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Dubai’s financial regulator censures Saxo Bank unit

Says Saxo Bank Dubai failed to comply with rules; Censure follows investigation by DFSA; Bank unit admitted breaching rules, changed processes

March 20, 2011 4:34 by



Dubai’s financial regulator on Sunday said it censored the local unit of privately-held Danish lender Saxo Bank for its failure to comply with rules regarding intake of clients and anti-money laundering controls.

The Dubai Financial Services Authority (DFSA) said in a statement that failure by Saxo Bank Dubai Limited (SBDL) increased the risk of the bank’s business in Dubai being used for money laundering.

DFSA said it conducted an investigation and found that the bank referred its clients to its parent, Saxo Bank in Denmark, and did not carry out sufficient client classification according to the rules set by the emirate’s financial regulator, Dubai International Financial Centre (DIFC).

“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,” Ian Johnston, deputy chief executive and managing director of the DFSA said in the statement.

The financial regulator said it found no evidence of any money laundering having taken place.

The censure followed admission by SBDL that it breached rules, including procedures to properly classify clients, obtain sufficient and satisfactory verification and perform ongoing due diligence of clients.

On Sunday, Jakob Beck Thomsen, CEO of Saxo Bank Dubai, said in an emailed statement that the DFSA’s message showed the bank “acted in good faith and thus not received any fine.”

Thomsen said his bank found it “unsatisfactory” that it unintentionally did not meet the DFSA’s conduct of business rules. The bank “has promptly cooperated with the DFSA and put new processes in place” that fully meets local demands, he said.

Financial firms in Dubai have to be on the watch for funds from Tunisia that may be funnelled through the Gulf Arab emirate, DFSA had said in January.

(Reporting by Dinesh Nair, Editing by Richard Borsuk)



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