Kuwait caps brokerage commission discounts at 25 percent from January 2027
Kuwait’s Capital Markets Authority issued Circular No. 16 of 2026 on 3 September, permitting licensed persons acting as qualified registered brokers on the exchange to grant discounts on brokerage commission of no more than 25 percent of the commission value, effective 1 January 2027. Firms have 120 days from issue to the effective date, on our calculation.
The circular does not require anyone to discount. It states that granting these discounts remains a discretionary option for the licensed person, with no obligation to grant them. What it does is convert an activity that sat under a general prohibition into a permitted one with a ceiling.
The schedule the cap will land on is itself being replaced
The cap cannot be priced against today’s commission schedule, because the Authority has already approved a restructuring of that schedule and has set a target date of 1 October 2026, three months before the discount takes effect.
Announced in a press release of 25 June 2026, the restructuring unifies the commission on the Premier Market and the Main Market at 15 basis points and splits it into two published components: 6.6 basis points for the exchange, settlement and clearing, and 8.4 basis points for brokerage. The Authority describes both component figures as estimates. The minimum commission doubles from 250 fils to 500 fils per executed transaction. Two settlement fees are abolished outright, one of 5 dinars per executed transaction for custodian clients and one of half a dinar on transactions above 50 dinars.
That date is a target rather than a commencement. The Authority conditions it on the successful completion of extended market testing across all participants, and as of 5 September no instrument enacting the new schedule has been published by either the regulator or the exchange, whose posted rates are unchanged.
| Commission schedule | Published now | Target from 1 Oct 2026 |
|---|---|---|
| Premier Market | 10 bp | 15 bp |
| Main Market | 15 bp | 15 bp |
| Minimum per ticket | 250 fils | 500 fils |
Rates as published on Boursa Kuwait’s trading information pages, against the Authority’s June restructuring. The unification covers the Premier and Main markets only. The Auction Market at 30 basis points and the Emerging Companies Market at 15 basis points are not addressed, and neither is the existing 70, 29 and 1 percent split of commission between broker, exchange and clearing company.
What a 25 percent discount is worth
Read against the restructured schedule, the circular’s cap applies to the brokerage commission of 8.4 basis points, giving a maximum discount of 2.1 basis points, on our calculation. A client taking the full discount would pay 6.3 basis points of brokerage plus the unchanged 6.6 basis points for the exchange and clearing, or 12.9 basis points all in, on our calculation, against 15 basis points undiscounted.
That is a reduction of 14 percent in the all in cost, on our calculation, not 25 percent, because only 8.4 of the 15 basis points is the broker’s to give: the other 6.6, or 44 percent of the commission, belongs to the exchange and the clearing company. Against the brokerage component alone it is the full 25 percent, and it is a quarter of the only revenue line the broker actually keeps.
The circular’s wording is 25 percent of the value of the commission, which reads most naturally as the brokerage commission it is addressed to, though the phrase is not airtight and the Authority has not published a worked example. Nor has it said how a percentage discount meets the 500 fils floor, which binds on small tickets and is exactly where a retail discount would otherwise matter most.
The conditions attached
The circular rests on Article 1-6 of Book Eight of the executive regulations of Law No. 7 of 2010, as amended by Resolution No. 85 of 2026. That article carries a general prohibition on a licensed person paying fees, commissions or benefits, whether cash or non cash and whether direct or indirect, to clients, and applies the same prohibition to employees. Discounts on brokerage commissions are one of the listed exceptions, permitted where determined under the authority’s instructions and granted under specified policies.
Firms must put in place clear and organised policies and procedures covering the mechanism for granting discounts and the criteria for entitlement, ensure clear disclosure to clients, and apply them fairly. The circular names trading tiers and activity volume as examples of objective criteria a programme may use.
Market makers are expressly outside the mechanism. They continue to receive the discounts prescribed under the exchange’s own rules. The circular was signed by Emad Ahmad Tayfouni.
Why it matters: Price competition between Kuwaiti brokers has until now had no sanctioned channel, because the governing article treats benefits granted to clients as prohibited unless specifically excepted. This circular opens the channel and immediately bounds it, which is a different regulatory choice from either leaving commissions fixed or freeing them entirely. The sequencing is the point: the Authority unifies and unbundles the schedule first, then caps what brokers may give back out of their own component. A floor of 12.9 basis points all in, on our calculation, is set before competition begins, and firms compete for high volume clients through documented tiering rather than on headline price. The disclosure and fair application conditions are the part that changes daily practice: a discount programme now has to be written down, justified against objective criteria and shown to clients, which makes selective pricing harder to operate quietly. Exempting market makers keeps liquidity provision on its own commercial terms rather than folding it into a retail pricing rule.
Outlook: The 120 day gap to 1 January 2027 is the design point, on our calculation, because it gives firms about 4 months to build tiering policies and disclosure before anyone can offer a discount, and it puts the discount 3 months behind the restructuring it depends on. The prior question is whether the restructuring itself lands on time, because the discount is calibrated to a commission structure that does not yet legally exist. Watch for the instrument enacting it, and for the exchange updating its published rates. Two things are unresolved in the circular’s own text: how a percentage discount meets the 500 fils minimum, and whether the 6.6 basis point exchange and clearing component is genuinely untouchable by a broker willing to compete harder.
Sources: Capital Markets Authority, Boursa Kuwait.
