A provision of practicing any activity of security activities in Kuwait State is to grant a license from the Money markets authority to practice it, it is allowed for one legal person according to the executive regulation of law No.7 for the year 2010 to grant a license for practicing one or more activity of the security activities, but it is an exclusion for the Money markets authority to prevent combining licenses between some activities.

Also, in all cases the authorized person should separate between the various licensed activities processes, except for the two activities of: Investment portfolios management by the authorized person, and collective investment system establishment and management.

Requesting the License for Security Activity Practicing

The person who desires practicing any of the security activities, or his legal representative, or the company founders should submit a licensee request according to the prepared license request form.

The license request of the security activity practicing should be submitted including the following information and documents:

1. The license requester’ name, his address, his identity (Id) number, and if he was a natural person, or the commercial registration (CR) number if he was a legal person.
2. Working plan including all of the shown details in the license request form.
3. Determining the security activities that he desires to practice.
4. A statement of the issued and paid-up capital for the company which will practice the requested activity.
5. A statement about the shareholders whom their possessions reach a percentage of 5% or more in the capital of the company which will practice the activity.
6. A copy of the contract of the company which will practice the activity, and any amendments was edited by it.
7. Nominating requests of the occupants and employees due to registration according to the application for nomination of positions and jobs required for registration form, in accordance with efficiency and integrity instructions mentioned in annex (10) of the fifth book of the executive regulation for the law No.7 of the year 2010.
8. Sufficient information about any actual control on the company that will practice the activity.
9. Any external parties’ agreements or measures.
10. The audited financial statement for the last three years before submitting the request, also a discretionary budget about the future financial forecasts for the next three years for the company which will practice the activity.
11. The central bank approval, if the license requester is one of the units subject to the supervision of the central bank.
12. A legal advice from the external consult office for the company about the cases or group of cases that have essential effect on the company’s financial position, whether they were for the company or against it, and its affiliated companies, and those cases amounts if it could be estimated.
13. Signed endorsement from the company’s founders that it wasn’t released against them – during the five years prior to the license application – definitive decree of bankruptcy, or condemnation by a definitive decree in a violation of honor or honesty, or a detentive penalty in any of the violations stipulated in the Money markets authority establishing and security regulation law or another law, unless they were discharged.
14. An endorsement from the applicant that the information mentioned in the request, attached documents, are all correct and complete, in addition to any other endorsement required by the authority.
15. A receipt of payment of the application fee.
16. Any exemptions may be requested by the applicant from any requirements and its justifications.
17. Any other information or documents required by the authority.

Besides, the authority is allowed to exempt the licensee requester of some requirements or to impose any other requirements, due to the type of license requested activity.

Deciding on License Application for Security Activity Practicing

The Money markets authority revises the license request, it has the right to announce the applicant by necessity of presenting any additional information or documents to make sure that the company which will practice the activity has the following:

1. Ability and efficiency required for practicing the requested activity.
2. Adequate resources for practicing the requested activity.
3. Administrative expertise and technical resources, systems, sufficient operational policies and procedures for practicing the license requested activity.
4. The occupants and employees due to registration are fulfilled by necessary qualifications, skills, and experience stipulated in the third chapter of the fifth book of the executive regulation for the law No.7 for the year 2010.

In the case of failure of the applicant to submit the required documents and information through the period determined by the authority at the announcement, without accepted justification by the authority, the request will be considered null and void.

The authority limits the minimum of the paid capital to the authorized person according to every security activity requested for a license, and determines the legal form for the company which will practice the activity, according to the shown table in the annex No. (1) of the fifth book of the executive regulation of law No.7 for the year 2010.

Also, the authority decides on the license request through three months from receiving the application fulfilled by all of required information and documents.

It is also allowed to the authority to take one of the following decisions regarding the license request:

1. Licensing of some or all the security activities required for practice in the license request.
2. Issuing of a conditional pre-approval by completing a certain procedure, or fulfilling a specific criterion, through the period determined by the authority, it is also permitted to the authority to extend this period whenever it is deemed necessary.
3. Rejecting the license request.

Besides, the authority announces the applicant by its decision on the application related to this request, in the case of rejection, it must be by a substantiated decision.

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To book an appointment or request legal advice about the duties of securities companies in the optimal implementation of clients’ orders, we are pleased to receive your inquiries at (info@Taqneen.com).