Kuwait has officially launched securities-based crowdfunding platforms, marking a significant milestone in the country’s financial technology landscape nearly two years after the initial draft for Fintech regulation was introduced.
The announcement, made by Minister of Commerce and Industry Omar Al-Omar, represents a strategic move aimed at diversifying financing options for small projects through licensed digital platforms, thereby providing substantial support to entrepreneurs and enhancing the nation’s digital infrastructure.
This new commercial activity is designed to offer an alternative funding route for startups and small businesses by enabling them to raise capital from a broad base of investors through licensed digital platforms.
By leveraging these platforms, entrepreneurs can access a more diversified pool of funds, reducing their reliance on traditional financing methods and potentially accelerating their business growth, according to the announcement.
The Capital Markets Authority (CMA), under the leadership of Chief Commissioner Dr. Ahmed Al-Mulhim, has been at the forefront of this initiative. The CMA has emphasized that the introduction of securities-based crowdfunding is a crucial step in advancing Kuwait’s financial markets, aiming to enhance competitiveness, fairness, and transparency within the sector.
This development is expected to play a vital role in achieving the aspirations of the private sector while also contributing to the broader goal of developing Kuwait’s digital financial infrastructure.
The newly launched activity is defined as the process of financing projects by collecting money from a large number of people through licensed digital platforms or applications. This approach not only democratizes the investment process but also opens up new avenues for investors of various categories to participate in the growth of emerging businesses.
The CMA views the inclusion of securities-based crowdfunding as a qualitative advancement in the ongoing efforts to modernize Kuwait’s financial markets, ensuring that the country remains aligned with global trends in financial technology.
The CMA has taken proactive steps to ensure the successful implementation of this initiative. It has issued comprehensive executive regulations under the title “Financial Technologies,” which serve as a complement to this latest decision.
These regulations were developed in accordance with international best practices, ensuring that Kuwait’s fintech landscape is competitive on a global scale. The CMA has also established the necessary regulatory and supervisory frameworks to oversee the operation of these crowdfunding platforms.
Furthermore, the CMA has reported receiving numerous applications from entities interested in participating in this new commercial activity. These applications are being processed by the newly created Financial Technologies Department within the CMA’s organizational structure, which is tasked with ensuring that all operations adhere to the highest standards of fairness, competitiveness, and transparency.