Investment advisor licensing rules do not apply to the majority of individual equity analysts
Regulatory sources said the number of accounts and websites that violated the controls established by the Capital Markets Authority regarding stock analysis and financial advisory increased and involves about 54 bodies, including different accounts for companies and individuals.
The sources said that the authorities that have been monitored exceeded the standards regulating financial advisory established in accordance with Law No. 7 of 2010 and its executive regulations and their amendments, pointing out that the regulatory channels at the CMA constantly monitor the movement of traded shares and the accounts that are active from time to time.
The sources revealed there are unlicensed companies operating from outside Kuwait that are being scrutinized and legal measures taken against them in coordination with the concerned authorities in those countries.
The sources stated that the recent rules approved by the KMA to regulate the work of financial advisory services for individuals and analysts have not found any interaction so far, whether by analysts of communication sites or companies that have been observed violating the rules, stressing that the Authority has adopted controls for licensing the investment advisor, but some of the regulated articles face criticism from a wide range of analysts.
Despite the expectation of “Social Media” analysts to issue rules that legitimize their activities and services, their observations emerged regarding what the authority approved, including that the activity be through a one-person company as a legal entity for the investment advisor’s activity with a capital of 30,000 dinars.
The sources explained that the rules do not apply to the vast majority of individual analysts, especially since the services they provide are directed to small traders for free, and the controls do not allow the analyst to charge individuals for that service, and if so, the market is no longer favorable to it in light of the continuous declines of popular stocks.
