CMA sets timeframe for third phase of Boursa Kuwait development
KUWAIT: The Capital Market Authority (CMA) announced the timeframe for the third phase of the market development project before the end of 2019 during a press conference held yesterday at the CMA headquarters. Both the Kuwait Clearing Company and Boursa Kuwait participated in this conference, as they are the main partners in the project of developing the market. This project is supervised by CMA, which is in charge of developing the stock exchange and verifying investment tools and products.
CMA will execute the third phase in two installments. “The first installment will include offering new products, in addition to improving the methods of trading. Testing of the first installment will start on January 2, 2019 and end by February 3, 2019. If it is successful and no obstacles are found, the new products will be launched in March 2019. Testing of the second installment will start on May 26, 2019 and is expected to end on September 26, 2019,” noted Muthanna Al-Saleh, Head of the Markets Sector at CMA.
The first installment will include various new initiatives. “These will include the complete use of stock lending and borrowing (SLB) and applying short sale conditional on the application of borrowing shares along with improving off-market trade, introducing an afterhours trading session, during which the closing price is traded, and improving the investment fund trading platform,” he added.
The second installment will include initiatives that need more time to prepare. “We should make sure that all parties are ready for this phase. Giving time to prepare this phase will ensure its proper application due to the changes, especially those related to central counterparty clearing (CCP) and using the qualified broker form,” explained Saleh.
Testing the second installment that will start on May 2019 will include applying new initiatives. “These include changing the way of cash settlement through following the DvP-2 system (net cash - total shares), applying CCP, qualifying brokers, trading on margin by qualified brokers, repurchase agreement (repo), and dividing client’s accounts into subaccounts and numbering them, along with connecting it to the system,” he added.
CMA, Boursa Kuwait and Kuwait Clearing Company will all hold workshops with participants in the third phase to discuss the details of what will be applied. “Two phases of the market development project were applied, as the first phase took place on May 2017 and the second on April 2018. These two phases caused the upgrading of the stock exchange to and emerging markets one at FTSE Russell, MSCI, and S&P Dow Jones,” concluded Saleh.
Khaled Al-Khaled, CEO Boursa Kuwait, said that the bourse is supported by CMA and Kuwait Clearing Company, which makes it able to execute the development plan in all its stages in the best way. “The afterhours session will be only five minutes long, and will allow local and foreign investors to trade on the market,” he explained.