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Monday, April 15, 2024

Launch Partners

Capital Markets Authority of Kuwait amends bylaws regarding sustainable finance controls

Kuwait’s Capital Markets Authority (CMA)’s board of commissioners has introduced a package of legislative additions and amendments related to the controls of sustainable finance on the 27th August 2022. The amended bylaws are a response to the growing global attention on sustainable finance and ESG-related topics. The legislative additions and amendments relate to the modules of the Executive Bylaws of Law No 7 of 2010 Regarding the Establishment of the Capital Markets Authority and Regulating Securities Activities.

The amendments include the addition of the definitions of ‘Sustainability’ and ‘Sustainable Fund’ in Module 1, the addition of optional sustainability factors in the risk management systems of the licensed person in Module 6, the addition of articles that determine the sustainability report regulations for listed companies in Module 12, the addition of the ‘Sustainable Fund’ and setting the investment controls of this type of fund in Module 13 and the inclusion of the sustainability issues in the role of the board of directors and the company’s comprehensive strategy in Module 15.

The amendments to the bylaws, which are line with Kuwait Vision 2035 with the long-term vision of sustainable development, will likely create fertile soil for the establishment of sustainable funds under the purview and regulation of the CMA. Moreover, it signals not only a market-driven demand for sustainable financial products, but also a regulatory top-down push toward the development of sustainable financial products, both Islamic and conventional, specifically in the realm of funds and asset management.

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