Companies suggest to CMA the implementation of 10 procedures to ensure the protection of trading and settlement without any violations
Informed sources revealed that some companies operating in Boursa Kuwait, proposed the introduction of new procedures and various levels of protection to the trading system, to ensure the smooth continuation of transactions and proper settlement without violations or risks that may threaten the market’s development. The proposed procedures obtained by “Al-Rai Newspaper” included the following:
1. Provide mechanisms to enable brokerage firms to book shares to be sold by foreign clients trading on the bourse through custodians. A special system connected the custodian should be used to ensure that shares are not sold more than once and that the shares are actually available in the account.
2. Develop more effective and technologically advanced communication methods between Kuwait Clearing Company (KCC) and brokerage firms to report trade rejection issues by the custodian, besides the mechanism currently applied in the market, which depends on using email (sometimes interrupted by poor communication and emails might not be received due to technical issues) .
3. Determine the reasons for trade rejections through the capital market trading system, stressing on the importance of obligating the responsible parties to sign agreements, so that CMA may determine those reasons and issue binding procedures to all parties involved.
4. Introduce a new mechanism that would allow the partial trade rejection, with an aim to mitigate risks to the brokerage sector, which is always negatively impacted by such controls.
5. Impose restrictions on custodians so that they are not allowed to reject transactions for simple reasons, which sometimes expose brokerage firms to significant financial risks.
6. Redistribute the risks among registered brokers in a more comprehensive way.
7. Grant foreign customers who trade through international and local banks and financial institutions a longer grace period to settle their deals, especially if it involves foreign bank transfers which may sometimes be disrupted due to procedures.
8. Apply a mechanism so that transactions executed through the trading system «X-stream», when it is possible to prove that the funds have been transferred, even if it was delayed, assuming good faith in such cases.
9. Provide new mechanisms that will quantify the volume of financial failures.
10. Achieve strong protection to shield the market from the possibility of facing future failures.
مصدر الخبر: Alraimedia