Kuwait gives initial nod for bourse authority
Kuwait City, January 20, 2010
Kuwait's parliament on Wednesday initially approved a much-delayed bill to set up a stock market watchdog, in a move to boost transparency and attract more foreign investors.
The Opec member, home to the Arab world's second-largest stock market, is the only Gulf state which does not have a dedicated authority to supervise its bourse, which has been plagued with irregularities in prices and disclosure.
"It will add a big push to the economical path ... this law will place the Kuwaiti market on a par with the developed countries," Ahmad Al-Haroun, Minister of Trade and Industry, told parliament before the initial vote.
The 165-article bill calls for the creation of a regulator that would be monitored by the prime minister -- a clause that could be amended before the final vote.
Kuwait's parliament passed the draft law in the first reading on Wednesday but did not set a date for the final vote. After the vote, the draft will need the final approval of the cabinet and the ruler.
The authority will oversee initial public offerings, mergers and acquisitions and will have the power to impose fines of up to 100,000 dinars ($348,600) and prison sentences of up to five years, for violations.
It will have the power to halt or cancel trading in the bourse in case of crisis or unrest which could damage the stock market. The authority will also be able to do the same in the case of stock manipulation by traders.
The five members of the authority will be proposed by the prime minister, and the body will have to submit an annual report to him.-Reuters