RIYADH: Kuwait has introduced a central counterparty clearing framework, upgraded brokerage standards, and streamlined settlement systems as part of a sweeping reform to modernize its capital markets and boost investor confidence.
The measures, launched as part of the second stage of Phase Three of the Market Development Program, include introducing sub-account numbering to enhance transparency, as well as upgrading IT infrastructure to support future listings of exchange-traded funds and fixed-income instruments such as bonds and sukuk, according to a press release.
Led by Kuwait’s Capital Markets Authority in coordination with Boursa Kuwait and the Central Bank of Kuwait, the reforms aim to align the country’s financial market infrastructure with global standards while reducing risk and enhancing market depth.
The Market Development Program is a strategic initiative under the country’s Vision 2035 plan, aimed at diversifying the economy, enhancing private sector participation, and modernizing key sectors such as finance, infrastructure, and technology.
Mohammad Saud Al-Osaimi, CEO of Boursa Kuwait, said: “The launch of this phase reflects our unwavering commitment to developing an advanced, efficient trading environment that meets the highest international standards.”
A Kuwaiti man sits on a bench outside the Kuwait Stock Exchange. File/Reuters
He added: “It is the product of close collaboration across the capital market apparatus and represents a key step in expanding the depth, transparency and resilience of Kuwait’s capital market.”
Boursa Kuwait Chairman Bader Nasser Al-Kharafi said that the collaboration has played a vital role in advancing market infrastructure and introducing sophisticated products and services that promote a more transparent and dynamic investment environment.
He added that these efforts are essential to attracting capital, generating added value for the national economy, and supporting the diversification of income sources.
The measure introduced several key reforms, including the implementation of a Central Counterparty Framework to reduce settlement risks and align clearing processes with global standards.
It also streamlined cash settlements through the KASSIP system, facilitating smoother transactions via local banks and the Central Bank of Kuwait. Additionally, brokerage firms were upgraded to “Qualified Broker” status to enhance market structure, while sub-account numbering was introduced to improve transparency under omnibus accounts.
Furthermore, IT infrastructure upgrades were made to prepare for the introduction of ETFs and fixed-income trading, including bonds and sukuk, pending necessary legislative changes.
This phase marks one of the most significant overhauls since the privatization of Boursa Kuwait, reinforcing the market’s role in driving economic growth.
“We greatly value the remarkable efforts that have driven the various phases of the Market Development Program for Kuwait’s capital market, a reflection of the power of constructive cooperation between the public and private sectors, which stands as a national model for realizing economic objectives and development ambitions rooted in innovation and professionalism,” Al-Kharafi said.
The CMA and Boursa Kuwait reaffirmed their commitment to further developing the market’s infrastructure, supporting sustainable growth, and reinforcing Kuwait’s status as a premier investment destination.
Privatized in 2019, Boursa Kuwait operates one of the GCC’s oldest exchanges, driving market modernization and emerging-market reclassification.
