Deferral Of Material Information Disclosure

Is it permitted to a company listed on the Kuwaiti Stock Exchange to delay disclosing material information to the Stock Exchange and the Capital Markets Authority?

In accordance with the executive regulations of the law establishing the Capital Markets Authority and regulating securities activity, the team of money and stock market lawyers at RHR Law Firm answers to this question.

To begin with, material information refers to any information held by the listed company, listed fund, issuer, or obligor – as the case may be – related to its activity, person, financial position, or management, and its knowledge is not available to the public or dealers, and has an impact on its assets, liabilities, financial status, or general course of business. It may cause a change in the price or trading volume of the listed security, as well as an increase or decrease in the number of dealers interested in the security, or it may have an impact on the issuer’s ability to meet its obligations.

  1. If disclosure of material information would harm the confidentiality of negotiations or preliminary procedures for a transaction carried out by the listed company or any other operation, the listed company may defer disclosure until a binding agreement is reached regarding this transaction or operation, provided that:
  2. The deferral of disclosure should not be for the purpose of misleading regarding the facts and circumstances of which knowledge is required.
  3. The listed company shall take all measures to maintain strict confidentiality regarding the material information, until its disclosure.

In this case, the listed company must maintain strict confidentiality with regard to the material information, by taking all measures to ensure that access to such information is limited to specific persons with the listed company, and that such information is not disclosed to employees and others except within the necessary limits. to perform their duties.

  1. That the listed company, after disclosing the material information, present the justifications that prompted it to defer the disclosure. If the Capital Markets Authority finds these justifications unacceptable, it may take disciplinary measures against the listed company. The listed company may consult with the Authority before deferring the disclosure to determine the validity of the deferral of disclosure.

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