Kuwait has unveiled a much-delayed bill to set up a financial markets regulator, which stipulates tough punishment for insider trading on a stock market battered by a string of irregularities.

The Opec producer is the only Gulf state which does not have a dedicated authority to supervise its bourse, the second-largest in the Arab world, which has fallen more than 30 per cent this year.

Commerce & Industry Minister Ahmad Baqer told state news agency KUNA late on Monday that the long-awaited bill had been submitted to parliament.

The government had originally hoped to get parliamentary approval for the law last year but those plans were scuttled after a political standoff between the executive and legislative branches led to the dissolution of parliament and new elections.
  
This time, parliamentary approval is again far from guaranteed as Kuwait is in the midst of another political crisis which led the government to resign last month.    Parliament is now unlikely to convene before the new year.

The 157-article bill calls for the creation of a regulator which is itself monitored by the prime minister. It aims to 'stop crimes and violations on the stock market and protect investors', according to a copy published by local newspapers.

The authority will oversee initial public offerings, mergers and acquisitions and will have the power to impose fines of up to 100,000 dinars ($363,100) and prison sentences up to five years, for violations.

It will also have the power to halt or cancel trading in the bourse in case of crisis or unrest which could damage the stock market. The authority will also be able to do the same in the case of stock manipulation by traders.

The seven members of the authority will be proposed by the prime minister and the body will have to submit an annual report to him.
  
Kuwait's stock exchange says it is trying to crack down on abuses that for years have deterred foreign investment in its shares, but has relatively little power to act.

In 2006, it banned the family owned Kharafi Group from using the exchange to trade shares in 10 companies after they allegedly violated disclosure rules. Courts overturned the ban last year.-Reuters