DFSA fines Vault Wealth $109,200 over unauthorised services

Dubai: The Dubai Financial Services Authority (DFSA) has fined Vault Wealth Limited (VWL) $109,200 (Dh401,000) for providing financial services in or from the Dubai International Financial Centre (DIFC) without the regulator's authorisation.

The fine was reduced by 30% from $156,000 (Dh573,000) after VWL agreed to settle the matter, the DFSA said on Thursday.

VWL is incorporated in Abu Dhabi Global Market (ADGM) and is licensed by its Financial Services Regulatory Authority (FSRA). Its permitted activities include advising on investments or credit and arranging investment deals.

The DFSA said that authorisation did not permit VWL to provide regulated financial services in or from DIFC, where the company has never been authorised by the DFSA.

According to the regulator, VWL breached Article 41(1) of the Regulatory Law 2004 by providing financial services in or from DIFC without the required authorisation. The activities included advising on financial products and arranging deals in investments.

Between February and May 2024, VWL employees worked from the offices of a related DIFC company, Vault Technology Limited, which was not regulated by the DFSA.

Prospective clients were invited to the DIFC office, where VWL provided financial advice and helped them onboard onto an investment platform, according to the regulator. Clients also supplied know-your-customer documents to facilitate the creation of investment accounts.

The DFSA said the DIFC office did not make clear that the DIFC entity was separate from VWL. It said this could have led prospective clients meeting VWL personnel at the office to believe that the company was authorised by the DFSA to provide financial services in or from DIFC.

The regulator said VWL's senior management knew that DFSA authorisation was required but did not proceed with obtaining it while the company continued providing the services.

Senior management also failed to act on concerns raised by VWL's then compliance officer over the absence of the required licence, the DFSA said. It treated these issues as aggravating factors when determining the financial penalty.

Alan Linning, Managing Director, Enforcement, at the DFSA, said authorisation by another regulator does not allow a company to conduct financial services in or from DIFC.

“The prohibition against providing financial services in or from DIFC without the required DFSA authorisation is fundamental to the integrity of the DIFC’s regulatory framework and to the protection of those who use, or may use, financial services within the Centre,” Linning said.

“Authorisation by another regulator does not permit a firm to conduct financial services in or from DIFC. Firms must ensure that they have the appropriate DFSA authorisation before undertaking regulated activity here.”

He said the enforcement action showed that the regulator would intervene when firms operated outside its regulatory perimeter and impose sanctions reflecting the seriousness of the conduct.