DFSA orders FFA Private Bank's Dubai arm to halt trading for certain clients

Regulator cites 'concerns about the adequacy of its systems and controls' to prevent market abuse

The Dubai Financial Services Authority, the regulator of the emirate's financial hub, imposed restrictions on FFA Private Bank (Dubai). Sarah Dea / The National

The Dubai Financial Services Authority (DFSA), the regulator of the emirate's financial hub, imposed restrictions on FFA Private Bank (Dubai) that prohibit it from "receiving, arranging or executing orders" on behalf of specific clients.

The DFSA said it had concerns about the adequacy of the bank's systems to identify and report trading that gives rise to "suspicions of market abuse relating to certain clients". The prohibition will remain in place until FFA is able to demonstrate that it has addressed weaknesses, it said in a statement on Wednesday.

“The DFSA will take strong action to protect the integrity of financial markets,” Bryan Stirewalt, chief executive of the DFSA, said.

“We will not hesitate to restrict the activities of firms where there are concerns over the adequacy of their processes to prevent or detect market abuse".

FFA Private Bank is a wholly-owned subsidiary of Lebanon’s FFA. The lender offers private wealth and asset management services as well as capital markets, corporate and investment banking products, according to its website.

The DFSA said it identified a significant number of instances of suspicious trading activity undertaken by FFA on behalf of its clients from March 2018 to February 2020. However, it did not name the clients.

“The DFSA considers that the prohibition is necessary to ensure the financial system is not adversely affected," it said.

"The identification and prevention of market abuse are key to the proper functioning and integrity of financial markets, including to ensure that those possessing inside information are not able to take unfair advantage of this at the expense of other market participants.”

The DFSA is the independent regulator of financial services conducted in and from the Dubai International Financial Centre (DIFC). Its regulatory mandate covers asset management, banking and credit services, securities, collective investment funds, custody and trust services, commodities futures trading and Islamic finance.

It also has oversight of insurance, crowdfunding platforms, money services, an international equities exchange and an international commodities derivatives exchange within Dubai’s financial hub.

FFA is cooperating with the DFSA to resolve the issues that sparked intervention, according to the statement.