CmaBoardReleases
Title: Announcement regarding issuance of Disciplinary Board Resolution No. (12/2022 Disciplinary Board) (131/2021 Authority) and the imposition of a Warning against each of: 1- Boubyan Capital Investment Company as the Fund Manager of Boubyan KD Money Market Fund II 2- Gulf Custody Company as the Fund Investment Controller of Boubyan KD Money Market Fund II 3- Mr. Safi Abdulaziz Al-Mutawa (KPMG Safi Al- Mutawa & Partners) as the External Auditor for Boubyan KD Money Market Fund II for violating the rules of Collective Investment Schemes, and Securities Activities and Registered Persons
Announcement regarding issuance of Disciplinary Board Resolution No. (12/2022 Disciplinary Board) (131/2021 Authority) and the imposition of a Warning against each of: 1- Boubyan Capital Investment Company as the Fund Manager of Boubyan KD Money Market Fund II 2- Gulf Custody Company as the Fund Investment Controller of Boubyan KD Money Market Fund II 3- Mr. Safi Abdulaziz Al-Mutawa (KPMG Safi Al- Mutawa & Partners) as the External Auditor for Boubyan KD Money Market Fund II for violating the rules of Collective Investment Schemes, and Securities Activities and Registered Persons
for the following reasons:
Boubyan Capital Investment Company in its capacity as the manager of Boubyan KD Money Market Fund II, according to the provision of Item No. (2) of Attachment No. (3) “Investment Controls of Money Market Funds” of Appendix No. (4) “Investment Controls of Each Type of Fund” of Module Thirteen (Collective Investment Schemes) of the Executive Bylaws of Law No. 7 of 2010 and their amendments, to prove that the Fund has an investment in (Warba Float 06/17/25) issued by Warba Bank and bears a profit rate of 2.5% annually that was accounted for at amortized cost, and it does not hold a credit rating by any of the recognized international financial rating agencies or local rating agencies licensed by the Authority.
Which also creates a violation of the provision of Item (3) of Article No. (30) “Methods, policies, risks and fields of investment” from “First: Fields of Investment” of the Fund’s Articles of Association, which stipulates that:
“3. The credit rating of bonds and sukuk must not be less than (BBB) or its equivalent by one of the recognized international rating agencies or local rating agencies licensed by the Authority.”
And the violation of the Gulf Custody Company in its capacity as the investment controller of Boubyan KD Money Market Fund II, of the provision of items No. (1, 6) of Article (2-15) of Module Thirteen (Collective Investment Schemes) of the Executive Bylaws of Law No. 7 of 2010 and their amendments , for not complying in its capacity as mentioned in its letter dated 09/02/2021 regarding the approval of the draft financial statements of the fund for the year ending on 31/12/2020, by mentioning the violation of Boubyan Capital Investment Company in its capacity as the manager of the aforementioned fund.
And the violation of Mr. Safi Abdulaziz Al-Mutawa (KPMG Safi Al- Mutawa & Partners) as the External Auditor for Boubyan KD Money Market Fund II, due to proving violating the provision of Item No. (7) of Article (3-4-4) of Module Five (Securities Activities and Registered Persons) of the Executive Bylaws of Law No. 7 of 2010 and their amendments, for his failure to comply in his capacity as mentioned in his report regarding the fund’s financial statements for the year ending on 31/12/2020 directed to the fund’s unit holders to mention the violation of Boubyan Capital Investment Company in its capacity as the aforementioned fund manager.
The Resolution included the infliction of the following penalty: -
“First: - To warn each of Boubyan Capital Investment Company in its capacity as the manager of Boubyan KD Money Market Fund II, and Gulf Custody Company in its capacity as the investment controller of the Boubyan KD Money Market Fund II Mr. Safi Abdulaziz Al-Mutawa (KPMG Safi Al- Mutawa & Partners) in his capacity as the external auditor of Boubyan KD Money Market Fund II, to stop committing the violation.”
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.