companies are also required to provide this information in newspapers. On the day following the AGM, Boursa Kuwait will announce the distribution results of the AGM that got approved.

Boursa Kuwait uses several means for broadcasting market information to investors as follows:

• Boursa Kuwait website http://www.boursakuwait.com.kw
• linkage with mobile computers through GSM Lines in and outside Kuwait
• paging System Service through Reuters
• Messages through mobile telephones
• trading information is broadcasted by Kuwait television through a ticker tape
• wireless mobile computer service inside the KSE building
• news agencies.

Computer Screens are also available in and outside Boursa Kuwait premises to convey trading and markets activities through the Ministry of Communication, Fast telco and Arabia Telecommunication, according to the fees specified by the KSE administration and other sectors that provide these services.

Market and Company laws allow an investor to instruct their subcustodian to represent and cast votes at company meetings. The right of proxy voting can be assigned via a Power of Attorney by the investor. Subcustodian will only act on instructions where the Investor to Global Custodian to Subcustodian POA has been legalised in Kuwait via the Ministry of Foreign Affairs.

Proxy voting is by physical attendance or electronic voting that was introduced in May 2020.

N/A

N/A

N/A

‘Law No. 22 of 2015’ that amends certain provisions of ‘Law No. 7 of 2010’ is effective from 10 November 2015 and waives taxes on all income derived from securities.N/A ‘Law No. 22 of 2015’ that amends certain provisions of ‘Law No. 7 of 2010’ is effective from 10 November 2015 and waives taxes on all income derived from securities.

It is recommended that clients consult with a tax advisor for the most up to date list and for specific tax advice.

Not applicable in the Kuwait securities market.

N/A

KUWAIT Holiday Calendar

• Boursa Kuwait http://www.boursakuwait.com.kw 
• Central Bank of Kuwait https://www.cbk.gov.kw/en
• Kuwait Clearing Company http://www.maqasa.com/