Monitor of Kuwait Central Bank on Exchange Companies

Any company licensed to engage in money exchange activities such as buying and selling currencies, travelers’ checks and money orders, trading in precious metals, and collecting checks and draughts drawn abroad is referred to as an exchange company.

The supervision of those working in the exchange profession by the Central Bank of Kuwait is an important matter in order to rationalize and develop the work of the exchange profession, and to engage the exchange business in its specific field without crossing over into the practice of other businesses that fall into the core of banking business.


The Central Bank monitors requests to establish exchange companies.

When the Ministry of Commerce transfers requests to establish exchange companies in Kuwait to the Central Bank of Kuwait, the Central Bank ensures that the financial market has a need to establish the required company, that the company’s capital is suitable for carrying out its activities, that the company’s objectives are limited to practicing the exchange profession, and that there is a need to the presence of the foreign partner in the event of lack of power.


Registration in the Central Bank’s exchange company register

The registration application must be submitted to the Central Bank on the form provided by the Central Bank. An official copy of the company’s memorandum and articles of association, as well as all documents supporting the data in the registration application, must be attached to the registration application. No exchange company may operate unless it is listed in the Companies Register. Transact with the Central Bank.

Oversight of the exchange company’s amendment of its memorandum or articles of incorporation


Exchange companies must notify the Central Bank of any changes to their articles of incorporation or articles of association, or to the data recorded in the register, that they intend to make. There will be no changes.


Providing exchange companies with guidelines for their operations

According to Article 71 of the Central Bank of Kuwait Law, the Central Bank may provide exchange companies with the instructions it deems necessary to organize their business and achieve the Central Bank’s credit or monetary policy objectives.


Putting in place a system for inspecting exchange companies


In accordance with Article 78 of its law, the Central Bank may establish a system for inspecting exchange companies to ensure the soundness of their activities and financial conditions, as well as the accuracy of the information and data they send to the Central Bank, and other matters that the Central Bank deems necessary to monitor.


Employees of the Central Bank who are authorized to inspect have the authority to inspect accounts, books, records, documents, and any other documents deemed necessary for the inspection work, as well as to request any member of the board of directors, the manager, or any employee of the exchange company to submit data and provide information deemed necessary for the purposes of the inspection, and the books are examined. And records and documents at the company’s headquarters that obtained the inspection.


The Central Bank compiles a detailed report on the findings of each inspection of exchange companies. The report includes recommendations for measures that the Central Bank believes will be useful in correcting the improper conditions revealed by the inspection.

The Central Bank Governor sends a copy of the report to the Chairman of the Board of Directors or the manager of the exchange company, and the Governor of the Central Bank may set a deadline for the company to remove the violations and correct the improper conditions revealed by the inspection.


Control of exchange companies’ balance sheets

According to Article 81 of the Central Bank Law, exchange companies must submit their balance sheet and profit and loss account to the Central Bank within three months of the end of their fiscal year.

Monitoring exchange company statements and statements

In accordance with Article 82 of its law, the Central Bank may request from exchange companies the data, statements, and statistical information that it deems necessary to carry out its tasks in controlling these companies.


Applying Sanctions

The Central Bank may impose the appropriate sanctions set forth in Article 85 of the Central Bank Law on any exchange company that violates the provisions of its memorandum of association or articles of association, or the instructions issued by the Central Bank to exchange companies, or that fails to provide the required data and information, or that provides data that does not match the truth.


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