The Dubai Financial Services Authority (DFSA) has announced that a Dubai firm, FFA Private Bank has been fined AED1,373,122 ($370,000) for lack of adequate systems to identify, assess and report trading which indicated suspicions of market abuse.
The violations have been recorded between February 2018 and March 2021. This action was following the prohibition imposed by the authority in 2021 which was then lifted a few months later following the FFA’s ability to demonstrate DFSA addressed the weaknesses in its systems.
The system weaknesses meant that the firm failed to take relevant steps against suspicious trading, a risk which may have facilitated market abuse.
Ian Johnston, Chief Executive of the DFSA, commented: “Authorised Firms are the first line of defence in protecting the integrity of financial markets. By failing to ensure that it had effective arrangements in place to identify instances of suspicious trading by its clients, FFA facilitated trading which had the characteristics of market abuse for a long time.
The authority described FFA’s approach towards assessing suspicious trading as “flawed”. The company outsourced responsibility for client trading assessment but failed to effectively supervise these activities.
“This case serves as a reminder that firms cannot rely blindly on those to whom they delegate responsibility for the performance of key compliance activities. Steps must be taken to ensure processes are operating effectively as it is ultimately the Authorised Firm that will be accountable if things go wrong,” he added.