emirates7 - -Ark agreed to settle and received a discount for early settlement. Without that reduction, the DFSA said the fine would have been $720,000 (Dh2.64 million)
The DFSA has fined Ark Capital Management (Dubai) Limited $504,000 (Dh1.85 million) for inadequate market-abuse systems and for failing to notify the regulator about a proposed change in control.
The Dubai Financial Services Authority, which regulates firms in the Dubai International Financial Centre, said Ark had tools to flag suspicious trading patterns but did not properly assess or review the alerts. At least ten trades were missed or reported late.
Alan Linning, Managing Director of Enforcement at the DFSA, said: “The integrity of financial markets relies on the vigilance of its participants. The regulated community has an obligation to ensure that it does not facilitate market abuse. The DFSA requires firms to have in place systems to detect potential instances of market abuse, and to immediately submit a Suspicious Transaction and Order Report, when they have reasonable grounds for suspecting market abuse.”
In a separate breach, Ark did not tell the DFSA about an agreement that could have led to a change in ownership.
Under the deal, an investor bought 9.5 per cent of the firm with the option to increase the stake to 90 per cent later. The investor also gained representation at board and senior management level.
The regulator said that even though the larger transfer never happened, the existence of the agreement meant Ark should have informed the DFSA.
Linning added: “The relationship between the DFSA and the firms it regulates is built on transparency, as such the DFSA expects to be informed of proposed changes to firms’ Controllers. This includes notifying the DFSA of potential changes of ownership, which is specifically required under our rules. Structuring transactions to avoid the need for DFSA approval, such as staggering purchases into tranches that fall below percentage thresholds, does not absolve firms of their separate obligation to notify the DFSA of a potential change in Controllers. This is especially true when there are agreements in place setting out a path that may result in a firm’s ownership changing.”
Ark was set up in the DIFC in September 2013 and authorised by the DFSA later that year to arrange and deal in investments as an agent.
Ark agreed to settle and received a discount for early settlement. Without that reduction, the DFSA said the fine would have been $720,000 (Dh2.64 million).
The DFSA has fined Ark Capital Management (Dubai) Limited $504,000 (Dh1.85 million) for inadequate market-abuse systems and for failing to notify the regulator about a proposed change in control.
The Dubai Financial Services Authority, which regulates firms in the Dubai International Financial Centre, said Ark had tools to flag suspicious trading patterns but did not properly assess or review the alerts. At least ten trades were missed or reported late.
Alan Linning, Managing Director of Enforcement at the DFSA, said: “The integrity of financial markets relies on the vigilance of its participants. The regulated community has an obligation to ensure that it does not facilitate market abuse. The DFSA requires firms to have in place systems to detect potential instances of market abuse, and to immediately submit a Suspicious Transaction and Order Report, when they have reasonable grounds for suspecting market abuse.”
In a separate breach, Ark did not tell the DFSA about an agreement that could have led to a change in ownership.
Under the deal, an investor bought 9.5 per cent of the firm with the option to increase the stake to 90 per cent later. The investor also gained representation at board and senior management level.
The regulator said that even though the larger transfer never happened, the existence of the agreement meant Ark should have informed the DFSA.
Linning added: “The relationship between the DFSA and the firms it regulates is built on transparency, as such the DFSA expects to be informed of proposed changes to firms’ Controllers. This includes notifying the DFSA of potential changes of ownership, which is specifically required under our rules. Structuring transactions to avoid the need for DFSA approval, such as staggering purchases into tranches that fall below percentage thresholds, does not absolve firms of their separate obligation to notify the DFSA of a potential change in Controllers. This is especially true when there are agreements in place setting out a path that may result in a firm’s ownership changing.”
Ark was set up in the DIFC in September 2013 and authorised by the DFSA later that year to arrange and deal in investments as an agent.
Ark agreed to settle and received a discount for early settlement. Without that reduction, the DFSA said the fine would have been $720,000 (Dh2.64 million).
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