Block Trading And Disclosure Requirements In Kuwait

Any sale of shares of a company listed on the Kuwait Stock Exchange ("KSE") amounting to 5% or more of the company's share capital must follow Kuwait's procedures for block trading as well as disclose such a transfer to the KSE.

Block Trading Decision

KSE Committee Decision No. 2 of 2006 (the "Block Trading Decision") states that any sale of shares amounting to 5% or more of a company listed on the KSE must be traded in accordance with the procedures listed in the Block Trading Decision as described below:

The seller submits to its broker share certificate(s) in cases where the Kuwait Clearing Company ("KCC") balance record does not indicate ownership of the relevant shares. The broker delivers the relevant share certificate(s) to the KCC upon its receipt from the seller and issues the same a statement of account from the KCC. Upon receipt of order to sell, the broker notifies the Trading Department of the KSE of all pertinent details. The Trading Department announces the upcoming deal along with all information relevant to the trade such as the share quantity and initial bid within five days prior to the suggested date of execution. The Trading Department reserves the right to determine the date and time which it considers suitable for the transaction. The purchaser presents a certified check constituting 10% of the trade value in the case where the purchaser's KCC account balance is insufficient to cover that amount. The percentage of calculation is based either on the closing price of the stock to be traded or its most recent ask price, if available, the greater of which will be used. The shares of the company are put up for auction and the transaction is executed by the end of the trading period to the highest bidder. The relevant broker issues a trade contract upon execution of the transaction and forwards copies of the same to the bidding broker, the KCC, and the Trading Department. The KCC deals with any settlement related obligations arising from the transaction and collects any payable commissions based on the price at which the trade was executed or the closing price of the relevant shares as of the contract date, the greater of which will be used. Sellers trading shares to an intended purchaser directly in accordance with the Block Trading Decision face the risk that the purchaser will not want to bid for the shares at auction. In this event, a seller may transfer the shares to the purchaser indirectly using a three-step process:

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