- Activities Licensed to Clearing Agency
- Procedures of Authorizing a Clearing Agency
- Provisions of Authorizing a Clearing Agency
According to the executive regulation of the Money markets authority establishment and security regulation law, it is not allowed to any one to establish a clearing agency in Kuwait state, managing it, or assist in setting up and managing it, or announce its foundation, unless he is granted a license of a clearing agency issued from the Money markets authority, according to provisions and restrictions determined by the law and its executive regulation, also the license is being published at the official newspaper.
Activities Licensed to Clearing Agency
The Money markets authority is allowed to license to the clearing agency of practicing one or more of the following activities or services:
- Providing one or all of the services related to settlement, and clearing of securities with respect to payment, delivery, or both.
- Depositing securities within the central security depository system, transferring its ownership, registering of transactions related to it including buy and sell, its assignment, profits distribution, and other transactions.
- Any other services determined by Money markets authority.
In case of authorizing clearing agency by more than one activity of the latter, it should practice activities related to depositing securities within the central security depository system, settlement of securities systems, or central brokers, through corporates that have an independent financial liability, authorized from the Money markets authority.
Procedures of Authorizing A Clearing Agency
The clearing agency is authorized as follows:
- The clearing agency license request is submitted according to the form prepared by the Money markets authority for this purpose, while attaching all required documents and information by the request, and to pay the prescribed fee.
- The Money markets authority is allowed – at any time after receiving the license request fulfilled by requirements – to inquire additional information or documents as being necessary to decide the request.
- If the applicant failed to fulfill required documents and information during the time period determined by the authority at announcement, the request is considered null and void.
- The authority decides licensing a clearing agency request, after receiving the request fulfilled by all required information and documents, on provision for the license request approval that the clearing agency is capable of fulfilling all of requirements and obligations mentioned in the fourth book of the executive regulation of Money markets authority establishment and security regulation law, or any other requirements determined by the authority.
- The authority announces the applicant by its decision related to authorization request, and it is allowed to the authority to reject license granting because of public interest, also in case of license request rejection, the decision must be justificated.
Provisions of Authorizing a Clearing Agency
It is not permitted to grant a clearing agency license until fulfilling the following provisions:
- To be a stock corporation.
- To provide guarantees inquired by Money markets authority.
- To provide one or more of the services dedicated to clearing agency.
- Any other provisions determined by Money markets authority.
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