Kuwait regulator extends corporate governance deadline
Kuwait, May 2, 2014
Kuwait's market watchdog has extended by 18 months a year-end deadline for listed companies to comply with new corporate governance rules after realising that some firms would have struggled to be ready on time.
The Capital Markets Authority (CMA) issued the regulations in June 2013 and originally said they had to be implemented by the end of this year. It said on Wednesday that it was now giving companies until the end of June 2016 to implement them.
The rules include separating the positions of chairman and chief executive, prompt disclosure of information to the market, and establishing internal controls and risk management.
"The Capital Markets Authority is aware of constraints that may hinder some of the companies concerned from applying the rules of governance," the regulator said in a statement.
It urged companies to implement the rules, which it said would promote investor confidence in the Gulf state's financial sector. There are about 200 listed companies in Kuwait.
A Reuters survey of a dozen international fund managers in February found they ranked Kuwait lowest among five big Middle Eastern markets for corporate disclosure and enforcement of regulations against improper or illicit trading.
Some corporate executives and investors have welcomed the effort to clamp down on suspicious activities and potential conflicts of interest, and several major companies have changed their corporate structures accordingly.
Others, however, have complained that the CMA is leading a clumsy crackdown and increasing the amount of bureaucracy that companies have to deal with.-Reuters