Title: Announcement Regarding Issuance of Disciplinary Board Resolution on Violation No. (51/2017 Disciplinary Board) (127/2017 Authority)

The Capital Markets Authority announces issuance of a Disciplinary Board Resolution passed in its meeting held on Wednesday 23/08/2017 on violation No. (51/2017 Disciplinary Board) (127/2017 Authority) filed against:
 
Gulf Investment House Company

The Company shall pay KWD 2000 for each violation of the six violations. 

This punishment is due to the following violations:

1.Violating clause (2) of Article (66) of Law No. 7 of 2010 and its amendments, due to the accumulated loss of the Company which reached KWD 9.4 million. This led to consuming the Company’s capital in the percentage of 43%, and not having a plan for rescheduling the accumulated debt of the Company which reached 372%. 

2. Clause (1) of Article (3-2-6) of Module Five (Securities Activities and Registered Persons) of the Executive Bylaws of Law No. 7 of 2010 and their amendments. The Company did not amend the registration of Mr. Yasser Jomaa at the Authority due to his occupancy of two Registered Employment Positions (Compliance Officer and Risk Management Officer). The Company is obligated not to jointly practice these two jobs.

3. Clause (4) of Article (5-1-7) of Module Seven (Clients’ Funds and Clients’ Assets) of the Executive Bylaws of Law No. 7 of 2010 and their amendments. The Company registered all securities certificates of clients’ subscriptions in the following foreign investments: (Durrat Marina Investment Company – Mada’in Properties Company - Majan Development Company – Gulf Real Estate) in the official records in its name, without obtaining the approval of the official entities in the countries where the investment is located.

4. Clause (4) of Article (5-2-3) of Module Seven (Clients’ Funds and Clients’ Assets) of the Executive Bylaws of Law No. 7 of 2010 and their amendments. The Company did not take any action to correct the situations of the heirs’ portfolios according to the provision of the above mentioned article, in spite of the availability of the determination of heirs of such portfolios at the Company.

5. Clause (1) of Article (5-3-1) of Module Seven (Clients’ Funds and Clients’ Assets) of the Executive Bylaws of Law No. 7 of 2010 and their amendments. The Company did not send comprehensive periodical reports to its clients explaining the content of its investment portfolios. 

6. Clause (7) of Article (1-4) of Module Eight (Conduct of Business) of the Executive Bylaws of Law No. 7 of 2010 and their amendments. A number of portfolios’ contracts of the Company’s clients did not include the expenses and fees relevant to the services presented by the Company.          

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.