CmaBoardReleases
Title: Announcement regarding issuance of Disciplinary Board Resolution No. (51/2023) Disciplinary Board (65/2023) Authority and imposition of a fine against: EFG-Hermes IFA Brokerage Company for violating the rules of Securities Exchanges and Clearing Agencies and Conduct of Business
Announcement regarding issuance of Disciplinary Board Resolution No. (51/2023) Disciplinary Board (65/2023) Authority and imposition of a fine against:
EFG-Hermes IFA Brokerage Company
for violating the rules of Securities Exchanges and Clearing Agencies and Conduct of Business
For the following reasons:
First:
Violating the Provisions of Article (2-5-3) of Module Four (Securities Exchanges and Clearing Agencies) of the Executive Bylaws of Law No. 7 of 2010 and their Amendments, due to the Company’s failure to comply with Article (5-4-1-2) of the Kuwait Clearing Company’s Rulebook , it was proven by inspection of the selected sample of clients that the Company sold securities for a number of heirs accounts which is against what article (5-4-1-2) stipulated from the aforementioned rulebook issued by Kuwait Clearing Company.
Second:
- The provision of Article (6-1) of Module Eight (Conduct of Business) of the Executive Bylaws of Law No. 7 of 2010 and their Amendments.
- The provision of Item (C/2) of (1. Telephone Conversations) of (Second: Means of receiving clients’ orders, and mechanism of keeping them) of Appendix No. (1/ Standards of Record Keeping Systems) of Module Eight (Conduct of Business) of the Executive Bylaws of Law No. 7 of 2010 and their Amendments.
- The provision of Item (d) of (Electronic Correspondence) of (Second: Means of receiving clients’ orders, and mechanism of keeping them) of Module Eight (Conduct of Business) of the Executive Bylaws of Law No. 7 of 2010 and their Amendments.
The following was proven:
1. The Company’s failure to register all the details in the records (the Name of the source and its capacity) for all the orders done by investigation of a sample of clients.
2. the receiving order mechanism (order type) in the sent orders of some clients are not unified with receiving order mechanisms registered in the Company’s record.
The Resolution included the infliction of the following penalty: -
“Levying a fine on EFG-Hermes IFA Brokerage Company in an amount of KWD 1,000 (one thousand Dinars) for each of the first and second attributed violations , and dismiss the case otherwise”.
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.