Title: Announcement regarding issuance of Disciplinary Board Resolution No. (06/2023) Disciplinary Board - (152/2022) Authority and imposition of a fine against Boubyan Capital Investment Company (K.S.C closed) for violating 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. (06/2023) Disciplinary Board - (152/2022) Authority and imposition of a fine against:

Boubyan Capital Investment Company (K.S.C closed).

For violating the provisions of Module Sixteen of the Executive Bylaws of Law No. 7 of 2010 and their Amendments.

For the following reasons:
1- The Company’s continuous failure to comply with the provision of Item (6) of Article (2-3) of Module Sixteen of the Executive Bylaws of Law No. 7 of 2010 and their Amendments:
The following remarks were proven to the CMA in a strict manner through reviewing the risk study and the mechanism of classifying the risks of the Company’s clients:
1) The Company did not include some countries that do not apply the recommendations of the Financial Action Task Force in full within the list of higher risk countries. It was also proven to the CMA through reviewing the segment of clients that the Company has classified one of its clients as medium risk.
2) The Company failed to classify the risks of some clients in accordance with its applicable mechanism. In addition, some differences were proven in the mechanism of classifying the clients’ risks at the Company.

2- The Company’s continuous failure to comply with Article (3-5) of the same Module:
It was proven to the CMA in a strict manner through reviewing the selected sample of clients that the Company failed to obtain valid and full data on some clients and their financial situation. This is due to its failure to determine the annual income and the clients’ net worth accurately and its failure to meet some of the Items of Know Your Client form (KYC) for some clients.

3- The Company’s continuous failure to comply with the provisions of Items (1, 2, 3, and 4) of Article (3-6) of the same Module and its continuous failure to comply with the provisions of Items (1, 2, 3, and 4) of Article (3-8) of Module Sixteen of the Executive Bylaws of the CMA’s Law:
It as proven to the CMA in a strict manner through reviewing the selected sample of the Company’s clients that the Company failed to verify some of the original documents of some clients and the beneficial owners within them. It also failed to understand the ownership structure of one of its clients and did not identify it for its beneficial owners. In addition, it failed to obtain information on the purpose and nature of the business relationship of one of its clients.

4- Violation of the provision of Item (2) of Article (3-19) of the same Module:
It was proven to the CMA in a strict manner that the Company failed to perform enhanced due diligence on the selected sample of higher risk clients.

5- Violation of the provision of Article (3-20) of the same Module of the same Executive Bylaws:
It was proven to the CMA in a strict manner through examining a sample of the Company’s clients that the company failed to identify whether some of its clients and some of the beneficial owners within the main clients are Politically Exposed Persons (PEPs) due to their position, which led to the failure to classify them as high risk clients.

6- The Company’s continuous failure to comply with Article (3-37) of the same Module:
It was proven to the CMA in a strict manner through the selected sample of the Company’s clients that the company failed to ensure that the executed transactions of some of its clients are consistent with the information they obtained that are related to their business and source of their funds.

7- Violation of Article (6-1) of the same Module:
It was proven to the CMA in a strict manner that the Company failed to set adequate policies and procedures to ensure the implementation of all the obligations mentioned in the Article subject of the violation.

The Resolution included the infliction of the following penalty: -

"Levying a fine against Boubyan Capital Investment Company in an amount of KWD 10000 (ten thousand Dinars) for the attributed violations due to correlation.”

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.