How To Transfer Shares and Bonds in Kuwait to a New Owner

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The application transfer of ownership of listed securities in Boursa Kuwait and expected from trading rules should be presented to the trading operations department along with the following documents:

First: Transfer of   ownership               based  on               an                    amicable                 settlement     with     a              financial institution:

  1. Application form submitted by the owner of the securities and the transferee.
  1. Document proving that the company is a financial institution as per the definition of CMA executive by-laws number 7 for the year 2010.
  1. Document of a financial settlement between the transferor and the transferee (settlement agreement or judgment ordering settlement).
  1. Document or proof of debt subject to the settlement.
  1. Legal representative’s signature authorization for each party.
  1. Copy of the parties’ civil IDs in case of individuals and memorandum and articles of association in case of a legal entity.
  1. Any other document requested by Boursa Kuwait.

Second: Transfer of ownership based on a pledge of the securities in favor of a financial institution:

  1. Application form submitted by the legal representative of lender mortgagee.
  1. Proof of ownership of the securities subject to transfer of ownership to the debtor mortgagor (receipt issued by Kuwait Clearing Company).
  1. Document proving that the company is a financial institution.
  1. Financial institution Memorandum and Articles of Association.
  1. A certificate issued by the commercial register.
  1. Financial institution legal representative signature authorization.
  1. Mortgage contract (and its appendices), if it includes a transfer of ownership provision.
  1. Copy of the parties’ is civil IDs in case of individuals and memorandum and articles of association in case of a legal entity.
  1. Document proving that the lender mortgagee duly and legally notified the parties and valuated the securities.
  1. Evidence that the debtor mortgagee is a professional client.
  1. Any other documents requested by Boursa Kuwait.

Transfer of Ownership of Securities

Third: Transfer of ownership further to a repurchase agreement as set forth in Article (8-11), module

11 of CMA’s Executive by-laws of Law (7/2010):

Article (8-11), module 11 of CMA’s executive by-laws provides: “Contracts for the sale of listed and unlisted Securities may state that the seller may reserve the right to repurchase the Securities in return of for the payment of a certain amount during a specified period. Such contracts shall include an agreement to deposit the Securities concerned with a Custodian, who shall manage and dispose of them in accordance with the agreement between the seller and the buyer. Such agreement shall be noted in the Securities register. Securities trading rules shall include provisions, which regulate such agreements, and these agreements shall be excluded from the trading rules for listed Securities. The provisions of article (508) of the Civil Law shall not apply to such contracts.”

Therefore, the minimum requirements shall be as follows:

1-     An application form submitted by the parties.

2-     Copy of seller’s securities receipt subject to transfer (issued by Kuwait Clearing Company).

3-     The repurchase agreement entered into between the parties.

4- Document showing that the repurchase agreement is registered in the securities’ issuer shareholders’ register.

5- Copy of the parties’ civil IDs numbers in case of individuals and memorandum and articles of association in case of a legal entity.

6-     Any other document requested by Boursa Kuwait.

Fourth: Transfer of ownership of shares necessary to guarantee membership in the Board of Director in accordance with the Articles of Association of a company:

1- An application form submitted by the company’s legal representative requesting the transfer of securities’ ownership to a specific board member.

2-     The company’s memorandum and articles of association.

3- A certificate issued by the Ministry of Commerce and Industry listing the current Directors of the Board.

4-     Signature authorization of the legal representative.

5-     Securities certificate of ownership issued by Kuwait Clearing Company.

6- Copy the member’s civil ID to whom the shares will be transferred, as well as a certificate indicating that such member does not own the same shares subject to transfer. In case the board member is a legal entity, a copy of the memorandum and articles of association of the company should be submitted as well as the legal representative signature authorization and a copy of his civil ID.

7-     Any other document requested by Boursa Kuwait.

Transfer of Ownership of Securities

Fifth: Transfer of ownership based on a final court judgment:

1- Application form submitted by the person or party in favor of which a judgement was rendered. 2- Copy of the parties’ civil IDs in case of individuals and memorandum and articles of association in

case of a legal entity.

3-     Original copy of the final judgment and the exequatur.

4- Original certificate issued by the court indicating that there no objections were presented against the enforcement of the judgment.

5- A certificate issued by Kuwait Clearing Company indicating the name of the owner of the shares subject to the transfer as set forth in the judgement (Securities certificate of ownership of the person subject to the judgment).

6-     Any other document requested by Boursa Kuwait.

Sixth: Transfer of ownership pursuant to a request submitted by a government authority (in the context of the government authority offering its securities to the private sector):

1- An application submitted by the governmental authority signed by the authorized officer (officer who has capacity) showing the exact number of shares that he/she is authorized to transfer and the name of the entity to which the shares will be transferred.

2-       Securities ownership receipt issued by Kuwait Clearing Company.

3- Copy of the law or the decision by virtue of which the applicant entity was established as well as its articles of association proving its right to transfer ownership to third parties.

4-       Approval of the transferee.

5- Copy of the party’s civil IDs in case of individuals and memorandum and articles of association in case of a legal entity.

6-       Any other document requested by Boursa Kuwait.

Seventh: Transfer of ownership from shareholders of a company to the company and vise-versa:

1- An application submitted by both parties and signed by the company and partner’s legal representatives.

2- Company’s memorandum and articles of association and its latest amendments and a certificate issued by Ministry of Commerce and industry’s commercial registry.

3- A certificate issued by Ministry of Commerce and Industry indicating the partners of a company at the application’s submission date.

4- Copy of the party’s civil IDs in case of individuals and memorandum and articles of association in case of a legal entity.

5- Securities ownership receipt issued by Kuwait Clearing Company. 6- Any other document as requested to by Boursa Kuwait.

Transfer of Ownership of Securities

Eighth: Transfer of ownership between subsidiaries and sister companies:

1- Document showing the ownership structure of the company and its relation with the subsidiary or sister company.

2- Memorandum and articles of association of both companies (parent company, subsidiary or sister company).

3- Signature authorization legal representative of both companies (parent company and subsidiary or sister company).

4- Securities certificate of ownership issued by Kuwait Clearing Company for the shares subject of transfer.

5-         A letter justifying the transfer.

6- A letter issued by the company’s financial auditor clarifying the impact of financial statements on the company and the percentage of the asset subject to the transfer against the total assets of the company.

7-         A letter issued by the chairpersons of both companies, i.e. transferor and transferee.

8- The phrase “transfer of the ownership of shares of the companies’ directors” should appear on the document.

9-         Any other document requested by Boursa Kuwait.

Ninth: Securities offered to company’s employees pursuant to the stock option offered to employees:

1- The resolution passed by the company’s general assembly offering employee stock option plans or schemes.

2- A copy of company’s memorandum and articles of association. 3- Signature authorization of the company’s legal representative. 4- A list indicating the names of the current directors of the board.

5- The application will be submitted by the company’s legal representative specifying the names of employees who are eligible to the employee stock option plan, enclosed with the following:

a- A copy of employee stock option plan. b- Option price as at the date thereof.

c- A list of the names of employees to whom employee stock option plan is allocated. d- Number of shares allocated to each employee in the company.

6- Evidence of the job or nature of work of each employee to whom the shares will be transferred. 7- Any other document requested by Boursa Kuwait.

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