Law No. 7 of 2010 and its Executive Regulations require the CMA licensed companies for custodian activity to submit the Assurance Report on IT Systems of Custodian Activity.
On 22 June 2017, Capital Markets Authority issued the Resolution No. 95 of 2017 concerning the addition of Custodian Activity Criteria, which sets forth that a licensed person shall provide CMA with annual report issued by an external audit firm, which is independent of the licensed person. Such report shall contain:
- Evidence that the necessary IT systems are in place as required to enable the custodian to perform its roles in consistency with the volume and nature of activities it offers and in line with the IT systems, which the custodian handles with the clearing agency and the securities bourse.
- Statement of the customers’ assets including the arrangements that ensure compliance with the requirements set forth in Article (3-2) of Module 7.
Article (2) of the Resolution sets forth that companies licensed by CMA to carry on the Custodian activity shall fulfill the requirements set forth in such Resolution not later than 21 June 2018.
A custodian provides assets custody services on behalf of clients including the safeguarding of the customer’s assets, associated administration functions, disposal of assets and strict compliance with all duties related to such custody. Furthermore, a custodian may keep assets of both Kuwaiti and non-Kuwaiti customers. Modules Five, Six, Seven and Thirteen of the CMA Executive Regulations set out the custodian’s roles and responsibilities in detail.
Added value to business entities from Assurance Report on IT Systems of Custodian Activity
- Comply with laws, regulations, resolutions and instructions issued by Capital Markets Authority.
- Protect the customers’ funds and assets and promote their interests and investments.
Services offered by Baker Tilly
Prepare the Annual Assurance Report from an independent external audit firm on Compliance with Custodian’s IT Systems Criteria by the licensed person in accordance with the requirements of Resolution No. 95 of 2017.