CMA urges investors to read terms and conditions of funds

CMA

The Capital Market Authority (CMA) has urged investors in the local stock market to read the terms and conditions of investment funds, as well familiarize themselves with their memorandum of information and understand the degree of risks borne by the customer.
CMA also advised investors to consult financial advisers in case they did not fully understand information related to investment funds before signing an agreement to subscribe in it.
According to data compiled by CMA's investor complaints department, the number of complaints and inquiries received in Q2, 2016, increased by 31 percent to 239 cases, in comparison to 182 cases received in Q1.
As for other investor complaints data in Q2, statistics reveal that the number of complaints related to investment portfolios reduced by 33 percent to 16 complaints. Complaints related to agreements and contracts between investors and authorized persons (financial institutions licensed by CMA) reduced by 83 percent to two complaints only.
On the contrary, complaints related to investment funds increased by 15 percent to 15 complaints. Complaints related to IPO subscriptions and rights purchase have also increased to 4 cases. Complaints related to management of portfolios by individuals increased 124 percent to 38 cases, whereas complaints related to listed companies’ profits increased by 271 percent to 26 complaints.
CMA receives complaints, which are related to the capital market, such as those related to investment funds, selling IPO shares at a cost lower than specified and the cancellation or suspension of service without referring to the client, and the inefficiency of the authorized person in managing the portfolio.
Other examples of complaints received by CMA include market manipulation to influence the price of shares of listed companies, complaints against authorized persons for violating rules and regulations related to authorized persons issued by CMA, complaints filed against CMA regarding traders in the market or authorized persons, and the execution of securities transactions.