CmaBoardReleases
Title: Announcement Regarding Issuance of Disciplinary Board Resolution on Violation No. (14/2018 Disciplinary Board) (14/2018 Authority)
The Capital Markets Authority announces issuance of a Disciplinary Board Resolution passed in its meeting held on Thursday 12/04/2018 on violation No. (14/2018 Disciplinary Board) (14/2018 Authority) filed against:
Kuwait Clearing Company
“First: The Company shall pay a total of KWD 5,000 for each of the following violations: Fourth, Seventh, Eighth, and a total of KWD 2,000 for each of the two violations: Fifth and sixth for using clients funds for its own account, and for not preparing the (Know Your Client) forms for some clients and not complying with record keeping, not submitting a detailed report on the remuneration given for the members of the Board of Directors to refer it to the general assembly, failure to include in the annual report the undertaking from the Board of Directors on the soundness and integrity of the data.
Second: - the violating company shall refund the amount of (909709,252) dinars (nine hundred and nine thousand seven hundred and nine dinars and two hundred and fifty-two fils) the value of the profit gained from the use of clients funds for the financial years 2015-2016.”
The punishment is due to following violations:
4- Provision (2-1) of Module Seven (Clients’ Funds and Clients’ Assets) of the Executive Bylaws of Law No. 7 of 2010 and their amendments, for using clients’ funds in the form of investments as bank deposits and on-demand accounts. The Company records the profits eared as its own annual revenues from 2012 until 2016.
5- Provision (5) of article (4-3) of Module Fifteen (Corporate Governance) of the Executive Bylaws of Law No. 7 of 2010 and their amendments, nomination and remuneration committee’s failure to prepare a detailed annual report for all remunerations given to members of the Board of Directors and executive management members.
6- Failure to comply with Article (5-3) of Module Fifteen (Corporate Governance) of the Executive Bylaws of Law No. 7 of 2010 and their amendments, to include the board of directors undertaking of soundness and integrity of all financial statements in the submitted annual report referred to the general assembly for the ended financial year of 31/12/2016.
7- Article (3-1) of Module Sixteen (Anti-Money Laundering and Combating Financing of Terrorism) of the Executive Bylaws of Law No. 7 of 2010 and their amendments, the company did not prepare a “Know Your Client” form contacting the minimum information required in accordance with the Articles from (3-2) to (3-15) of this chapter, for (184) clients from the selected inspection sample.
8- Article (4-2) of Module Sixteen (Anti-Money Laundering and Combating Financing of Terrorism) of the Executive Bylaws of Law No. 7 of 2010 and their amendments, failure to comply with record keeping requirements of all client identification data where it could not provide CMA’s inspection team with the records of (184) clients out of (204) clients which were requested.
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.