What are the Conditions and measures for marketing a collective investment system founded outside the State of Kuwait?

The answer to this question is given by the Capital Markets team at RHR Law Firm.

According to the executive regulations of Law No. 7 for the year of 2010 concerning the establishment of the Capital Markets Authority and the regulation of Securities Activity, units in the State of Kuwait for a collective investment system established outside it may not be marketed unless permission from the Capital Markets Authority is obtained. This permission is granted after the following conditions and controls have been met:

1. An application for marketing a collective investment system established outside the State of Kuwait shall be submitted in accordance with Annex No. (1) of Book Thirteen (Collective Investment Regulations) of the Executive Regulations of Law No. 7 of 2010, provided that the application is accompanied by all documents and information specified in this form. The prescribed fee shall be paid and submitted to the Licensing and Registration Department.
2. The Collective Investment Scheme should be licensed by a foreign supervisory authority under regulatory standards and conditions that are at least comparable to those used by the Capital Markets Authority.
3. That the units of the Collective Investment System in the State of Kuwait be offered privately to a professional Customer.
4. Securities and promotional materials relating to a collective investment system established outside the State of Kuwait shall not be announced unless in accordance with the promotional advertisement controls stipulated in Chapter Seven of Book Eight (Business Ethics) of the Executive Regulations of Law No. 7 of 2010, and only to the persons concerned. By means of a private offering, provided not using the general means of advertising available to the public.
5. Units of the Collective Investment Scheme should be made available in Kuwait through a subscription agent or manager of a Collective Investment Scheme licensed by the Capital Markets Authority.
6. He must comply with any additional conditions and controls imposed by the Capital Markets Authority.

In any of the following circumstances, the Capital Markets Authority may revoke the marketing authorization for a collective investment system established outside the State of Kuwait:

1. If it appears that any of the permission-granting conditions have not been met.
2. If the goal is to protect the system’s participants’ interests.
3. If the investment manager, controller, or secretary violates any of the provisions of Law No. 7 of 2010, and its executive regulations, or submits to the Capital Markets Authority incorrect, inaccurate or misleading information.

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