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20 March 2011 — DFSA Censures Saxo Bank for Client Take-On and AML Systems and Controls Failings
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Mar 20 2011 onwards

20 March 2011 — DFSA Censures Saxo Bank for Client Take-On and AML Systems and Controls Failings



Dubai, UAE, 20 March 2010: The Dubai Financial Services Authority (DFSA) today censured Saxo Bank Dubai Limited (SBDL) for its failure to comply with the DFSA's Rules regarding the on-boarding of clients.

The censure followed admissions by SBDL that it had breached the client take-on and anti-money laundering (AML) systems and controls requirements in the DFSA's Rules by failing 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).

These failings increased the risk of SBDL's Dubai International Financial Centre (DIFC) business being used for the purposes of money laundering. However, the DFSA found no evidence of any money laundering having taken place

SBDL consented to the DFSA's censure.

The censure arises from a DFSA investigation into the conduct of SBDL which found that SBDL's failures arose, in part, because SBDL referred its clients to its parent, Saxo Bank A/S in Denmark, and did not carry out sufficient client classification in accordance with the Laws and Rules of the DIFC.

In censuring SBDL, the DFSA acknowledges the mitigating factors in regard to SBDL's conduct, which are set out in the censure.

Mr Ian Johnston, Deputy Chief Executive and Managing Director of the DFSA said, "The DFSA considers the know your client and AML systems and controls of Firms in the DIFC to be of fundamental importance to maintaining the DIFC's integrity."

Mr Stephen Glynn, DFSA's Head of Enforcement said, "The DFSA vigilantly supervises and detects systems and control failures relating to know your client, AML and counter terrorist financing obligations. The DFSA expends considerable resources educating the regulated community in respect of these obligations and will take strong action to enforce the applicable Laws and Rules when lapses occur."

"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."

Censure:

A copy of the censure is posted on the DFSA website: https://www.dfsa.ae/What-We-Do/ENFORCEMENT#Regulatory-Actions