Capital market literacy to help bolster investor confidence

Simon Culhane, Chartered FCSI chief executive, during the interview.

KUWAIT: The three-tiered segmentation is a step forward for Boursa Kuwait's commitment to strengthen its regional and international track-record in terms of best practices to uphold transparency in the market and bolster investor confidence, said Simon Culhane, Chartered FCSI chief executive.

In an exclusive interview with Kuwait Times, Culhane said the new market segmentation enhances Boursa Kuwait's responsibility, especially with the modified Boursa Kuwait Rulebook and increases its competitiveness and liquidity. "It is encouraging to see leading institutions like Boursa Kuwait driving the improvement of capital market literacy and equipping investors with the tools to participate in the market with confidence," he said. Excerpts:

Kuwait Times: Kuwait's Capital Market Authority (CMA) has signed an agreement with the Chartered Institute for Securities and Investment (CISI) two years ago. Do you observe any significant improvement in Kuwait capital market over the last two years, especially in the areas of integrity and ethics in finance?

Culhane: The Middle East has witnessed a better performing economy every year, with Kuwait being no exception. Kuwait's investment environment is getting more robust each year, evidenced by an increasing number of ultra-high net worth individuals coupled with the establishment of global and local corporations in the country. All of these point to the steady growth of the Kuwaiti financial services profession, which shows no sign of slowing down in the foreseeable future.

The CISI is set to focus more on implementing ethics and integrity, both of which are crucial to developing trust in Kuwait's financial services profession. This will also demonstrate willingness amongst practitioners to continuously learn and develop or expand their skillset, as there are a minimum number of Continuing Professional Development (CPD) hours that need to be completed in order to remain a member of the CISI.

KT: As a global professional body for those who work in the financial services and investment profession, is CISI satisfied with the progress being made by Boursa Kuwait in setting standards of conduct and ethics for participants?

Culhane: With the launch of the educational portal on capital markets information, Boursa Kuwait is undoubtedly pursuing best practice and increasing transparency for the benefit of its stakeholders. As financial markets are constantly evolving, it is encouraging to see leading institutions like Boursa Kuwait driving the improvement of capital market literacy and equipping investors with the tools to participate in the market with confidence.

KT: Give me a brief about your partnership with Kuwait's Capital Market Authority (CMA) in the context of CISI certification standards.

Culhane: The CISI signed a memorandum of understanding with the Kuwait CMA in 2016 establishing a new qualifications framework, with international standards, to serve securities practitioners in the financial sector. The agreement has also introduced a Kuwaiti local regulations exam to complement the existing international technical qualifications offered by the CISI, thereby ensuring the qualification has the local relevance Kuwaiti financial professionals require.

The partnership does not only aim to improve the efficiency of Kuwait's market participants, but it also keeps CMA's laws and regulations up-to-date with international best practices and qualification standards. This was aligned with the CMA's strategic plan to develop the securities sector, create an attractive investment environment, and raise Kuwait's profile as a financial hub in the region. The partnership is also a sign of the profession's increasing awareness of the importance of integrity and ethics in the financial services profession to gain investor confidence.

KT: Boursa Kuwait announced its second phase of market reform on April 1, 2018 bringing about a three-tiered segmented market, the introduction of new market-capitalized indices and circuit breakers on securities and indices. How do you look at these reforms on Boursa Kuwait?

Culhane: The announcement of the three-tiered segmentation is a step forward for Boursa Kuwait's commitment to strengthen its regional and international track-record in terms of best practices to uphold transparency in the market. In its efforts to restructure the market to increase competitiveness and liquidity, it addresses the need to provide an attractive investment platform that helps to improve the percentage of traded shares, thereby enhancing the condition of the market.

The new market segmentation increases Boursa Kuwait's responsibility, especially with the modified Boursa Kuwait Rulebook. With all members being required to comply with the updated rules and listing requirements, we can expect complete transparency for both investors and market participants.

By Sajeev K Peter