The decision of the Minister of Commerce and Industry, Muhammad Othman Al-Aiban, to form a committee to study proposals to remove obstacles to the development of the Kuwaiti capital market and to put forward proposals, mechanisms and necessary solutions, was criticized by the legal and economic circles.
Official sources in the Capital Markets Authority indicated to Al-Qabas that the decision may harm the independence of the Markets Authority and may cause the Authority to drop its membership in the International Organization of Securities Commissions (IOSCO), reports Al-Qabas daily.
The sources stated that the committee formed by the Minister of Commerce and defined its tasks will, in practice, carry out the original terms of reference for the Board of Commissioners of the Authority, in accordance with the law under which it was established, which is considered a direct interference in the core of its work, pointing out that the Commission’s law and its explanatory memorandum confirm the Commission’s financial and administrative independence by saying: “So that the Commission has financial independence that complements its administrative independence from the government,” noting that the outgoing Board of Commissioners exercises its powers until the issuance of the decree forming the new Council of Commissioners.
The sources indicated that there were many shortcomings that marred the decision of the Minister of Commerce, including the following:
— The decision is considered as an infringement on the competence of the Authority, which is defined by its law, which is considered a special law.
— The Authority is considered a quasi-judicial oversight body and it is not permissible to interfere in its work.
— The development of the market is proceeding according to a timetable in cooperation with the Stock Exchange, the clearing house, brokerage firms, the Central Bank, the Federation of Banks and the Federation of Investment Companies.
— The authority of the minister over the authority is supervisory and does not exceed the nomination of new commissioners and the issuance of a decision granting the status of judicial officers to the employees of the authority and handing him the annual report according to the dates specified by the law.
— The Commission has a strategy that it announced in early April, which includes all the points it was assigned to.
— The Authority has a tripartite committee with the stock exchange and clearing house concerned with developing the market.
— There is a committee to develop the market within the Authority headed by the Vice Chairman of the Board of Commissioners.
— There is a four-stage market development plan, which is close to completing the third phase, and it is part of the Authority’s 2023 operational plan.
— One of the articles requires the submission of documents related to the commission’s work, which is in violation of Article 150 of the law, which states that all the commission’s documents are confidential.
— The scope of work of the committee is found in Article 3 of the Capital Markets Authority Law (Objectives), which is considered negative for the authority’s competencies.
— One of the committee’s competences is to submit a proposal regarding the possibility of unifying corporate governance rules for all regulatory authorities… Isn’t the Authority a supervisory authority?! Noting that the body is classified as the first among the independent government agencies, according to the report of the State Audit Bureau and other reports.
— Is it permissible to interfere with the organizational structure of a body that is not originally subject to the Civil Service Bureau?
— Although one of the drawbacks to the decision of the Minister of Commerce is the absence of the Capital Markets Authority within the formation of the committee, the law prohibits the Authority’s employees from working or being seconded to any other party, in addition to exercising its competencies through the Board of Commissioners.