<p>The Capital Markets Authority Law (&ldquo;CML&rdquo;) and its executive regulations (the  &ldquo;Regulations&rdquo;) granted the Capital Markets Authority (the &ldquo;Authority&rdquo;) the right  to issue resolutions after the publication of the Regulations that will  determine the minimum capital requirement and the legal form of the entities  subject to licensing under the CML.&nbsp;<br /><br />The CML and its Regulations provides  that no person may carry on activities of securities in Kuwait unless it is  licensed by the Authority. In such respect, the Regulations set forth a full  list of requirements, documents and information to be presented to the Authority  along with an application for license, allowing the Authority to study the  application request and to issue the license if such application is  approved.<br /><br />However, amongst the extensive list of requirements, documents  and information set forth in the Regulations, no specific share capital or legal  form for the applicant has been identified. In fact, the Regulations provides  that the Authority shall determine, under a resolution passed thereby, the  minimum share capital of the applicant as per the type of securities business  subject of license and the legal form required for carrying on the  business.<br /><br />Pursuant to the above, the Authority issued on 13 June 2011 the  Decision No.9 for the year 2011, whereby it provides for the minimum share  capital and the legal form of the entities subject to licensing under the CML:</p>
<table border="1" cellspacing="2" cellpadding="2">
<tbody>
<tr>
<td width="31" valign="top">
<p>&nbsp;</p>
</td>
<td width="276" valign="top">
<p>Activity</p>
</td>
<td width="136" valign="top">
<p>Legal Entity</p>
</td>
<td width="188" valign="top">
<p>Capital</p>
</td>
</tr>
<tr>
<td width="31" valign="top">
<p>1</p>
</td>
<td width="276" valign="top">
<p>Securities Brokerage</p>
</td>
<td width="136" valign="top">
<p>Shareholding Company</p>
</td>
<td width="188" valign="top">
<p>Kuwaiti Dinar Ten Million</p>
</td>
</tr>
<tr>
<td width="31" valign="top">
<p>2</p>
</td>
<td width="276" valign="top">
<p>Investment Advisory</p>
</td>
<td width="136" valign="top">
<p>Shareholding Company</p>
</td>
<td width="188" valign="top">
<p>Kuwaiti Dinar One Million</p>
</td>
</tr>
<tr>
<td width="31" valign="top">
<p>3</p>
</td>
<td width="276" valign="top">
<p>Investment Portfolio Management</p>
</td>
<td width="136" valign="top">
<p>Shareholding Company</p>
</td>
<td width="188" valign="top">
<p>Kuwaiti Dinar Ten Million</p>
</td>
</tr>
<tr>
<td width="31" valign="top">
<p>4</p>
</td>
<td width="276" valign="top">
<p>Collective Scheme Management</p>
</td>
<td width="136" valign="top">
<p>Shareholding Company</p>
</td>
<td width="188" valign="top">
<p>Kuwaiti Dinar Fifteen Million</p>
</td>
</tr>
<tr>
<td width="31" valign="top">
<p>5</p>
</td>
<td width="276" valign="top">
<p>Custodian</p>
</td>
<td width="136" valign="top">
<p>Shareholding Company</p>
</td>
<td width="188" valign="top">
<p>Kuwaiti Dinar Fifteen Million</p>
</td>
</tr>
<tr>
<td width="31" valign="top">
<p>6</p>
</td>
<td width="276" valign="top">
<p>Investment Controller</p>
</td>
<td width="136" valign="top">
<p>Shareholding Company</p>
</td>
<td width="188" valign="top">
<p>Kuwaiti Dinar Five Million</p>
</td>
</tr>
<tr>
<td width="31" valign="top">
<p>7</p>
</td>
<td width="276" valign="top">
<p>Marketing and selling securities</p>
</td>
<td width="136" valign="top">
<p>Shareholding Company</p>
</td>
<td width="188" valign="top">
<p>Kuwaiti Dinar Ten Millio</p>
</td>
</tr>
</tbody>
</table>
<p><br />However, Decision No.9 failed to specify whether such requirements are  imposed on existing companies seeking to be licensed under the CML, or imposed  on companies to be established post-issuance of said Decision No.9. The lack of  specification has had a severe impact on the current companies who may need to  amend their share capital or legal form for the purposes of the license under  the CML.&nbsp;<br /><br />Nevertheless, and following several queries from the existing  companies in the securities sector in Kuwait, the Authority has advised  (unofficially) that the requirements above will only be imposed on new companies  to be established after the issuance of the said Decision No.9. However, until a  further decision is issued or Decision No.9 is modified to state the same, there  will be some confusion as to its applicability.</p>