Kuwait Capital Markets Authority imposes KD 5,000 fines on EFG Hermes EVA Financial Brokerage Company and its internal audit officer for securities activities and governance breaches

The Kuwait Capital Markets Authority’s Disciplinary Board issued Resolution No. 38/2025 imposing financial penalties on EFG Hermes EVA Financial Brokerage Company and the firm’s internal audit officer after finding breaches of requirements on securities activities and registered persons, business ethics, and corporate governance. The firm was fined KD 5,000 for each of three violations: failures in the governance and oversight of a long-standing outsourced services contract for internal audit, risk management and other technical services (including missing feasibility assessment, lack of the Authority’s approval, no third-party business continuity plan, and failure to comply with a one-fiscal-year assignment requirement), discrepancies between how some customer orders were received and how order receipt was recorded in the order book, and providing incorrect information in its 2023 and 2024 corporate governance reporting (including on internal control review reporting, external auditor appointment, committee responsibilities, remuneration policy preparation, and board meeting records). The internal audit officer was fined KD 5,000 for internal audit reports in 2023 and 2024 that did not meet required content and did not include observations on compliance with relevant laws, policies, systems and instructions, against a backdrop of inspection findings pointing to weaknesses in internal controls, board and committee practices, risk policy limits, related-party transaction review responsibilities, and access controls to the broker order-receiving room.