CmaBoardReleases
Title: Announcement regarding issuance of Disciplinary Board Resolution No. (36/2022 Disciplinary Board) (213/2021 Authority) and imposition of a fine against: KFIC Brokerage Company for violating the rules and the provisions of (Module Sixteen) of the Executive Bylaws of Law No. 7 of 2010 and their amendments
Announcement regarding issuance of Disciplinary Board Resolution No. (36/2022 Disciplinary Board) (213/2021 Authority) and imposition of a fine against: KFIC Brokerage Company for violating the rules and the provisions of (Module Sixteen) of the Executive Bylaws of Law No. 7 of 2010 and their amendments
For the following reasons:
- Provision of Article (2-8) of Module Sixteen of Law No. 7 of 2010 and their amendments, for the repeated violation by the Company of the provisions of the aforementioned article, as it was found by reviewing the Company’s bank statement that it had accepted cash deposit operations from some clients as commissions for transactions that had been completed outside the platform.
2- Provision of Article (3-5) of the aforementioned Module, for the repeated violation by the Companyof the provisions of the aforementioned article, as it was found, by reviewing the selected sample of clients, that the Company did not collect the complete and correct data about some clients and their financial status.
3- Provision of Article (3-7-2) of the aforementioned Module, due to the Company’s repeated violation of the aforementioned article, as it was found by examining the list of clients that the Company was not committed to obtaining sufficient identification data for (3) clients, contrary to the classification of other clients, which does not make it clear whether these clients are from a high-risk country or not.
As well as the ineffectiveness of the agreement concluded between the Company and ..……Company regarding providing the Company or the Authority with any of the required data regarding the actual beneficiaries, due to the failure of the ........ Company to provide the Company with the required information (due diligence documents) by the Authority represented by the inspection team regarding the actual beneficiaries referred to above.
4- Provision of Clause (2) of Article (3-19) of the aforementioned Module, when it was found by examining a sample of clients that the Company did not take some strict due diligence measures represented in obtaining additional information related to the source of clients’ funds for all clients of the high risk category among the sample.
5- Provision of Article (3-20) of the aforementioned Module, when it was found by examining the selected sample of clients the inefficiency of the system followed to determine whether the client, potential client, or actual beneficiary is from the category of politicians with high risks.
6- Provision of Article (4-1) of the aforementioned Module, due to the Company’s repetition of violating the provisions of the above-mentioned article, as it was found that the procedures followed in updating client data are ineffective, as the Company does not update client data periodically and continuously, as well as the lack of a clear pattern in data update.
It was also proven by examining the selected sample of the Company's clients that it did not update the official documents and the know-your-client form for one of its clients, in addition to failure to complete the data of the electronic civil ID of another client, which shows the ineffectiveness of the policy used in updating the data.
The Resolution included the infliction of the following penalty: -
"KFIC Brokerage Company is fined an amount of one thousand Dinars for each of the attributed violations."
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 Laws 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.