Saxo Bank Dubai censured by DFSA for due diligence failings
The Dubai Financial Services Authority (DFSA) has “censured” Saxo Bank for client due diligence failings which the regulator said increased the risk of the DIFC being used as a money-laundering hub.
According to a DFSA statement, Saxo Bank Dubai admitted breaching client “take-on” and anti-money laundering procedures, following an investigation by the regulator into the bank’s activities.
The DFSA said Saxo Bank Dubai failed to:
• Properly classify clients;
• Enter into client agreements with clients;
• Obtain sufficient and satisfactory verification of clients’
• identities, permanent addresses and sources of wealth;
• Perform ongoing due diligence on clients;
• Adequately monitor client transactions; and
• Establish and maintain appropriate systems and controls in relation to Politically Exposed Persons (PEPs).
The DFSA said: “These failings increased the risk of Saxo Bank's Dubai International Financial Centre business being used for the purposes of money laundering. However, the DFSA found no evidence of any money laundering having taken place.”
The regulator noted that the failings were a result of the bank referring clients to its Danish parent company and not carrying out sufficient procedures for client classification locally, as required by the DIFC.
Stephen Glynn, the DFSA’s head of enforcement, said: “The DFSA expects all firms, as part of their compliance regimes, to establish and maintain strong and effective know your client, AML and counter terrorist financing systems and controls.
“Clients, therefore, should expect Firms in the DIFC to request information from them to confirm their identity, residential address and source of funds. The request for this information is to fulfill not only the Firms’ obligations under the DIFC Laws and Rules but also the Federal Law and international standards.”