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CMA originates the Listed Companies and Capital Market Institutions Auditors Supervision Division. The Authority as well originated a committee that includes representatives from some relevant governmental entities and independent experts.
The importance of this Division and the committee comes in line with the need to improving market transparency and confidence in the financial statements/reports, and for the purpose of creating a structure that is equivalent to other international capital markets oversight structures, which would support the attraction of foreign investment and cross listing. This decision was based on the CMA analysis and benchmark of the international best practices relating to oversight of public entities auditors.
The Division and the Committee will be focused on establishing the standards and conditions required for the auditors who audit the books of joint stock companies listed on the Exchange and Capital Market Institutes; the registration of certified public accountants licensed by the Ministry of Commerce and Investment and registered in the Certified Public Accountants Register, who are providing audit services to listed companies and who are in compliance with the CMA standards and conditions; supervision and inspection of such auditors within the CMA scope of work; contributing with the Saudi Organization of Certified Public Accountants to improving the financial reporting quality of listed companies. 
The CMA Board has issued its resolution concerning the exemption of those intending to offer debt instruments in the market from the fees collected by the CMA upon submitting an application to register debt instruments, reviewing the application related to the registration of debt instruments and registration of debt instruments until the end of 2020.
The CMA Board of Commissioners has issued its resolution to exempt listed companies from disclosing the 4th Quarter financial statements for current financial year.
CMA issued administrative decision No. 8/2018 relating to issuance of the Rules for accreditation of the auditors. The rules focus on the licensing term for the audit firms to practice auditing processes of the companies regulated by CMA. The rules states the licenses is for two renewable years. The move comes to ease the process of follow up and evaluation of the firms to ensure meeting the requirements of professional conduct according to the required standards of efficiency and quality of professional performance derived from the quality of services rendered to investors which must be of high quality, objective and trustworthy to contribute to revealing points of weakness and strength in the financial performance of the companies to enhance their growth and ability of advancement to serve the national economy beside providing protection to investors through sound statements to take informed investment decision.
The Capital Market Authority has launched whistle blowing window at its website. The move aims to upgrade the capital market and insurance sectors and protect the participants from unfair and unsound practices.
CMA has also launched earlier customer complaints window which is different from whistle blowing window. Whistle blowing is reporting illegal or unethical act which would harm the market participants while the complaint is to remedy a damage or personal interest of the person.
With the annual general meetings’ season approaching, the companies are forwarding their applications for approval of ordinary annual general meetings by the Capital Market Authority. As most ordinary annual general meeting convenes in March every year.
On the importance of general meetings of the companies and investment funds, Director of Legal Affairs and Enforcement Department at CMA said the legislator conferred on the general meetings a regulatory role including protecting the rights of small shareholders and ensuring integrity, prohibiting conflicts of interests between related parties as the general meeting is the supreme authority of any company that takes all resolutions in material matters over the powers of the board of directors and their resolutions are final and mandatory.

The Capital Market Authority has introduced an electronic system allowing the competent and experienced persons an opportunity to join the boards of directors of public joint stock companies.

The system allow the companies several options to ease the process of obtaining specific list of the persons who are apt to act as directors by viewing the CVs, personal details and contact addresses of the candidates. The database also allow the registered persons to update their details as and when they change. The database is confidential and access is restricted only to the registered entities.
The Vice President for Capital Market Sector urged all Omanis and non-Omanis who are competent and interested to act as directors to join the database through the link: https://e.cma.gov.om/BoardMemberofdirectors/home. The companies desirous of benefiting from the database may visit the site through the same link.

 


Qatar Financial Markets Authority “QFMA” is exerting efforts to establish the principles of governance, disclosure and transparency, and to support and promote minority’s rights in the Qatari capital markets as well as adopt international best practices in this regard. Accordingly, it has confirmed that companies listed on the financial market must comply with the principles and provisions of Governance Code for Companies & Legal Entities Listed on the Main Market, which is not subject to the principle of “Comply or Clarify”.
In this regard, QFMA indicated that the aim of the Governance Code is to promote appropriate procedures and policies to implement its provisions and principles in light of the challenges, and to find the best way to address them in accordance with the best international standards and practices.
QFMA also stated that listed companies, in their governance report, must clearly disclose any provisions or principles have not been complied with and mention the justifications of non-compliance. QFMA will review disclosures and reports to assess what companies reports contained when they do not comply with the Code’s provisions and principles and the non-compliance, however justified, will be deemed to be in violation to the Governance Code requirements. QFMA will review the Company's views about these justifications for the purpose of its compliance and take appropriate action to comply.

 

CMA announced applying for the activity of Valuation of Assets shall be according to the application form provided in Appendix No. (5) (Application for Securities Activities License) of Module five (Securities Activities and Registered Persons) of the Executive Bylaws of Law No. (7) of 2010 and their amendments. It is available for all persons who meet all the license requirements stipulated in Article (1-5) of Chapter One (Securities Activities) of Module Five (Securities Activities and Registered Persons) of the Executive Bylaws of Law No. (7) of 2010 and their amendments, especially the requirements stipulated in Appendix (1) (Capital Requirements and Legal Form of Licensed Persons) of the same Module. In this case the company’s capital shall be one hundred thousand K.D. (Kuwaiti Dinar) and its legal entity as a shareholding company or limited liability, provided that one of the partners shall be an auditor registered with the CMA.
The Capital Markets Authority (CMA) has announced the end date of corporate governance reports’ submission period of 2017, pursuant to the provisions of Module Fifteen (Corporate Governance) of the Executive Bylaws of Law No. 7 of 2010 on the Establishment of the Capital Markets Authority and Regulating Securities Activities and their amendments, which stipulate that companies subject to the mentioned rules shall annually provide the CMA with an evidence of meeting the requirements set forth in the rules of corporate governance issued by the CMA.

It is worth mentioning that 197 out of 198 companies, which are subject to corporate governance rules, have submitted the required report within the specified period.

 

As part of its ongoing efforts to improve the various transactions related to securities activities and enhance disclosure and transparency levels in the Kuwaiti financial market, the Capital Markets Authority (CMA) will be, as 10/2/2019, launching the XBRL language - "disclosure system - iFSAH. Details of disclosure data and requirements specified in the system is in the five gateways as follows:

 

• Financials Reporting Domain
• Anti-Money Laundering Reporting Domain
• General Assembly Reporting Domain
• Corporate Governance Reporting Domain
• Disclosures Reporting Domain
The Capital Markets Authority of Kuwait would like to hereby announce the results of the bidding for a 44% equity stake in the issued share capital of Boursa Kuwait Securities Company K.P.S.C. and equivalent to 84,134,600 shares (eighty-four million, one hundred and thirty-four thousand and six hundred shares). The transaction was awarded to a consortium comprising of Athens Stock Exchange, National Investments Company, First Investment Company and Arzan Financial Group, that presented the highest Financial Bid of 237 fils per share and equivalent to a total Financial Bid of KWD 19,939,900.200 for the offered equity stake.


The Capital Markets Authority (CMA) held a press conference today on the launch of the first stage of the third phase of the market development project at the Boursa Kuwait building, in the presence of Boursa Kuwait and Kuwait Clearing Company. CMA was represented by Mr. Muthanna Abdulwahab Al Saleh / Head of the Markets Sector, Boursa Kuwait was represented by Mr. Mohammed Soud Al-Osaimi/ Acting Managing Director, and the KCC was represented by Mr. Khaldoun Shaker Al-Tabtabaei/ Managing Director.
On Thursday, the CMA issued Resolution No. (60) of 2019, announcing the launch of the first stage of the third phase of the market development project. This was followed by comprehensive amendments to the Executive Bylaws of Law No. 7 of 2010 through the issuance of Resolution No. (59) of 2019. The market development project is one of the pillars of the objectives of the CMA in the development of the capital markets and the persification of investment instruments, taking into account the compatibility with best practices and global standards, the most important principles of infrastructure in the financial market.
It should be noted that phase three is an additional step in the market development, which completed the first phase in May 2017 and the second phase in April 2018. The most important results of the previous stages were the promotion of Kuwait to the ranks of emerging markets by the world's top rating institutions (FTSE Russell ) And (S & P Dow Jones), as well as placing Kuwait on the watch list for a promotion by Morgan Stanley (MSCI).
The changes were implemented after a series of extensive examinations with all the participating parties in order to ensure their readiness while ensuring the ability of their systems to accommodate all the variables related to this stage. The list of participating parties includes the Capital Markets Authority, Boursa Kuwait, Kuwait Clearing Company, brokerage companies and investment companies. The most important changes of this stage are:
- Developing a platform for trading investment fund units and income-generating real estate funds (traded).
- Purchase Offer.
-Trading Transactions.
- Introducing the trading session on the closing price (Trade at Last).
- Improve the mechanism of transactions agreed upon.
- Developing some rules and regulations.
The launch of the short sale and the lending and borrowing of securities have been postponed to a later date for further testing to ensure that all parties are ready to provide this product.

 


CMA would like to draw your attention to the provisions of Article (2-37-15) of Chapter 2 (Funds) of Module Thirteen (Collective Investment Schemes) of the Executive Bylaws of Law No. (7) of 2010 and their amendments. It stipulates that the liquidator shall submit a quarterly annual report to the CMA regarding the liquidation.
Therefore, you shall comply with the provisions of the mentioned Article, and submit a quarterly report to the CMA according to the form attached to this circular. You shall also submit reviewed quarterly financial statements and audited annual financial statements, and the auditor’s report on the under liquidation fund within 30 days from the end of the period of liquidation and financial statements’ report.
You shall also abide by the provisions of Article (2-37) of Chapter 2 (Funds) of Module Thirteen (Collective Investment Schemes) of the Executive Bylaws of Law No. (7) of 2010 and their amendments, and comply with all requirements stipulated in the Bylaws regarding the liquidation.
Thus, a fund liquidator shall follow this circular from the financial year ending 30/06/2019 and the following financial periods in accordance with the financial year of every under liquidation fund.

 

With reference to the subject above, and the FATCA Agreement between Ministry of Finance (State of Kuwait Government) and U.S. Department of the Treasury (U.S.A. Government), the CMA draws the attention of all licensed persons subject to its supervision, and who are subject to the scope of application of FATCA Law, to the fact that the American Internal Revenue Service (IRS) is about to update FATCA XML Schema.

Kindly adhere with the following:
First: Report on FATCA XML Schema of 2018 from June 1 to August 30, 2019 though the website of the Ministry of Finance http://www.mof.gov.kw/FATCA.aspx in accordance with the notification issued by the American Internal Revenue Service (IRS) on Version No. 2.0 concerning the requirements of FATCA XML Schema.
Second: Financial institutions registered on the IRS website must submit their annual reports even if they do not have US accounts. (null reports)
Third: Financial institutions that have past reports of previous years must submit the reports separately for each year.
Fourth: Financial institutions wishing to cancel reports previously submitted in previous years for some errors can do that by contacting the IRS directly through the IRS website:
https://www.irs.gov/businesses/corporations/foreign-account-tax-compliance-act-fatca
Therefore, we attach the concerned regulations issued by Ministry of Finance.

For any inquiries, kindly contact Ministry of Finance on the following email address:

fatca-inquiry@mof.gov.kw

 

We would like to draw your attention to the update made by Kuwait Financial Intelligence Unit through its website on the suspicion indicators of Anti-Money Laundering and Combating Financing of Terrorism. This update helps the financial institutions and identified non-financial businesses and professions to monitor the suspicious transactions of Anti-Money Laundering and Combating Financing of Terrorism to be in line with the local, regional, and international developments. Therefore, to view the updated indicators, kindly visit the website of Kuwait Financial Intelligence Unit. (www.kwfiu.gov.kw) 

With a view to simplifying procedures and speeding up transactions, in order to save time and effort, FRA decided to receive periodical and annual financial statements through the following e-mail (Financial.Statements@fra.gov.eg) and hard copies will be submitted to FRA in ways that are legally followed. Provided that the prescribed legal dates shall be counted once the receipt of the e-mail arrives.
FRA’s Chairman revealed that FRA’s BOD has issued a decision regarding extending the deadline granted to the companies subject to the provisions of the Law no. 176 of 2018 on regulating Financial Leasing and Factoring Activities to regularize their situation for new six months starting from the 14th of next February. Financial leasing and factoring companies shall inform the Authority -no later than the end of March 2019- whether it will regularize its situation or not in accordance with provisions of Law no. 176 of 2018 on regulating Financial Leasing and Factoring Activities and decisions issued by FRA’s Board. In addition, if the company agrees to regularize its situation, then it shall submit to FRA a program attached to a time plan of the measures taken or will be taken by the company to regularize its situation.
FRA’s Chairman presented the main results of the committee that is assigned to prepare a report on international best practices related to the rules and decisions governing futures exchange. Accordingly, an intensive work plan will be developed in coordination with the Authority’s experts to speed up the preparation of all regulatory decision related to futures exchange to be submitted to FRA’s BOD for the issuance of the needed decisions.
FRA’s Chairman announced that the first year (2018-2019) of the schedule set for implementing the comprehensive strategy of non-banking financial activities has entered into force. He added that among the strategy’s priorities is raising capital and issuance rates , providing tools for financing national projects and infrastructure projects , improving Egypt's ranking in the Doing Business Report and the International Competitiveness Report and motivating companies to sustainability and participation in international environmental and community initiatives.
In order to complete the effective role played by companies and associations engaged in microfinance activities in the field of financial inclusion and providing multiple alternatives to finance small and medium enterprises, FRA’s Chairman emphasized that FRA’s BOD appreciated the vital role played by the units operating in microfinance activity where the number of beneficiaries reached 2.8 million with total microfinance balances of 11.5 billion pounds by the end of 2018. He added that it was important to set the rules and regulations necessary for these units to start micro-leasing activity. That is after the Board approved licensing of companies, associations and civil institutions to engage in micro-leasing activity to create another area of financing for micro-projects by providing assets and equipment to carry out the activities through leasing contracts ending with the ownership of such assets and equipment.
FRA’s Chairman approves condensed financial statements prepared in accordance with FRA’s BOD decision no. (55) of 2018 regarding the controls and means of publishing for companies offering its securities in the IPO or companies which have listed securities in the Egyptian Exchange . The third item of Article 1 stipulates that the mentioned companies shall publish a summary of the annual financial statements, clarifications thereto and auditor's report thereon in one of the widely circulated daily Egyptian newspapers published in Arabic according to the form prepared by the Authority for this purpose.
FRA’s Chairman revealed that the number of leasing companies that regularized their status has reached 28 leasing companies out of 35 active companies in the last five years, in addition to other eight factoring companies out of 9 licensed companies which regularized their status. This comes in the light of FRA’s BOD decision no. 137 of 2018 regarding the controls and conditions required to regularize the status of current leasing and factoring companies after the issuance of Law no. 176 of 2018 - mid-August last – on regulating leasing and factoring activities. The said Law stipulated in article 1 that existing companies shall be granted a period of another six months to regularize their status.
Within the framework of activating Futures Exchanges, FRA’s Chairman approved the adoption of the two preliminary contract forms and the statute of Futures Exchange. In a step to establish and manage an electronic trading platform through which trading will be held on contracts derive its value from price indices or securities or financial instruments listed at one of the Stock Exchanges.


Within the framework of launching derivatives in Egypt, FRA’s Chairman confirmed the approval of FRA’s BOD to grant license for brokerage companies to be engaged in futures after meeting the minimum limit set for issued capital and paid-up capital for both activities (securities brokerage and futures brokerage). In addition to other conditions, including amending the company’s statute and submitting a statement that the company opens an account at MCDR for transactions in futures contracts , besides submitting the most recent annual accredited financial statements or subsequent periodic financial statements accompanied by the auditor's report.
FRA’s Chairman said that in order to activate trading in derivatives, which is the cornerstone for the establishment of futures exchanges, FRA’s BOD decision no. 49 of 2019 stipulated the conditions for obtaining a license to engage in futures brokerage. These conditions stated that the company's issued and paid-up capital shall not be less than ten million pounds or the equivalent of foreign currencies. It shall include among its founders legal persons not less than (50%) of the company's capital, whereas financial institutions shall not be less than (25%) of the capital.
He added that the company shall provide headquarters that suits the activity, technical requirements, necessary systems for the company and its branches as well as applications and licensed software. Moreover, the company shall provide the minimum needed for an automated link infrastructure with the exchange and MCDR in accordance with the technical specifications set by the Stock Exchange and MCDR. Also, the company shall provide systems, applications and licensed software necessary for the operation of various services.
FRA’s Chairman emphasized that the Board's decision took into consideration corporate governance rules set for brokerage companies upon the formation of the Board of Directors of futures brokerage companies. The majority of Board members shall be non-executive and half of the non-executive members are independent. In addition, the rules stated that the Board shall be appointed for a period of three years, renewable. Also, the rules stipulated that the Chief Executive Officer (CEO) is assigned to the actual management of the Company. In addition, company’s founders, its board of directors and executive directors shall have good reputation, none of them has been sentenced during the five years preceding licensing to penalty of felony or misdemeanor or in one of the offenses set forth in the laws governing non-banking financial activities unless he has been rehabilitated or executed the sentence and a period of three years are passed.
He noted that decision no. (49) of 2019 sets number of conditions to be fulfilled by those applying for the main jobs in the company. The main condition includes the practical experience of not less than five years in a job or work related to the field of capital markets and stock exchanges, it may be deducted to four years if the applicant has specialized studies in the field. On the other hand, the period of practical experience required is increased to seven years for the positions of chief executive and operations manager. The final accreditation of the main posts shall be granted after the candidate has passed FRA’s tests.
He stressed that companies that are required to obtain a license to engage in futures brokerage shall keep records, documents, accounts and financial statements that show their financial position, clients’ financial position , transactions and account opening agreements for a period of five years that is for paper copies or until a final judgment in any lawsuits related to these documents ,whichever is more. Also, the Authority shall review and examine these documents provided that an electronic copy of all the said documents shall be kept for a period of not less than fifteen years. The company shall pay insurance fees in cash by half of the value of the issued capital.
FRA’s Chairman also confirmed that futures brokerage company shall prepare automated systems necessary to follow up and evaluate collaterals / cash guarantee and the rules of addition to and deduction from it. The company shall re-evaluate the securities by the end of each working day based on the last closing price by comparing the market value with the last quoted closing price on the stock exchange by the end of each working day. It shall also deposit on behalf of its client the collateral value at MCDR in cash or deducting the amount from its settlement accounts with the clearing bank. In case of a decrease in securities’ market value, the company shall complete the percentage of cash guarantee as specified in the contract between it and the client, upon notification thereof from MCDR.
The Company shall enter into a written contract with the client in accordance with the guiding form prepared by the Authority in this regard. The contract shall include at least the conditions and cases under which the Company is entitled to ask its client to provide additional guarantees. That is besides procedures that the company may take if the client does not provide guarantees or settle transactions as stipulated in the contract. Also, the contract shall determine the commissions and expenses incurred by the company for implementing these transactions.

Upon signing the contract, the company shall submit a statement that include a definition of futures trading, procedures, benefits, risks and basic provisions. It shall send this statement to each client once a year and immediately after any amendments to the terms of the contract between them.

 

Within the framework of the Authority's efforts to activate what is known as "Short Selling" in order to raise trade volumes and values in the Egyptian market and increase the stock market's liquidity,

Dr. Mohammed Omran - FRA’s Chairman issued decision No. 684 of 2109 regarding granting license to Arqaam Securities Brokerage to short sell.
It is expected that technology structure required for activating this mechanism will be finalized in MCDR, brokerage firms and custodians soon. Short selling is a transaction in which the seller does not actually own the stock that is being sold but borrows it from the broker-dealer through which he or she is placing the sell order. The seller then has the obligation to buy back the stock at some point in the future, thereby making profits from the difference in selling prices and purchasing prices
It is worth mentioning that last February, FRA’s Chairman issued a regulatory decision no. (268) of 2019 on short selling rules to activate the mechanism. On the other hand, the Egyptian Stock Exchange and MCDR shall prepare and equip the automated systems and technical requirements and notify the Authority before activating short selling mechanism.

 

 

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