Abu Dhabi Global Market's financial regulator has fined investment platform Sarwa Digital Wealth (Capital) $122,500 for breaching rules on offering securities.
The penalty was levied after Sarwa was found making an offer of securities at ADGM without an approved prospectus during April and May last year, breaching Financial Services Regulatory Authority regulations, the financial centre said on Tuesday.
A prospectus must be approved by the FSRA and should contain all information that an investor would “reasonably require to make an informed decision in relation to the investment”, ADGM said.
Without the prospectus, potential investors “were not provided with sufficient information to make an informed decision in relation to the investment”, it said.
A total of 144 investors subscribed to the offer and committed about $2.1 million, ADGM data showed.
Sarwa, however, immediately reversed all committed subscriptions after the FSRA notified them of the concerns, ADGM said.
The FSRA’s investigation was co-ordinated with the Dubai International Financial Centre (DIFC), whose Dubai Financial Services Authority (DFSA) conducted its own investigation on a company linked to Sarwa within its jurisdiction.
The DFSA said it imposed a penalty of $191,100 on Sarwa Digital Wealth, a DFSA regulated and DIFC incorporated company (Sarwa DIFC), for making an offer of securities to the public in or from the DIFC without an approved prospectus, in breach of the Markets Law.
The DFSA also found that Sarwa DIFC withheld financial information that would have been included in an approved prospectus, and provided positive metrics that gave potential investors a misleading impression about the financial performance and position of Sarwa DIFC and Sarwa ADGM, collectively referred to as Sarwa, DFSA said in a statement.
Sarwa, which advises traders on stocks, exchange-traded funds and cryptocurrencies, declined to comment to The National.
ADGM, opened in 2015, is home to international banks, insurance houses, global asset managers as well as financial technology and cryptocurrency exchanges. It maintains a strict oversight of companies operating in its jurisdiction.
In February, it fined Baker Tilly and its audit principal $62,500 for auditing failures, and six financial institutions more than $46,000 for contraventions in their reporting.
In October last year, it also levied a $486,000 penalty on FinTech company Pyppl for breaking anti-money laundering rules. In August, it hit KPMG Lower Gulf with a $30,000 fine for breaching audit rules.
“This enforcement action demonstrates the FSRA’s robust regulatory approach to its regulatory framework, ensuring investor protection is of paramount importance and making sure all regulated entities maintain high standards of conduct,” Emmanuel Givanakis, chief executive of the FSRA, said.
The move “demonstrates the strong collaborative approach between UAE regulators through co-operating and sharing information in parallel investigations, thereby safeguarding the UAE’s financial ecosystem and protecting its investors”, Mr Givanakis said.
Sarwa has more than 150,000 registered users. It utilises algorithms to rate an investor’s risk tolerance and assigns them an investment portfolio of exchange-traded funds, charging them lower advisory fees than traditional financial advisers and wealth managers.
In August 2021, Sarwa raised $15 million in a funding round led by Abu Dhabi's Mubadala Investment Company. The series B round brings the trading platform’s total funding from regional and international investors to about $25 million since it was founded, the company said at the time.
The%20Killer
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Joe Root's Test record
Tests: 53; Innings: 98; Not outs: 11; Runs: 4,594; Best score: 254; Average: 52.80; 100s: 11; 50s: 27
RESULTS
5pm Wathba Stallions Cup Maiden (PA) Dh70,000 (Dirt) 1,400m
Winner Munfared, Fernando Jara (jockey), Ahmed Al Mehairbi (trainer)
5.30pm Handicap (PA) Dh70,000 (D) 1,600m
Winner Sawt Assalam, Szczepan Mazur, Ibrahim Al Hadhrami
6pm Maiden (PA) Dh70,000 (D) 1,800m
Winner Dergham Athbah, Pat Dobbs, Mohamed Daggash
6.30pm Handicap (PA) Dh70,000 (D) 1,800m
Winner Rajee, Fernando Jara, Majed Al Jahouri
7pm Conditions (PA) Dh80,000 (D) 1,800m
Winner Kerless Del Roc, Fernando Jara, Ahmed Al Mehairbi
7.30pm Handicap (TB) Dh70,000 (D) 2,000m
Winner Pharoah King, Pat Dobbs, Doug Watson
8pm Conditions (PA) Dh85,000 (D) 2,000m
Winner Sauternes Al Maury, Dane O’Neill, Doug Watson
11 cabbie-recommended restaurants and dishes to try in Abu Dhabi
Iqbal Restaurant behind Wendy’s on Hamdan Street for the chicken karahi (Dh14)
Pathemari in Navy Gate for prawn biryani (from Dh12 to Dh35)
Abu Al Nasar near Abu Dhabi Mall, for biryani (from Dh12 to Dh20)
Bonna Annee at Navy Gate for Ethiopian food (the Bonna Annee special costs Dh42 and comes with a mix of six house stews – key wet, minchet abesh, kekel, meser be sega, tibs fir fir and shiro).
Al Habasha in Tanker Mai for Ethiopian food (tibs, a hearty stew with meat, is a popular dish; here it costs Dh36.75 for lamb and beef versions)
Himalayan Restaurant in Mussaffa for Nepalese (the momos and chowmein noodles are best-selling items, and go for between Dh14 and Dh20)
Makalu in Mussaffa for Nepalese (get the chicken curry or chicken fry for Dh11)
Al Shaheen Cafeteria near Guardian Towers for a quick morning bite, especially the egg sandwich in paratha (Dh3.50)
Pinky Food Restaurant in Tanker Mai for tilapia
Tasty Zone for Nepalese-style noodles (Dh15)
Ibrahimi for Pakistani food (a quarter chicken tikka with roti costs Dh16)
Results
ATP Dubai Championships on Monday (x indicates seed):
First round
Roger Federer (SUI x2) bt Philipp Kohlschreiber (GER) 6-4, 3-6, 6-1
Fernando Verdasco (ESP) bt Thomas Fabbiano (ITA) 3-6, 6-3, 6-2
Marton Fucsovics (HUN) bt Damir Dzumhur (BIH) 6-1, 7-6 (7/5)
Nikoloz Basilashvili (GEO) bt Karen Khachanov (RUS x4) 6-4, 6-1
Jan-Lennard Struff (GER) bt Milos Raonic (CAN x7) 6-4, 5-7, 6-4
UAE squad
Humaira Tasneem (c), Chamani Senevirathne (vc), Subha Srinivasan, NIsha Ali, Udeni Kuruppuarachchi, Chaya Mughal, Roopa Nagraj, Esha Oza, Ishani Senevirathne, Heena Hotchandani, Keveesha Kumari, Judith Cleetus, Chavi Bhatt, Namita D’Souza.
FIXTURES
UAE’s remaining fixtures in World Cup qualification R2
Oct 8: Malaysia (h)
Oct 13: Indonesia (a)
Nov 12: Thailand (h)
Nov 17: Vietnam (h)
Mercer, the investment consulting arm of US services company Marsh & McLennan, expects its wealth division to at least double its assets under management (AUM) in the Middle East as wealth in the region continues to grow despite economic headwinds, a company official said.
Mercer Wealth, which globally has $160 billion in AUM, plans to boost its AUM in the region to $2-$3bn in the next 2-3 years from the present $1bn, said Yasir AbuShaban, a Dubai-based principal with Mercer Wealth.
“Within the next two to three years, we are looking at reaching $2 to $3 billion as a conservative estimate and we do see an opportunity to do so,” said Mr AbuShaban.
Mercer does not directly make investments, but allocates clients’ money they have discretion to, to professional asset managers. They also provide advice to clients.
“We have buying power. We can negotiate on their (client’s) behalf with asset managers to provide them lower fees than they otherwise would have to get on their own,” he added.
Mercer Wealth’s clients include sovereign wealth funds, family offices, and insurance companies among others.
From its office in Dubai, Mercer also looks after Africa, India and Turkey, where they also see opportunity for growth.
Wealth creation in Middle East and Africa (MEA) grew 8.5 per cent to $8.1 trillion last year from $7.5tn in 2015, higher than last year’s global average of 6 per cent and the second-highest growth in a region after Asia-Pacific which grew 9.9 per cent, according to consultancy Boston Consulting Group (BCG). In the region, where wealth grew just 1.9 per cent in 2015 compared with 2014, a pickup in oil prices has helped in wealth generation.
BCG is forecasting MEA wealth will rise to $12tn by 2021, growing at an annual average of 8 per cent.
Drivers of wealth generation in the region will be split evenly between new wealth creation and growth of performance of existing assets, according to BCG.
Another general trend in the region is clients’ looking for a comprehensive approach to investing, according to Mr AbuShaban.
“Institutional investors or some of the families are seeing a slowdown in the available capital they have to invest and in that sense they are looking at optimizing the way they manage their portfolios and making sure they are not investing haphazardly and different parts of their investment are working together,” said Mr AbuShaban.
Some clients also have a higher appetite for risk, given the low interest-rate environment that does not provide enough yield for some institutional investors. These clients are keen to invest in illiquid assets, such as private equity and infrastructure.
“What we have seen is a desire for higher returns in what has been a low-return environment specifically in various fixed income or bonds,” he said.
“In this environment, we have seen a de facto increase in the risk that clients are taking in things like illiquid investments, private equity investments, infrastructure and private debt, those kind of investments were higher illiquidity results in incrementally higher returns.”
The Abu Dhabi Investment Authority, one of the largest sovereign wealth funds, said in its 2016 report that has gradually increased its exposure in direct private equity and private credit transactions, mainly in Asian markets and especially in China and India. The authority’s private equity department focused on structured equities owing to “their defensive characteristics.”
Zayed Sustainability Prize
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