Dubai brokerage firm fined AED 5 million for inadequate compliance

The Dubai Financial Services Authority (DFSA) has imposed a fine of more than AED 5 million ($1.36 million) on a brokerage firm for inadequate compliance systems and controls.

R.J. O'Brien (MENA) Capital Limited was penalised for numerous breaches of DFSA legislation.

The initial fine amount of more than AED 10 million ($2.79 million) was reduced after the firm agreed to rectify the failings and settle the matter.

The DFSA found that the company did not undertake sufficient planning and analysis to ensure it could comply with its ongoing regulatory obligations after acquiring an additional brokerage.

"The firm’s senior management was aware of the lack of compliance resources and failed to adequately address it to ensure that the compliance function was able to fulfil its regulatory obligations," the regulator added.

However, there was no evidence that the firm acted deliberately to violate the DFSA's rules and regulations.

The DFSA confirmed that the company has agreed to remedy the deficiencies in its systems, controls and compliance resources; and engage an external expert to assist in complying with its obligations and to verify that the necessary measures have been completed.

"Compliance is not an incidental cost of doing business, it is a critical function that must be adequately resourced in terms of both number and quality of staff," said Patrick Meaney, Head of Enforcement of the DFSA.