- New rules set how partner funds, equity and liabilities must be presented, while strengthening procedures for freezing customer funds in fraud cases.
The Central Bank of Kuwait (CBK) has introduced new accounting and disclosure requirements for electronic payment service providers, electronic contract service providers and electronic payment system operators as part of measures to improve transparency in their financial statements.
Under the new requirements, partners’ current accounts must no longer be included within total partners’ equity. The CBK said such accounts can contain transactions that have the characteristics of assets, liabilities or equity, making their classification under equity inappropriate.
Paid-up capital, reserves, retained earnings and other specified items will instead be classified under partners’ equity, with the equity statement showing changes during the relevant financial period.
Funds provided by partners to support capital or business activity will also be treated according to their repayment terms. Where a repayment date exists, the funds must be shown separately under liabilities, with their nature, balances and conditions disclosed.
Funds provided without a specified repayment date will be presented separately under partners’ equity, with details of their nature and conditions.
Withdrawals or short-term obligations linked to partners taking back their funds must be shown separately under assets, along with the nature of the balances and their repayment dates.
The CBK also directed that agendas for ordinary and extraordinary general assemblies be submitted to the bank for prior approval before the meetings are held.
Measures to freeze customer funds
Separately, the CBK set procedures for exchange companies, electronic payment service providers, electronic contract service providers and electronic payment system operators participating in the virtual central chamber established to combat electronic financial fraud.
The entities must establish dedicated institutional email addresses to receive correspondence from judicial authorities affiliated with the Ministry of Justice, including requests to freeze or seize customer funds or disclose account balances.
They must also allocate email channels specifically for such notifications and activate notification features on the designated addresses.
The virtual chamber is described as a sovereign operational system for handling electronic financial fraud, linking banking supervision with security and judicial authorities under the Ministry of Interior and the Public Prosecution.
The measures come as fraud methods targeting customers include fake communications, fraudulent data-update links, misleading advertisements and false prize claims.
