Deutsche Bank must hand over client info to Dubai regulator 
Tuesday, February 11, 2014 at 3:02AM
Julie DiMauro in Credit Europe Bank Ltd., Deutsche Bank, Dubai, EU, Ernst & Young, European Securities and Markets Authority

Deutsche Bank agreed on Monday to turn over documents related to a regulatory probe into the operations of its Dubai-based wealth management division.

The Frankfurt-based lender will hand over the details sought by the Dubai Financial Services Authority (DFSA) within 28 days and pay the regulator's costs, as noted in a DFSA statement on Monday.

The DFSA began proceedings against Deutsche Bank on October 31 to force the bank to submit information about its wealth management division's clients, including the clients' risk assessment ratings.

The court proceedings stemmed from a December 2012 investigation of the bank for possible violations of DFSA rules regarding due diligence, risk-assessment requirements, having adequate systems and controls, client classification and suitability issues.

Deutsche Bank refused to supply the documents, arguing that Swiss law prevented it from disclosing certain client information. The bank missed two deadlines to provide the requested documents, so the DFSA brought the bank to court.

In court, the DFSA successfully argued that the bank had not "identified the precise basis" for how the Swiss criminal code prohibited it from disclosing this information.

As Dubai has risen in stature as a prominent financial center, the DFSA has stepped up its enforcement activity and signed cooperative agreements with other national regulatory bodies.

In the past few years, DFSA has issued fines against a number of global banks and accounting firms. They include actions against Ernst & Young for accounting and audit failures and against Credit Europe Bank (Dubai) Ltd. and a top executive there for systems and controls failures related to its trading activities.

It has also signed agreements with the EU and the European Securities and Markets Authority, enabling it to increase its regulatory oversight over a variety of entities, such as credit-rating agencies.

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Julie DiMauro is the executive editor of FCPA Blog and can be reached here.

Article originally appeared on The FCPA Blog (https://www.fcpablog.com/).
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