The list includes 23 delisted and voluntarily withdrawn companies
88 companies to be traded through the OTC platform
Informed sources told Al-Jarida Newspaper that 88 unlisted companies were selected to be traded on the OTC platform, scheduled by Capital Markets Authority (CMA) to be launched on 18 November 2018.
The sources pointed out that the list of companies whose shares will be traded through the OTC platform included 23 companies that were delisted as a result of non-compliance with CMA’s regulations and the provisions of law No. 7 of 2010. Meanwhile, the remaining companies voluntarily withdrew from Boursa Kuwait, noting that the OTC market aims at pricing the stocks in a fair and transparent manner, rather than trading in the unregulated market which is a primary platform for listing companies; including family, government and private corporations, in which trading will be replaced by an ask/bid automated system to ensure transparency to all related parties.
Sources said that Boursa Kuwait Company has adopted the classification of unlisted companies to be traded on the OTC market based on the number of shareholders. Companies with more than 50 shareholders will be traded on Boursa Kuwait through two options, as per the company’s discretion. The first option allows all OTC listed companies to trade through special deals, i.e. transactions entered between the parties, the second option will be limited to companies with fewer than 50 contributors, to allow the execution of transactions through the buy and sell platform on the exchange.
Sources explained that Boursa Kuwait Company received official approvals from the Boards of Directors of these companies to trade their shares through the OTC platform, where it was notified of the companies’ interest to be listed on the OTC market, pointing out that currently, there are 88 companies offered for trading on the OTC market. Other companies would be added once they comply with the required standards and express their intentions to be listed on the OTC market at a later date.
The sources indicated that the OTC system is a new platform for all types of trading securities, which may result in profits and losses, and that the transfer of shares is carried out through registered brokerage firms, conforming with the OTC system’s rules. Investors are fully responsible for their investment decisions and any subsequent risks. It is also the investor’s responsibility to ensure the soundness of the company’s financial and legal position prior to trading its shares. Sources stated that the old system in the past was inadequate and lacked transparency, as traders had doubts in regards to the seriousness of buy and sell orders, the actual agreed price and collecting transaction proceeds.
Sources stressed that companies which refuses to register with Kuwait Clearing Company (KCC) shall not be allowed to trade their shares through the new or old systems, indicating that Kuwait Clearing Company has informed the Ministry of Commerce and Industry that all joint stock companies are required to register with KCC as a preliminary step to launching the OTC market.
The OTC electronic trading platform will be a starting point for trading bonds and sukuks in a transparent and free manner. This will maintain trading at a fair price, and subsequently reassure and encourage investors to trade within the regulatory framework of the OTC market.
مصدر الخبر: Aljarida