CmaBoardReleases
Title: Announcement Regarding Issuance of Disciplinary Board Resolution
Capital Markets Authority announces issuance of a Disciplinary Board Resolution passed in its meeting held on Thursday 19/5/2016 on violation No. (22/2016 Disciplinary Board) (56/2016 Authority) filed against: AL-Madina for Finance and Investment Company.
That is by: "warning the Company of the consequences of repeating the committed violations".
This punishment is due to the following violations:
1- Not disclosing to the CMA, to the Exchange or to the issuer that the cumulative interest is achieved. It reached 13.8% of the capital of one of the companies as occurred on 30/11/2014, which violates Articles No. (382,384) of the previous Executive Bylaws of Laws No. 7 of 2010 which corresponds to Article (2-1-3) of Chapter Two (Disclosure of Interest) of Module Ten (Disclosure and Transparency) of the Executive Bylaws of Law No. 7 of 2010 and its amendments.
2- Not disclosing to the CMA, to the Exchange or to the issuer the change that occurred in the company’s direct and indirect ownership in one of the companies. It reduced by 1.7% from 30/9/2014 to 30/11/2014, which violates Article (102) of the Law and Article (385) of the previous Executive Bylaws of Law No. 7 of 2010, which corresponds to Article (7-2-1) of Module Ten (Disclosure and Transparency) of the Executive Bylaws of Law No. 7 of 2010 and its amendments.
3- Depositing six cheques of due amounts in an account designated for clients’ portfolios which one of the brokerage companies issued in the name of (AL-Madina Company - Clients) due to the existence of a legal attachment by a number of creditors on the bank accounts of AL-Madina for Finance and Investment Company, which violates Article (215) of the previous Executive Bylaws of Law No. 7 of 2010, which corresponds to Article (3-1) of Module Seven (Clients’ Funds and Clients’ Assets) of the Executive Bylaws of Law No. 7 of 2010 and its amendments.
4- Utilizing clients’ funds for the interest of other clients’ portfolios from 1/11/2013 to 31/10/2014. The company also enabled some of its clients to conclude purchase transactions of shares and cash withdrawals without having sufficient balance in their portfolios for concluding such transactions, as a result the portfolios became overdrawn and other clients’ funds were used to cover the purchase transactions and cash withdrawals, which violates Articles (216,217) of the previous Executive Bylaws of Law No. 7 of 2010, that corresponds to Article (1-2) of Module Seven (Clients’ Funds and Clients’ Assets) of the Executive Bylaws of Law No. 7 of 2010 and its amendments.
5- Depositing a total of KD 450,000 on 28/2/2013 and on 31/3/2013 in a portfolio by mistake and only correcting such mistake on 5/1/2014 without notifying the CMA, which violates Article (233) of the previous Executive Bylaws of Law No. 7 of 2010, which corresponds to Article (2-4) of Module Seven (Clients’ Funds and Clients’ Assets) of the Executive Bylaws of Law No. 7 of 2010 and its amendments.
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.