Dubai, UAE: The Dubai Financial Services Authority (DFSA) published today a Decision Notice against Sarwa Digital Wealth Limited, a DFSA regulated and Dubai International Financial Centre incorporated company (Sarwa DIFC).
The DFSA imposed a financial penalty of USD 191,100 (AED 701,815) on Sarwa DIFC, reduced from USD 390,000 (AED 1,432,275) following mitigation and settlement discounts.
The mitigation discount included recognition of the following:
- on being advised by the DFSA that the offer of shares may have contravened DFSA law, it immediately took action to halt the share sale and arranged for the prompt return of all monies to the investors; and
- a related Sarwa entity is also being fined by the Financial Services Regulatory Authority (FSRA) of Abu Dhabi Global Market (ADGM).
The DFSA took action against Sarwa DIFC for making an Offer of Securities to the Public in or from the DIFC without an Approved Prospectus, in breach of the Markets Law.
The first email offering the sale of Sarwa Digital Wealth (BVI) Limited shares (parent company of Sarwa DIFC and Sarwa Digital Wealth (Capital) Limited based in ADGM (Sarwa ADGM)) was sent to almost 100,000 users. USD 2 million in commitments was received into an escrow account from over 150 potential investors.
The DFSA also found that Sarwa DIFC withheld financial information, that would have been included in an Approved Prospectus, and provided positive metrics that gave potential investors a misleading impression about the financial performance and position of Sarwa DIFC and Sarwa ADGM (collectively referred to as Sarwa).
Coordination with FSRA
The DFSA and the FSRA of ADGM have worked closely to make their investigations more efficient, including joint communications with Sarwa, joint interviews with Sarwa staff and others, common information requests, and the sharing of intelligence and findings. The coordination between the DFSA and the FSRA of ADGM demonstrates the value of UAE regulatory bodies working together to uphold market integrity and reduce regulatory arbitrage.
Ian Johnston, Chief Executive of the DFSA, said: “Protecting retail investors is a key priority for the DFSA and the requirement to issue a DFSA Approved Prospectus is there to do exactly that. I am also very pleased to see the effectiveness of the cooperation between the DFSA and the FSRA of ADGM.”
A copy of the DFSA’s Decision Notices can be found in the Regulatory Actions section of the DFSA website.
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For further information, please contact:
Corporate Communications
Dubai Financial Services Authority
Level 13, The Gate, West Wing
Dubai, UAE
Email: DFSAcorpcomms@dfsa.ae
www.dfsa.ae
About Dubai Financial Services Authority (DFSA)
The Dubai Financial Services Authority (DFSA) is the independent regulator of financial services conducted in and from the Dubai International Financial Centre (DIFC), a purpose built financial free zone in Dubai. The DFSA’s regulatory mandate covers asset management, banking and credit services, securities, collective investment funds, custody and trust services, commodities futures trading, Islamic finance, insurance, crowdfunding platforms, money services, an international equities exchange and an international commodities derivatives exchange. In addition to regulating financial and ancillary services, the DFSA is responsible for administering Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) legislation that applies to regulated firms and Designated Non-Financial Businesses and Professions in the DIFC. Please refer to the DFSA’s website for more information.
Ian Johnston was appointed Chief Executive of the DFSA in 2022, a position he previously held from 2012 to 2018. Originally a lawyer, Mr Johnston held a number of senior positions within the financial sector, including as CEO of one of Australia’s major trustee companies. In 1999, Mr Johnston moved into regulation joining the Australian Securities and Investments Commission as Executive Director, Financial Services Regulation, and spent several terms as an Acting Commissioner. He served as a Special Advisor with the Hong Kong Securities and Futures Commission from 2005. Currently, Mr Johnston serves as Vice Chair of the International Organisation of Securities Commissions’ (IOSCO) Africa and Middle East Regional Committee and as an IOSCO Board member.
