Client Alert: CMA and Boursa Kuwait Launch Regulatory Framework for Emerging Companies Market and Broader Market Reforms

Overview

In a significant development for Kuwait’s capital markets, the Capital Markets Authority (“CMA”) and BoursaKuwait have recently introduced new regulatory reforms intended to widen market access and support the growth of emerging ventures.

On 29 June 2025, the CMA issued Decision No. 108 of 2025 (the “CMA Decision”), introducing the regulatory framework for the Emerging Companies Market (the “Emerging Market”), a new listing platform within Boursa Kuwait designed to support early-stage, high-growth businesses.

This was followed by Boursa Kuwait’s Resolution No. 2 of 2025 (the “Boursa Decision”) on 6 July 2025, which amends the Boursa Rulebook to implement the Emerging Market framework and introduces broader reforms impacting listing criteria, ongoing obligations, and market structure.

Adding further momentum to Kuwait’s capital markets agenda, Boursa Kuwait has also confirmed plans to launch listings of bonds and sukuk by the end of 2025, in a move that promises to diversify the exchange’s product offering and deepen market liquidity.

The Emerging Market framework will enter into force once Boursa Kuwait announces the market’s operational readiness. The provisions concerning free float will take effect following the next annual review of listed companies. All other amendments will take effect immediately upon the issuance of the decision.

Easing Access: A New Avenue for Growth Companies

For the first time, growth-stage companies in Kuwait will be able to access public capital without meeting the full capitalization, liquidity, and shareholder thresholds required for the Main or Premier Markets. Under the new Emerging Market framework, issuers may list with a minimum shares’ fair value of KWD 750,000 and a shareholder base comprising at least 20 investors, each holding no less than KWD 5,000 in shares.

The Emerging Market is primarily accessible f professional investors. Retail participation is permitted forinvestors who explicitly acknowledge and accept the heightened risk related to the Emerging Market.

In addition to relaxed entry thresholds, Emerging Market issuers are subject to less stringent governance and disclosure requirements compared to companies listed on the Premier and Main Markets.

Emerging Market listing could be a stepping stone for companies seeking a future listing on the Main or Premier Market upon satisfying the applicable performance and capitalization criteria. However, this progression is one-directional, issuers listed on the Main or Premier Market may not transfer or downgrade to the Emerging Market.

Free Float Requirement

Pursuant to Boursa Decision, all listed companies must now demonstrate a minimum 20% free float at admission. In practical terms, this effectively ends thinfloat “technical listings”: companies will not be admitted to list on any of the three markets unless they float 20% float of their shares (except where an exception from Boursa Kuwait is granted ).

For existing issuers, failure to ensure the required free float will be reviewed at the next market reclassification and may prompt heavy measures imposed by Boursa Kuwait which if not remedied can lead to suspension of trading and de-listing.

Lock-Up Post‑Listing

CMA Decision amends the existing lockup regime for major shareholders in listed companies. Transfers are prohibited for the first 6 months following listing, preserving price stability and supporting initial float formation. After the 6 months hold, up to 25% of the locked shares may be transferred; this ceiling expands to 75% once 12 months have elapsed. Full transferability is permitted only after 18 months from listing. Limited exceptions, such as inheritance, estate settlement, mergers, acquisitions, or other transactions approved by Boursa Kuwait. Issuers and selling shareholders should factor this timetable into preIPO structuring, liquidity planning, and any secondary selldown strategies.

Diversification: Bonds and Sukuk Platform Targeted for YearEnd 2025

Beyond equity reform, Boursa Kuwait is preparing to open trading in bonds and sukuk before the end of 2025. According to Boursa Kuwait CEO Mohammad Saud AlOsaimi, technical plans are place, and the regulatory framework is being finalized in coordination with the CMA. Boursa Kuwait’s move to enable bond and sukuk trading is a major step forward for investors. For the first time, investors in Kuwait will have on-exchange access to both conventional and Sharia-compliant debt, along with clearer yield benchmarks to guide investment decisions.

How We Can Help:

At Meysan, our Capital Markets team is ready to assist clients in navigating these regulatory changes and new market opportunities. For tailored guidance on meeting the evolving regulatory landscape and achieving your listing or capital-raising goals, please contact us.

Authors: Tarek Yehya, Lama Abou Ali, Sara Awaly and Razane Rammal