Client Alert: Kuwait CMA Introduces Reforms to the Collective Investment Schemes Framework Under Decision No. (18) of 2026

Overview

In a significant step to strengthen and modernize Kuwait’s collective investment schemes framework, the Kuwait Capital Markets Authority (the “CMA”) has introduced a new wave of reforms under Decision No. (18) of 2026 (the “Decision”), issued on 12 February 2026.

The Decision establishes a dedicated regulatory framework for multi-asset funds, amends key investment control provisions applicable to other fund types under Module 13 (Collective Investment Schemes) of the CMA Executive Bylaws, and notably creates a standalone institutional marketing pathway for the marketing of foreign funds in Kuwait to professional clients by nature.

Existing funds may also elect to benefit from the updated rules and revised concentration limits applicable to their fund category, subject to obtaining the CMA’s prior approval to amend their constitutional documents.

The Decision entered into force on 12 February 2026 and was published in the Official Gazette.

This alert outlines the principal amendments introduced by the Decision and highlights key areas where fund structures, documentation, marketing processes, and compliance frameworks may require review and update.

What is New?

Main Amendments to Definitions, Marketing and Investment Controls

The Decision introduces targeted amendments to Module 13 of the CMA Executive Bylaws, refining both the definitional framework and a number of substantive requirements applicable to collective investment schemes. Most notably, it expands the related parties regime to apply across all fund types (rather than only real estate funds), while clarifying the scope of captured persons and entities. In particular, it expressly extends the framework to additional roles (including the fund liquidator, alongside the fund manager) and clarifies when fund service providers, affiliated entities and controlling persons are treated as related parties.

The Decision also strengthens the foreign fund marketing framework by expanding the pool of eligible CMA-licensed applicants. In addition to fund managers and subscription agents, CMA-licensed investment advisers may now apply for the relevant marketing permission, creating greater flexibility for distributors and advisory platforms structuring compliant access to foreign fund offerings in Kuwait.

In parallel, the Decision clarifies the definition of a Holding Fund, confirming that its main purpose is to invest in other funds licensed by the CMA or regulated by another competent authority. The Decision also requires prior CMA approval for any purchase, sale, or other transaction involving a fund’s real estate investments where the counterparty is a related party, even if the transaction otherwise complies with the fund’s investment controls and constitutional documents.

Updates to investment controls of certain local fund types were also introduced. The Decision also brings minor updates the application form to market units of foreign collective investment schemes in Kuwait, and amends the CMA fee schedule to introduce fees for the institutional marketing of foreign collective investment schemes and update the fees applicable to contractual collective investment schemes.

Institutional Marketing Route for Foreign Funds

A key development under the Decision is the introduction of a new institutional marketing route for the marketing of units in foreign collective investment schemes (i.e., funds established outside Kuwait) to Professional Clients by Nature only. In practical terms, this covers the marketing, offering, arranging, or soliciting of subscriptions in one or more foreign collective investment schemes (including investment funds and similar schemes established outside Kuwait) exclusively to governments, public authorities, central banks and international institutions (such as the World Bank and the International Monetary Fund), CMA-licensed persons, investment funds and other financial institutions subject to supervision inside or outside Kuwait, and companies with paid-up capital of at least KWD 1 million (or the equivalent).

Marketing under this route remains permit-based and cannot commence unless the relevant CMA approval/permit is obtained in advance. The approval process appears to be more streamlined than the regular foreign collective investment scheme marketing route. Under the Decision, the CMA is to issue its decision on the institutional marketing application within 10 working days from receipt of a complete application satisfying the required documents and conditions. By contrast, under the regular foreign collective investment scheme marketing process in Kuwait, the timeline is generally longer as the CMA may take 1 to 3 weeks (at its discretion) to provide comments on the scheme offering documents following submission, and may issue its final approval within 30 days from submission of a completed application, although in practice approval may take longer depending on the volume of applications before the relevant CMA department.

Per the Decision, institutional marketing is expressly carved out from the Chapter 5 of Module 13 requirements that apply to the regular foreign collective investment scheme marketing regime. In practical terms, this suggests a simpler approval pathway, including the likely reliance on the foreign scheme’s existing prospectus/offering documents for the scheme to be marketed in Kuwait, rather than the CMA-form prospectus requirements applicable to the regular foreign collective investment scheme marketing route.

Compared with the regular foreign collective investment scheme marketing route (which involves a KWD 1,000 filing fee plus value-based licensing fees ranging from KWD 15,000 up to KWD 30,000, depending on the size of the offering), the new institutional marketing route is subject to a KWD 500 application fee and an annual fee of KWD 10,000 per scheme upon grant/renewal, meaning that the overall cost may be lower or higher depending on the number of schemes marketed and the duration of the marketing activity, noting that the permit is valid for one year (renewable).

What this means in practice: the Decision signals a more facilitative approach to marketing foreign collective investment schemes to Kuwait’s institutional investor segment by creating a separate route with a narrower investor scope and a more streamlined approval process.

Introducing Multi-Asset Funds

As a major new update, the Decision introduces “multi-asset funds” as a standalone category of collective investment scheme, defined as a fund whose investment policy permits investment across more than one asset class (rather than being limited to a single fund type). The Decision further issues a dedicated set of investment controls applicable specifically to multi-asset funds, setting minimum governance and risk parameters including:

– Asset class caps: fund articles of association must set minimum/maximum allocations per asset class, with a maximum of 60% of NAV per single asset class.

– Issuer concentration limits: generally no more than 10% of the fund’s exposure to securities issued by a single issuer (with limited exceptions, including certain sovereign/GCC-related instruments).

– Borrowing/obligations cap: restrictions on entering into transactions that create obligations exceeding 15% of NAV.

– Derivatives cap: restrictions on derivatives exposure (at time of investment) not exceeding 10% of NAV.

How We Can Help

Our Capital Markets team is well placed to support clients on an end-to-end basis, including: (i) structuring and documenting local funds (ii) assessing the impact of the Module 13 amendments and implementing the required compliance, governance and documentation updates; and (iii) preparing, coordinating and managing CMA filings, applications and approvals for the marketing of foreign funds in Kuwait, including the marketing of foreign collective investment schemes under the new institutional marketing route.

For tailored guidance on navigating these amendments, whether for product structuring, compliance uplift or foreign fund marketing approvals, please contact us.