KUWAIT Law and Practice Contributed by: Yousef Al Shereedah, Abdulrahman Al-Roumi and Bashayer Al-Tuwais, International Counsel Bureau – Lawyers and Legal Consultants
Anti-Money Laundering Law The AML Law sets out the general and specific anti-money laundering and terrorism financ - ing rules applicable to entities including banks. Please refer to 5. AML/KYC for more informa- tion on the applicable compliance regime estab - In light of Kuwait’s acute shortage of housing properties and the drastic inflationary trend of the value of real estate, Kuwait recently enacted Law No 126 of 2023 concerning Combating Vacant Residential Lands Monopoly Law (the “Lands Monopoly Law”). This law contains pro - visions on the banking sector’s role in the hous - ing market. Further details on this legislation are provided in 2. Authorisation . lished by the AML Law. Other applicable laws 2. Authorisation 2.1 Licences and Application Process Licensing Requirements for Banks For a bank to operate in Kuwait, it needs a license from the CBK. This license either relates to establishing a Kuwaiti bank or permitting a foreign bank to set up a branch in the country (noting that CBK regulations apply to all banks operating in Kuwait, whether they are Kuwaiti banks or branches of foreign banks). The CBK licensing regime covers conventional and Islam - ic banks. Kuwaiti banks For a bank to be established in Kuwait it must, according to the CBK Regulations, at a mini - mum, meet the following requirements: • take the form of a public shareholding com - pany (with notable exceptions for state-
The Boursa Kuwait has a rulebook (approved by the CMA and subject to continuous amend -
ments) which regulates: • trading of securities;
• certain offering and pricing restrictions in rela - tion to block trades (eg, privately negotiated securities transactions); • the conduct of licensed persons that carry activities adjacent to those of a securities’ exchange (eg, brokerage and custody ser - vices); • duties of integrity, fair dealing, and due care; • disaster recovery rules; • listing requirements and market segmenta - tion; and • the enforcement process with respect to While banks are typically organised as KSCs, other CBK-Regulated Entities may take other forms of corporate entities (such as a “With Limited Liability” company). The Companies Law regulates the cascading rules associated with a chosen corporate form as well as the rules surrounding the structure of its share capital and equity financing rules. Corporate capacity and authority rules, which are key in approving bank - ing and finance transactions, are largely gov - erned under the Companies Law. In addition, the Companies Law outlines general corporate gov - ernance rules, external auditing requirements, as well as general corporate housekeeping require - ments (such as mandatory annual general meet - ings for shareholding companies, accounting and audit standards, company reserves, etc). The Ministry of Commerce and Industry (MOCI) is the public authority tasked with overseeing the implementation of the Companies Law and its regulatory framework. listed securities. Companies Law
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