Kuwait's parliament yesterday 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 second-largest Arab 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.
The 165-article bill, passed by a nearly unanimous vote, calls for the creation of a stock market regulator monitored by the minister of commerce.
The draft needs the final approval of the cabinet and the country's ruler before it takes effect.
The authority will oversee initial public offerings, mergers and acquisitions, and will have the power to impose fines of up to KWD100,000 (Dh1.2 million) 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 commerce minister, and the body will have to submit an annual report to him.Like other bourses in the Gulf Arab region, Kuwait's market says it is trying to crack down on abuses that for years helped deter foreign investment in its shares, although it has relatively little power to act.
Little corporate data has to be released and some firms leak market-moving news or even release their results first in the local press, late at night or over the weekend, to the dismay of investors.
Kuwaiti newspapers often carry unsourced reports, accurate or false, but officials rarely respond to requests for confirmation.
Shares of Kuwaiti telecoms firm Zain soared last year for weeks on fevered speculation.
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