CIMA highlighted several violations, including:

Failure to file annual declarations - Breach of Section 5(4E)(a) of the SIB Act due to non-submission of declarations for 2024 and 2025.

Non-payment of annual fees and penalties - Failure to pay fees and penalties for 2024 and 2025, contravening Section 5(4E)(b).

Lack of proper directorship - Breach of Section 15(4)(a) for not maintaining a minimum of two individual directors or one eligible corporate director.

Non-compliance with CIMA directions - Breach of Section 34(17)(a) of the Monetary Authority Act for failing to meet regulatory requirements and directions.

Failure to maintain a registered office - Violation of Section 50(1) of the Companies Act (2023 Revision).

These breaches indicate an alarming lack of compliance, governance, and communication.

Proposed enforcement action

CIMA has proposed to revoke the registration of the Securities - Registered Person under Section 17(2A) of the SIB Act. Justifications for this action include:

• Failure to comply with statutory obligations.
• Poor management and governance practices.
• Non-adherence to lawful CIMA directives.

Lessons and best practices for compliance

This enforcement action underscores the importance for financial entities to uphold stringent compliance standards. To avoid similar actions, entities should:

Implement Robust Governance - Ensure directorship meets statutory requirements and actively monitor compliance.

• Timely reporting - File all annual declarations and pay fees punctually to avoid penalties.
• Maintain transparency - Communicate promptly with regulators and respond to their inquiries.
• Review internal controls - Regularly assess compliance frameworks to identify and address gaps.
• Seek expert guidance - Engage legal and compliance professionals for ongoing advisory support.

Final takeaway

Non-compliance carries significant risks, from reputational damage to loss of operating rights. CIMA’s enforcement action serves as a compelling reminder of the critical need for rigorous adherence to regulatory obligations. Institutions must treat compliance as an ongoing priority and as a foundation for trust and sustainability in this highly regulated industry.

The CIMA’s warning notices can be found here.