The Dubai Financial Services Authority has hit Ark Capital Management (Dubai) Limited with a $504,000 (Dh1.85 million) fine after finding significant shortcomings in the firm’s market-abuse controls and shortcomings in ownership disclosure. The penalty follows a DFSA probe into Ark’s systems, governance and its compliance with rules that apply inside the Dubai International Financial Centre.
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Market abuse monitoring failures identified
The DFSA said Ark didn’t have fit-for-purpose systems and controls to spot, assess or escalate suspicious trading quickly. In plain terms, alerts produced by the firm’s market surveillance tools weren’t being handled properly.
That lapse showed up in delayed — and in some cases missing — Suspicious Transaction and Order Reports (STORs). The regulator found instances where trading activity ought to have triggered a report, but it either didn’t happen or was submitted so late that it undermined market integrity.
Breach of ownership disclosure rules
The regulator also concluded Ark failed to tell the DFSA about a proposed change in control, as DIFC rules require. The firm had an agreement under which an investor took a 9.5 per cent stake and held an option that could lift the holding to as much as 90 per cent, depending on certain conditions.
Ark’s view was simple: because the initial shareholding stayed below 10 per cent, there was nothing to disclose. The DFSA disagreed. It said the mere existence of an agreement that could confer control was enough to trigger the notification duty — whether or not the option was exercised.
Regulator’s position
The DFSA stressed that authorised firms must keep strong governance frameworks, reliable compliance systems and clear escalation routes — especially around market-abuse detection and ownership transparency. Failures in these areas, the regulator said, leave markets exposed and chip away at confidence in the DIFC’s rulebook.
Firm details
Ark Capital Management (Dubai) Limited is authorised and regulated by the DFSA and operates from the DIFC. The DFSA added that it will continue to take enforcement action where firms fall short, emphasising that timely STORs and clarity around ownership are basic regulatory obligations.
