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Listing securities on the Kuwait Stock Exchange (KSE) involves navigating a comprehensive framework of legal regulations designed to ensure transparency, fairness, and integrity in the market. The key governing documents include Part Twelve of the Executive Regulations of Law No. 7 of 2010, Section Two, and the Exchange’s Rules, Section Seven.
General Conditions for Listing
To qualify for listing, a company must be incorporated as a joint-stock company, and its shares should be freely tradable without restrictions that prevent all shares from being actively traded or transferred among investors, as stipulated in Section Seven.
Conditions for Listing in the First Market
A company seeking to list in the First Market must have a minimum fair value of KWD 45 million for its shares not owned by the controlling group, as determined by a licensed appraiser or investment advisor. It must also have at least 450 shareholders, each holding shares valued at no less than KWD 10,000 based on the fair value. Additionally, the company should be engaged in at least one of its main declared business objectives, with most of its revenue derived from these activities, supported by audited financial statements for the last seven fiscal years. The Exchange may recommend waivers for this requirement with justified reasons.
Conditions for Listing in the Main Market
For the Main Market, a company must have a minimum fair value of KWD 15 million for shares not held by the controlling group. It needs at least 450 shareholders, with each holding at least KWD 5,000 worth of shares at the fair value, or at least 225 shareholders, each holding shares valued at no less than KWD 10,000.
Listing Procedures
The process begins with the appointment of a licensed Listing Advisor who submits the application using a designated form. The application, along with a prospectus approval request, is then reviewed by the Exchange, which issues a recommendation to the Authority within 30 days. The recommendation can be to approve, approve conditionally, or reject the application due to non-compliance or unpaid fees, with prior notice to remedy deficiencies.
Once approved, the company is required to sign a membership agreement, pay the applicable fees within 30 days, and prepare for the start of trading. The company must also sign the agreement within three days before trading begins. The Exchange may amend this agreement with prior approval, and the trading date will be scheduled accordingly.
Supporting Documentation
The company must submit several documents, including Articles of Incorporation (and amendments), commercial license, financial statements for the last three years, and declarations from the Board affirming adherence to Exchange rules. Additional requirements include a shareholder register, evidence of appointment of the listing advisor and compliance officer, a list of major shareholders, and proof of fee payment.
Terms and Conditions
The company can issue shares via public offering or private placement, following the timing and regulations set by the Authority. No preferential terms are permitted unless approved by the Authority.
Conclusion
Successfully listing on the Kuwait Stock Exchange is a meticulous process that requires strict adherence to regulatory standards but offers substantial benefits through enhanced visibility and access to the investment community.
ASAM & Partners is pleased to offer its assistance with any requirements or activities related to the listing process. Whether it involves providing legal counsel, support with documentation, or comprehensive, end-to-end services, our experienced team is prepared to guide you through each stage of the process with professionalism and expertise.
