CMA gives funds until June to cap stock ownership

Kuwait's financial watchdog is giving investment funds until the end of June to comply with new rules on the ownership of individual financial securities.

The Gulf state is home to a large number of investment firms which have been hard hit by the global financial crisis, many of them had trading in their shares frozen.

The Capital Markets Authority (CMA), the first of its kind in Kuwait, was set up last year to try to address such issues.

The CMA made amendments to bylaws in February regarding the amount of shares investment funds operating in Kuwait can own in a single security. It originally had an end-March deadline for compliance with its rules, but a new deadline had not been specified after the amendments.

"The Capital Markets Authority draws the attention of all persons authorized of the need to resolve the issue of funds investing in securities before June 30, 2012," the CMA said in an e-mailed statement on Thursday.

The amended rules state that a fund cannot own more than 10 percent in a single security. It the fund wants to own more, then it can only acquire a stake which is less than the company's comparative share of the stock market or of the sector.