How Does The Kuwait Stock Exchange Deal With Unusual Trading Activity?‎

What Should The Kuwait Stock Exchange Do in The Case of Existing Unusual Activity in The Security trading for a Listed Company? And What Are The Rules Followed by The Listed Company in The Case of Unusual Trading Activity Existing?

The answer to this question is being declared by the team of capital markets lawyers at RHR for advocacy and legal advices.

The executive regulation for law No. 7 for the year 2010 declared about establishing Money markets and security activity regulation authority that is in case of unusual activity in security trading for a certain listed company in terms of stock price or trading volume, the stock exchange should announce this listed company of the necessity to comment on this as follows:

Firstly: If the listed company determined that the unusual trading activity dues to material information which was declared previously according to the followed system, the matter needs re – disclosing it including to declare any evolutions would be intervened on the material information which was previously mentioned.

Secondly: If the unusual trading activity dues to speculations, or news, or rumors, or common information, the listed company should comment on those information – immediately – by explaining or confirming or denying it immediately without delay according to rules for the timing of disclosure of material information and those are:

  1. If the information is available through the working hours of the Money markets authority and Kuwait stock exchange it should be disclosed as soon as the availability of the material information, with all necessary precautions taken not to leak information before disclosing it.
  2. If the information is available outside the working hours pf the authority and stock change, disclosure should be before fifteen minutes from the beginning of the next trading session from the availability of the material information.

Thirdly: If the unusual trading activity results from material information leaking which the listed company has never disclosed before or it decided to delay disclosing it according to material information disclosure delaying rules, the listed company should immediately disclose the material information regardless of how appropriate making such disclosure with the listed company interests.

  1. If the listed company is unable to determine the reason which led to unusual trading activity occurrence, it should publish a public announcement constituting that there were no evolutions recently happened which could affect the listed company or its affairs in the manner that results in this unusual activity in trading.

And in all cases the Money markets authority is permitted to issue instructions for the Kuwait stock exchange of the necessity of informing any listed company by the necessity of commenting on unusual trading activity on the company’s security, and it has also the right to inform the listed company directly.

It is also permitted for the Kuwait stock exchange or the Money market authority in the unusual trading activity to pause – temporarily – the security trading for the listed company along besides taking procedures that it looks convenient according to the law No. 7 for the year 2010 and its executive regulation.

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