DFSA fines company for unlicensed financial services

Logo of Dubai Financial Services Authority.

The Dubai Financial Services Authority (DFSA), the independent regulator of banking, financial services and markets at the Dubai International Financial Centre (DIFC), imposed a fine of $109,200 (or AED 401,000) on Volt Wealth Limited for carrying out financial services in or from the DIFC without obtaining an authorization from the authority.

According to a DFSA statement, the company agreed to settle the matter, resulting in a 30% reduction of the original fine amount of $156,000 (or AED 573,000).

The authority clarified that the company is incorporated in ADX Global Market and licensed by the local financial regulatory authority there, but it had not previously obtained a license from DFSA to provide financial services in or from the DIFC.

The company violated the prohibition on financial services stipulated in Article 41(1) of the Regulatory Law 2004, by engaging in the following activities without the required authorization from DFSA, including:

- Providing advice on financial products.

- Arranging transactions in investments.

The authority added that company employees worked from February to May 2024 out of Volt Technology Limited’s offices, a related entity based in DIFC and not regulated by the authority. During this period, potential clients were invited to the office in DIFC, where Volt Wealth provided financial advice and assisted clients with the process of registering on an investment platform. Potential clients also submitted "Know Your Customer" documents for the purpose of opening investment accounts.

It also noted that the office did not clarify that the entity in DIFC was separate from Volt Wealth, which could have led potential clients meeting Volt Wealth employees at DIFC to believe Volt Wealth was licensed by DFSA to provide financial services in or from the DIFC.

The authority said the company’s senior management was aware of the need to obtain a DFSA license.

However, despite this knowledge, Volt Wealth did not proceed to obtain the required license and continued to provide financial services in or from the DIFC. Senior management also failed to take any action regarding concerns raised at the time by Volt Wealth’s compliance officer about the lack of proper licensing. DFSA considered these factors as aggravating elements when determining the value of the fine.

The authority reiterated its commitment to developing, managing, and implementing the highest regulatory standards for financial services within the Dubai International Financial Centre (DIFC).