As part of its ongoing efforts to modernize Kuwait’s capital markets and align its regulatory framework with international best practices, the Capital Markets Authority (“CMA”) has issued decision no (85) of 2026, introducing a series of amendments to the executive Bylaws of law no.7 of 2010 concerning the establishment of the CMA and regulation of securities activities. The decision forms part of the second phase of the Qualified broker initiative, a key component of the CMA’s broader Capital Market Development launched in 2025.

The amendments seek to enhance market efficiency by restructuring the trading commission framework, introducing additional financial services, and strengthening the role of licensed brokerage firms in managing clients assets.

Regulatory framework & Key objectives

The decision aims to expand the range of services that licensed brokers may offer while improving the overall trading experience for investors. A notable feature of the amendments is the introduction of a new service allowing brokers to deposit clients trading funds into income generating accounts maintained with commercial banks. This enables idle cash balances allocated for trading purposes to generate returns for investors while remaining available for securities transactions.

Restructuring the Trading Commission Model

One of the most significant reforms introduced by this decision is the restructuring of the trading commission applicable on the Kuwait Stock Exchange. The CMA has unified the overall trading commission applicable to both the Premier Market and the Main market, creating a standardized commission structure across the exchange.

The decision also revives the allocation of commission components between the stock exchange, the clearing company, and the brokerage firms. Under the new framework the exchange and clearing fees are fixed while brokerage firms are granted greater commercial flexibility by allowing them to offer discounts on their brokerage commissions, subject to limits determined by CMA.

In addition, the decision abolished certain fixed transaction fees, including the 5KD custody settlement fee charged per executed transaction on custody accounts and the 0.50KD settlement fee previously imposed on transactions exceeding 50KD. The decision also increases the minimum brokerage commission from 0.250 Fils to 0.500 Fils.  The removal of these fees is expected to reduce transaction costs and improve overall efficiency of trading activities.

Conclusion

The CMA’s Decision no (85) of 2026 represents another significant milestone in the CMA’s capital market reform agenda. By introducing innovative financial services, restructuring the trading commission framework, and reducing transaction costs, the decision improves market efficiency while promoting competition and the continued development of Kuwait’s securities market. As these reforms are implemented market participants should keep an eye out and review their operational compliance frameworks to fully capitalize on the opportunities presented.

Authors: Mohammed Al Awadhi, Partner and Ahmed AlBuaijan, Trainee Lawyer