In: Operations Management
Describe an action a regulatory agency took against a business in the past 6 months. Post a link to your source. Do you agree or disagree with the action? Explain your reasoning.
Answer:-
Capital market authority
Explanation:-
One of the major banks in Kenya, Kenya commercial bank limited, and British American asset management were fined for breach of the capital market authority rules. These financial institutions were fined KSh10.14 million for breaching investment levels in Chase Bank. In its report, capital market authority disclosed that KCB failed to practice its duty of care as a trustee despite noting the increased portfolio growth of deposits in Chase bank,a bank that collapsed in 2016 and its been under receivership since then.
I wholly agree with the decision from the capital market authority to fine KCB because the bank, in open breach of the collective investment schemes regulations, failed to respect the requirement that its collective investment scheme portfolio should not exceed the powers conferred on it. It is such practices that when left unpunished breed an environment where financial institutions can breach regulations as a norm which leads to collapse of the financial sector.
Reference:-
https://www.standardmedia.co.ke/business/article/2001269947/regulator-fines-kcb-britam-sh10-million-for-defying-cma-rules