The news? As of 25 April 2016, Boursa Kuwait took on the responsibilities of operating the Kuwait stock exchange. The transition is expected to be completed by the end of 3Q2016, according to Boursa Kuwait’s website.   What are the strategic objectives of Boursa Kuwait? BKSC’s strategic objectives include : a) creating an attractive issuer base, b) broadening the investor base, c) increasing the depth and breadth of products, and d) upgrading the stock exchange infrastructure and business environment to international standards. One of the end goals of the transformation is to achieve emerging market status, according to the website.   How to read the news? It seems that the transition has the backing of the CMA, and is built on a roadmap (see below) that has been in the making for sometime with clear set targets. As we enter phase 3 of the roadmap, we look at the implementation, and any signs of improvement in market infrastructure/rules and regulations.   Kuwait is on FTSE’s watchlist for an EM upgrade, but inclusion (unlikely this year) will depend on the effectiveness of the transformation. FTSE has kept Kuwait on the watchlist for a potential upgrade to secondary EM at the September 2016 annual review. There have been no changes to the assessment of Kuwait against quality of markets criteria. In March 2015, FTSE upgraded the ‘Formal stock market regulatory authorities actively monitor market’ criteria for Kuwait from ‘Restricted’ to ‘Pass’, and although on the matrix criteria Kuwait scored in-line with UAE and Qatar during the last annual review in September 2015, Kuwait was not included in EM. We have seen no major developments since that review that would warrant a change in FTSE’s stance. We believe that modifications to the rules such as those relating to cross trades, and better broad market liquidity (Kuwait’s stock market liquidity has fallen from ADVT of USD400mn in 2007-10, to USD91mn since, while YTD ADVT is USD44mn) are two important factors that could improve Kuwait’s chances for FTSE EM inclusion, and potentially at a later stage MSCI EM (but there is no such proposal currently).      The roadmap (as per Boursa Kuwait’s website) : Phase 1 -  Setting strategic roadmap (completed) : Market assessment, research and development of the company’s vision, mission, corporate values, strategic roadmap and business plan Phase 2 -  operational takeover preparation (Completed) : Preparations for operational takeover of the KSE as per CMA Law 7/2010 Phase 3 -  Takeover Execution and Transformation Commencement (In Progress) : Boursa Kuwait to takeover KSE operations and starts implementing the transformation plan Phase 4 -  Transformation and Growth : Focus on the growth of the company through the creation of an attractive securities issuers’ base, the broadening of the investors’ base and the increase of the depth and breadth of products. (Boursa Kuwait, Mohamad Al Hajj)