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Stock exchanges

Article 31

A stock exchange refers to the market dedicated to reconciling offers and purchase orders in securities, follows procedures for trading and performs the functions normally performed by financial markets.

Article 32

No person may establish, operate or assist in the establishment or operation of a stock exchange except after obtaining a license pursuant to this Law and in accordance with the regulations and rules adopted by the Authority. The Authority shall exclusively issue such license and shall be published in the Official Gazette.

Article 33

A stock license may only be granted to a joint stock company whose capital shall be determined by a resolution of the Board of Commissioners. Its activity shall be limited to the operation of the stock exchange, provided that its shares shall be allocated as follows: 1- 50% to be auctioned between companies registered in the Kuwait Stock Exchange distributed in tranches. Each amount is 5% – and the auction is awarded to the one who offers the highest share price above its nominal value plus establishment fees – if any. 2- 50% of the shares are allocated for public subscription to all citizens. 3. Transfer of the increase resulting from the sale of shares in accordance with the provisions of item (1) of this article to the general reserve of the State. 4. The Commissioners in charge of establishing the company shall determine its capital and distribute all the shares allocated for public subscription equally among all Kuwaitis registered in the Public Authority for Civil Information on the day of subscription and without allocation for the fraction of the shares. No interest, fees or any increase over the share price at the date of subscription, no later than the day after the expiry of sixty days calculated from the first of the month following the month in which the Authority invites citizens through the media. Kuwaiti read, audio and video to pay the value of subscriptions owed to them. Fractions of shares not allocated to citizens shall be transferred to the State as of the day following the expiry of the date fixed for the payment of citizens for the value of these subscriptions. All shares in which citizens have not paid their value to the State during that date for any reason. 6 – The State may put the shares assigned to it in accordance with the preceding item by public auction in tranches not exceeding 5% of the company’s shares. 7. In all cases, no natural or legal person other than by inheritance may own 5% of the company’s shares directly or indirectly.

Article 34

The Executive Regulation of the Law shall determine the procedures, rules and regulations that the licensed Stock Exchange shall follow to deal and transfer the ownership of Kuwaiti securities not listed on the Exchange.

Article 35

A member of the Board of Directors of the ASE, as well as to continue to hold this position, shall meet the following conditions: 1. He should not have been convicted of an offense involving dishonesty or dishonesty. He shall not be declared bankrupt. 3. To be of good reputation. He must have sufficient experience in financial, economic and legal affairs in accordance with the rules and regulations issued by a decision of the Commission.

Article 36

The ASE shall be managed by a Board of Directors which shall be formed as follows: A Chairman and a Vice-Chairman to replace him in his absence and six members to be elected by the General Assembly of the Company after the approval of the Board of Commissioners of the Authority. The Chairman of the Stock Exchange or his representative shall notify the Board of Commissioners of the names of the candidates for membership of the Board of Directors of the Stock Exchange at least thirty days before the date of the General Assembly of the Company to elect the members of the Board of Directors. The Board of Commissioners may, within fifteen days of notification, object to a reasoned decision against any of these candidates for lack of required conditions. Such objection shall result in the exclusion of the candidate for membership in the Board of Directors. A candidate who has not been notified by the Board of Commissioners or the candidate objected to in accordance with the provisions of this Article shall not be presented to the General Assembly of the Stock Exchange.

Article 37

The Chairman of the Stock Exchange shall act as the Executive Director by executing the decisions of the Stock Exchange, supervising all technical and administrative bodies and representing the Stock Exchange before the judiciary, in accordance with the Stock Exchange’s legal system.

Article 38

The ASE shall: 1. Ensure a fair, transparent and efficient stock market. 2. Ensure that there is a conscious management of risks related to its business and operations. 3 – to provide the public interest in the event of conflict with the interest of the Stock Exchange or its members or shareholders or management. 4. Commit to the provision and operation of its services in accordance with the rules and regulations determined by the Commission. 5. Commit to regulate its operations, standards of practices and the conduct of its members in accordance with the ASE rules, policies and procedures. 6. Commit to regulate the operations and standards of the practices of listed companies and their employees in accordance with the regulations governing them. 7. Commit to provide its services in accordance with the latest technology, applications and automated systems in accordance with international standards approved by the Commission or those decided by it. 8. Maintain the confidentiality of all information in its possession with respect to its members and customers, except as required by law or regulations to be published or disclosed. It may not disclose such information except to the Commission or by order of the judge. 9. Compliance with the instructions issued by the Authority.

Article 39

The Stock Exchange Company shall promptly notify the Authority of the following: 1. If it finds that one of its members is unable to comply with any of the rules of the Stock Exchange or controls the financial resources. 2. If it assesses the existence of financial irregularity or any other matter that may indicate a member’s inability or inability to fulfill its obligations. 3. Any disciplinary action taken against a member or his or her employee.

Article 40

The Board of Commissioners of the Authority may request the Stock Exchange to prepare specific rules in its field of work or to amend them within a certain period. If the ASE does not comply with the request or within the time limit specified for the application, the Authority may, on behalf of the ASE, prepare or amend the rules and commit them to costs.

Article 41

No rules issued by the ASE or any amendment thereto, whether by withdrawal, replacement, alteration or addition to the ASE, shall be effective unless approved by the Authority. The ASE shall submit to the Authority the reasons and objectives that have prompted it to propose or amend these Rules, and shall indicate the desired effects.The Authority may, accordingly, decide whether or not to approve or modify them and notify the ASE of its decision within a period not exceeding three months from the date of notification of the proposal.

Article 42

A committee shall be formed in the Stock Exchange to look into the violations committed by one of its members. The Committee may impose the following sanctions: 1. Warning. 2. Issue an order to the violator to cease committing the violation. 3 – subjecting the violator to more control. Suspension from work or practicing the profession for a period not exceeding one year. 5. Imposing restrictions on the activity or activities of the violator. 6 – Cancellation of transactions related to the violation and the effects of the effects if possible. Stop trading a security for a specified period of time.

Article 43

The ASE shall notify the Authority of any disciplinary action taken against any of its members, the details of the violation, the actions taken and the part signed. The Authority may, by a decision issued by it or upon a grievance filed by the complainant within fifteen days from the date of being notified in writing of the decision, refer the matter to the Disciplinary Board for review of the disciplinary procedure in accordance with its approved review system.The disciplinary board may approve, amend or cancel the ASE decision by a reasoned decision.

Article 44

In the event of disasters, crises and disturbances that may have a severe impact on the market, as well as in the case of some traders suggesting misleading references or signals, the Authority shall have the broadest authority to issue instructions aimed at restoring fairness, transparency and efficiency to the market and, in particular, may take any of the following measures: Stop trading on the Stock Exchange, or any securities listed for a temporary period. 2. Cancel trading for a specified period of time or cancel transactions on a particular stock. Issue decisions to liquidate or reduce all or part of the balances. 4- Modifying trading days and hours. 5. Amend or suspend any of the ASE rules.

Article 45

In case the ASE does not comply with the decisions or instructions of the Authority issued pursuant to its authority prescribed in the preceding Article, the Authority may take such action as it deems appropriate to achieve regular trading or liquidation of any position relating to securities.

Article 46

The Authority may, by written notification to the Exchange, cancel the license granted to it as of the day specified by the Authority’s decision, in the following cases: 1. If the Company loses one of the conditions which qualified it to obtain the license. 2. If the stock exchange stops for more than five working days. 3. If it is closed. 4 – If it does not comply with the instructions of the Commission despite the Commission’s alert to them. 5. If the Authority has not provided the information you requested or provided incorrect or misleading information. The Authority shall publish the decision to cancel the license and its reasons in the Official Gazette.

Article 47

The Authority may give the Company a specific deadline on its own initiative or extend the time limit granted to it after the date of revocation of the license if the Authority deems it to be in the public interest, or at the request of the Stock Exchange until the closure of operations therein, or to deliver its activities to another licensed stock exchange.

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