Title: Announcement Regarding Issuance of Disciplinary Board Resolution on Violation No. (29/2021 Disciplinary Board - 04/2021 Authority)

The Capital Markets Authority announces the issuance of Disciplinary Board Resolution passed in its meeting held on Tuesday June 15, 2021 on violation No. (29/2021 Disciplinary Board - 04/2021 Authority) filed against: KFH Capital Investment Company.

The operative part of the Resolution resulted in the aforementioned being convicted of violating the following:

1- The provision of Item (2) of Article (3-19) of Module Sixteen (Anti-Money Laundering and Combating Financing of Terrorism) of the Executive Bylaws of Law No. 7 of 2010 and their amendments, due to the Company’s failure to take one of the strict due diligence measures mentioned in the above-mentioned item on the category of high-risk clients.

2- The provision of Item (5) of Article (3-19) of the aforementioned Module, due to the Company’s failure to obtain the approval of the senior management to accept dealing with clients of the high-risk category, and only obtained the approval of the Deputy Director of Asset Management as shown in the matrix of assets management powers provided by the Company.

3- The provision of Article (3-37) of the aforementioned Module, due to the Company’s failure to adapt the capacity of the system used to monitor clients operations so that it can monitor the operations that are fragmented by the clients, the total of which exceeds the limits of the amounts that the system has been set to monitor, which does not enable the Company to constantly monitor its clients.

4- Violation of the provisions of the Capital Markets Authority Circular No. (13) of 2019 issued on September 15, 2019 and contained in the provision of Article (23) of Ministerial Resolution No. (35) of 2019 regarding the Executive Bylaws of the Committee for the Implementation of Security Council Resolutions issued under Chapter Seven from the Charter of the United Nations related to combating terrorism and financing the proliferation of weapons of mass destruction, due to the lack of procedures followed by KFH Capital Investment Company regarding the continuous follow-up of the names on the national list issued by the relevant Committee at the Ministry of Foreign Affairs and its updates regarding the names of the Company’s clients, where the Company only stated abide by the foregoing in its anti-money laundering and terrorist financing policy, which constitutes the Company’s violation of the provisions of the aforementioned decision.

The decision included the infliction of the following penalty: -
“The violating 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.