Title: Announcement Regarding Issuance of Disciplinary Board Resolution No. (73/2024 Disciplinary Board) - (87/2024 Authority) and imposition of a fine against: Kuwait and Middle East Financial Investment Company (KMEFIC) for violating the rules of Capital Adequacy Regulations for Licensed Persons

Announcement Regarding Issuance of Disciplinary Board Resolution No. (73/2024 Disciplinary Board) - (87/2024 Authority) and imposition of a fine against: Kuwait and Middle East Financial Investment Company (KMEFIC) for violating the rules of Capital Adequacy Regulations for Licensed Persons

For the following reasons:
1) Violation of the provision of Article (3-1) of Module Seventeen (Capital Adequacy Regulations for Licensed Persons) of the Executive Bylaws of Law No. 7 of 2010 and their amendments, it was proven to the Authority through reviewing the capital adequacy report for the period ending on 30/6/2024 for Kuwait and Middle East Financial Investment Company (KMEFIC) a decline of the Company’s capital adequacy percentage below the legal limit, through the purchase of a property on 6/3/2024 through its subsidiaries, where the decrease rate reached 24% as of 30/6/2024, and the reason for this decrease is mainly due to the increase in the Company’s investments, as the Company increased its investments by 6.2 million Kuwaiti dinars during that period.

The Resolution included the infliction of the following penalty: -

“First: Rejection of the payment claim due to a previous ruling on the case.

Second: Levying a fine against Kuwait and Middle East Financial Investment Company (KMEFIC) in an amount of KWD 5000 (five thousand Dinars) for the attributed violation, with the necessity of addressing the Eligible Regulatory Capital to reach 100% or more than the Risk Based Capital Requirement”.

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.