With the Kuwait Stock Exchange revising listing requirements, attracting oil companies, and opening new avenues for public-private partnerships, investment sources are urging regulators to reconsider the process for delisted companies.
Rather than forcing these companies to repeat the full, costly listing process, they propose the creation of a clear and fair mechanism to allow their return from the Over-the-Counter (OTC) market once concerns are resolved, reports Al-Jarida daily.
The relisting process, under this proposal, would be distinct from new listings. It would reward companies that have addressed regulatory issues and passed general assembly approvals, offering economic and legal benefits to all parties: the stock exchange, regulators, investors, brokers, and banks.
Key arguments in favor of facilitating the return of delisted companies include:
- Re-incentivizing compliance: Giving companies a path back motivates them to resolve regulatory issues.
- Market enrichment: The OTC market holds dozens of viable, well-performing companies that are stronger than some currently listed firms.
- Investor protection: Allowing returns safeguards shareholder rights and offers legal alternatives to costly court battles.
- Banking relief: Mortgage-backed shares of delisted companies lose value in the OTC market; re-entry stabilizes guarantees.
- Liquidity and confidence: OTC is a stagnant platform. Allowing returns boosts market liquidity and investor options.
- Market growth: Up to 30 companies could rejoin the official market, expanding its depth and activity.
- Efficiency gains: A streamlined return process improves regulatory efficiency and reduces litigation.
- Public interest distinction: A company delisted due to issues and one that withdrew voluntarily must be treated differently.
- Judicial relief: Avoiding mass shareholder lawsuits (potentially thousands) will ease the burden on Kuwait’s judiciary.
- Regulatory balance: Many delisted firms already meet core requirements, needing only procedural resolution of prior issues.
The call is clear as the stock exchange seeks flexibility and growth, the delisted companies file must be reevaluated, enabling a controlled, fair, and simplified pathway for return — ultimately strengthening Kuwait’s capital markets.
