Boursa Kuwait unveils market making model

Market making tool to boost liquidity of shares

Khaled Al-Khaled

KUWAIT: Boursa Kuwait yesterday announced that it has issued detailed regulations on market making after the adoption of these regulations by the Boursa Kuwait Board of Directors. Market making is considered as a crucial tool that serves in boosting liquidity of securities listed in the stock market, as well as generally in enhancing efficiency of the market as well as in activating its tools.

Khaled Al-Khaled, Chief Executive Officer and Vice Chairman of Boursa Kuwait said: “Market making is a crucial part of stock exchange operations across the world.  It serves as an important tool to boost liquidity of shares by creating specific markets, thereby helping  improve the efficiency of markets and assisting in economic growth overall.  Applying market making principals to Boursa Kuwait is a major milestone towards developing the Kuwaiti capital market as a major regional trading hub, which will benefit Boursa Kuwait and the Kuwaiti economy in general.

“I would like to thank the CMA for their wise counsel, their guidance on this matter, their conscientious response to the market making model that was produced by Boursa Kuwait, and their efforts in amending regulations pertaining to the CMA Laws in a way that are aligned with this new model.

“I would also like to extend my thanks to Boursa Kuwait team for their dedication and efforts in creating the right legal and technical conditions in order to prepare for the launch of market making operations in Kuwait. A comparative and thorough case study was prepared in order to reach to the best model that fits international standards as well as the nature of Kuwaiti market,” he said.

Market Makers must first be licensed by the Capital Markets Authority before practicing their activities, then registered and meet criteria laid down by Boursa Kuwait.  Once registration is complete Market Makers will only trade in the specific security they are registered for, earning rebates which are based on meeting their various obligations.

Boursa Kuwait is a private entity that was established in April 2014, with the aim to take over and manage the Kuwait stock market and progressively transition its operations, while delivering on three main fronts; transparency, efficiency and accessibility.

Officially licensed on 3 October, 2016, Boursa Kuwait’s mission is to upgrade the exchange infrastructure and business environment to international standards and create a robust, transparent and fair capital market platform that services all relevant asset classes, whilst focusing on clients’ interests.  Its mission driven strategy focuses on developing the overall market status and addressing market needs through the provision of investment tools, restructuring the market to increase its competitiveness and liquidity, and attracting investments with a view to issue an IPO to Kuwaiti citizens.

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