The Dubai Financial Services Authority (DFSA) announced, today, that it had accepted an Enforceable Undertaking (EU) from United Investment Bank Limited (UIB), a Dubai International Financial Centre (DIFC) Authorised Firm.
• to pay a financial penalty of AED 183,500 (USD $50,000) to the DFSA; and
• to not Provide Custody to any persons until it had implemented measures including remedying its systems and controls to the satisfaction of the DFSA.
The EU resulted from a DFSA investigation into the manner in which UIB was Providing Custody. During 2012, UIB was contracted to provide custodian services for six funds.
The investigation revealed that:
• UIB did not maintain adequate systems and controls to comply with DFSA’s safe custody requirements;
• corporate governance deficiencies prevented UIB’s management from acting in the best interest of the Firm; and
• for one of its funds, UIB had failed to provide any custodian services even though it was contracted to do so and was identified as the fund’s custodian in the fund’s Offering Memorandum. Further, UIB knew this and failed to notify the DFSA until nine months later.
UIB co-operated with the DFSA’s investigation.
A copy of the EU can be found in the public register of the DFSA website under Regulatory Actions.
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