Kuwait has announced the launch of a series of sweeping reforms to modernize its capital markets, enhancing market efficiency and boosting international investor confidence. The new measures include the introduction of a central counterparty clearing framework, updating brokerage standards, and streamlining financial settlement systems.
The Capital Markets Authority explained in a press release that these reforms were launched as part of the second phase of the third part of the Market Development Program, which falls within the framework of Kuwait Vision 2035, which aims to diversify the economy, enhance private sector participation, and modernize vital sectors such as finance, infrastructure, and technology.
The measures include the introduction of a sub-account numbering system to enhance transparency, as well as the development of a digital infrastructure to support the future listing of exchange-traded funds and fixed-income instruments such as bonds and sukuk, following the completion of the necessary legislative changes.
Mohammed Saud Al-Osaimi, CEO of Boursa Kuwait, said that the launch of this phase “reflects the exchange’s commitment to developing an advanced and efficient trading environment in accordance with the highest international standards.” He added that this step came as a result of close cooperation between various stakeholders in the capital markets and represents a significant step towards expanding market depth, increasing transparency, and enhancing its resilience.
For his part, Bader Nasser Al-Kharafi, Chairman of Boursa Kuwait, noted that this cooperation has contributed to developing the market infrastructure and introducing advanced products and services that enhance the investment environment and make it more dynamic and transparent. He added that these efforts are essential to attracting capital, creating added value for the national economy, and supporting efforts to diversify sources of income.
The reforms included the introduction of a central clearing framework to reduce settlement risks and align clearing operations with international standards. The measures also included simplifying cash settlement processes through the KASSIP system to facilitate financial transactions through local banks and the Central Bank of Kuwait. The classification of brokerage firms was also upgraded to “qualified intermediary,” strengthening the market structure, in addition to introducing a sub-account numbering system to improve transparency in comprehensive accounts.
The reforms also included updating the digital infrastructure in preparation for the future launch of trading in exchange-traded funds and fixed-income instruments such as bonds and sukuk. This phase is considered one of the largest modernization processes since the privatization of the Kuwait Stock Exchange in 2019. The Capital Markets Authority and Boursa Kuwait affirmed their commitment to continuing to develop the market infrastructure, support sustainable growth, and enhance Kuwait’s position as a distinguished regional investment center.
