Title: Announcement Regarding Issuance of Disciplinary Board Resolution on Violation No. (14/2019 Disciplinary Board) (3/2019 Authority)
Date Publish 11 April 2019
The Capital Markets Authority announces issuance of a Disciplinary Board Resolution passed in its meeting held on Thursday 11/04/2019 on violation No. (14/2019 Disciplinary Board) (3/2019 Authority) filed against:
Al-Fouz Investment Company
“The Company shall pay a total of KWD 1,000 for each of the three violations filed against it for allowing internal transactions between portfolios which led to an overdraft and making transfers from an account with a different Client name”
The punishment is due to following violations:
- Provision of clause (2) of article (2-2) of Module Seven (Clients’ Funds and Clients’ Assets) of the Executive Bylaws of Law No. 7 of 2010 and their amendments, for executing an order of a client’s investment portfolio No. (----) to transfer the amount of KD 2,500,000 (two million five hundred thousand Kuwaiti Dinars) to the account of the client who owns the real estate portfolio No. (----), where it was found that the beneficiary of the transfer is a client other than the one provided in the preceding article.
2. Provisions of Clause (5) of Article (5-2-1) of the above-mentioned Module of the Executive Bylaws of the law mentioned above. The Authority found that portfolio number (----) is overdrafted with a total amount of KD 9,554 (nine thousand five hundred and fifty four Kuwaiti Dinars) of which KD 5,300 (five thousand and three hundred Kuwaiti Dinars) is not related to the management or safekeeping fees of the portfolio. The Company has executed two share purchase transactions for the client who owns the investment portfolio, without sufficient balance to cover the value of the purchase.
3. The provisions of Article (2) of Article (5-4-2) of the above-mentioned Module of the Executive Bylaws of the law mentioned above, for holding internal transactions between the following portfolios:
1- Portfolio no. (-----) and portfolio no. (----) where two deals were settled on 8/10/2017 and 18/10/2017.
2 - Portfolio no. (----) and portfolio no. (----) where a single transaction was settled on 23/8/2017.
3 - Portfolio no. (----) and portfolio no. (----) where two deals were settled on the same date 23/8/2017.
In this regard, the CMA emphasizes the implementation of CMA Law and its Executive Bylaws on all persons dealing in securities activities, and urges them to comply with these rules in order to promote investors' confidence, create a sound investment environment, and implement the Law according to the principles of fairness, transparency, and integrity in line with the best international practice.
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