State of Kuwait K S E Anti-Money Laundering Regulations

Anti-money Laundering and Terrorism Financing Regulations
Based upon the interests of K S E :

Article ( 1 ) :

The brokers and third parties portfolios management companies may not deal with any person towards whom such companies may have reasons to suspect his true identity or the source of his funds. These companies are required to report the competent authorities of such suspicions. The dealing room shall not open any dealing account to persons with unknown identity or open accounts with code number or false accounts.

Article ( 2 ) :

The application for opening an account and the attached forms shall include full information about the name of the account holder; his ID card number, profession, activity, purpose for which the account is opened, and other relative information. Valid photocopies of the following shall be attached to the application of opening the account:

  • Copy of Civil ID care for Kuwaiti citizens and other residents of Kuwait .
  • Copy of passport information pages for non-Kuwaitis.
  • Copy of the license issued by the Ministry of Commerce & Industry for Kuwaiti companies and establishments and Memorandum & Articles of Association .
  • Copy of the Memorandum & Articles of Association of non-Kuwaiti companies or incorporation documents, provided that they are attested by the competent authorities.

Article ( 3 ) :

The brokers and third parties portfolios management companies shall make sure from its dealers whether the accounts they are dealing with are their own or belong to a third party. They have to make sure of the name of those beneficiaries, if any, and the reasons of refraining from dealing directly in their names with K S E.

Article ( 4 ) :

The third parties portfolios management companies shall request from their customers copies and declarations mentioned in the two articles above .

Article ( 6 ) :

The third parties portfolios management companies shall provide to the brokers through whom they are dealing a declaration stating that they are not dealing in favor of persons not known to them and that all dealings made by them are related to accounts holders who are the true beneficiaries of such accounts.

Article ( 6 ) :

If the account is opened in the name of a non-Kuwaiti person or entity, the clearing room shall have a statement approved by the competent authority specifying the headquarters or the head office of that entity outside Kuwait, and that the persons representing that person or entity are legally authorized by the account holder.

Article ( 7 ) :

The brokers, clearing room and companies managing the third party portfolios shall notify the KSE management immediately if any party of them has any information that the documents submitted by the account holder are not authentic or if they suspect the authenticity thereof. If this has been discovered after the opening of account, then the account balance whether in form of shares or cash may not be delivered to the account holder or the agent thereof unless after obtaining the approval of KSE management.

Article ( 8 ) :

The clearing room, brokers and companies managing the third party portfolios shall keep records that include complete details of the names of their clients, addresses and transactions made in their favors, names of those to whom the account balances are delivered for five years commencing from the date of closing the accounts thereof.

Article ( 9 ) :

If the broker has good reasons indicating that the account holder or manager has requested a transaction which does not accord with his previous transactions in terms of volume, value, or in amounts larger than the capabilities thereof, or does not go in line with the prevailing conditions in the market, then he has to notify the clearing room and KSE management. The shares or funds subject of the deal shall be delivered after making sure of the identity of the account holder, sources of funds through which he covers the deal, unless the Prosecution General has been informed of the incident.

Article ( 10 ) :

Unless the party who issues orders to the broker is the concerned account holder, the broker shall obtain from the party who issued the order an evidence that such party is authorized by the account holder and shall obtain in writing all the details related to the data of this party and supporting copies proving the identity of the party who issued the orders.

Article ( 11 ) :

The brokers and third parties portfolios management companies shall exchange information between each other regarding the suspected dealers and the decision made by KSE management in respect of them. Such information may not be disclosed to parties other than those concerned.

Article ( 12 ) :

The brokers and third parties portfolios management companies shall exert due diligence to select their staff and apply control regulations on their performance of work. The KSE management shall be informed of the names of staff members who were discharged from service, or those who were subject to disciplinary measures for reasons related to the implementation of this resolution with statement of the reasons thereof.

Article ( 13 ) :

The brokers and third parties portfolios management companies and clearing room shall adopt the policies necessary to improve the performance of its staff in the field of discovering the money laundering and terrorism financing within the framework of laws and decisions applicable in this regard .

Article ( 14 ) :

No measure shall be taken and no administrative penalty shall be applied to any staff of KSE, companies managing the third party portfolios or clearing room as a result of his reporting bona fide of any suspected transactions related to the money laundering and terrorism financing, and it is proven later that his suspicions are baseless.

Article ( 15 ) :

The clearing room, brokers and third parties portfolios management companies are prohibited from accepting any cash amounts for fulfilling the obligations of their customers. They have to comply with the payments means approved by the local banks, provided that the name of the dealer’s account holder accords with the name of the holder of the banking account through which payment is made.

Article ( 16 ) :

The party responsible of carrying out the business of the clearing room, brokers and third parties portfolios management companies shall submit to KSE management within 30 days from the date of application of this resolution, a declaration including the following :

  • That it is aware of all the terms of law number 35 / 2002 regarding anti-money laundering and combating of terrorism, its executive decisions and that it has to implement them.
  • That they set forth the rules and regulations necessary to ensure the implementation of the law and specified the persons responsible for implementation, with the statement of rules and names of these persons.
  • That it will organize the necessary training programs for its staff at various levels to improve and develop their performance level in the field of anti-money laundering and terrorism financing and such programs shall be stated.
  • That it will apply to the dealing accounts of its staff, if any, the same rules applied to the customers’ accounts regarding anti-money laundering and terrorism financing .

Article ( 17 ) :

These regulations shall apply from the date of issue thereof. The Deputy Manager for dealing affairs shall implement them .