United Investment Bank in Dubai has been fined by the Dubai Financial Services Authority (DFSA) for a number of failings in relation to its custodial services.
UIB was also ordered not to provide any custodial services until it had implemented measures including remedying its systems and controls to the satisfaction of the DFSA.
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The UIB , which was launched in May 2011, was fined after the DFSA investigated the manner in which it was providing custody to six funds in 2012.
The investigation revealed that UIB did not maintain adequate systems and controls and had corporate governance deficiencies which prevented it from acting the best interests of the company.
Furthermore, for one of its funds, the bank failed to provide custody services to a client entirely, even though it had been contracted to do so according to the fund’s prospectus.
In another case, UIB’s sister entity was acting as a custodian on behalf of the bank’s clients even though the affiliate was not an authorised firm by the regulator.
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By GlobalDataThe regulator said: "Corporate governance deficiencies prevented UIB’s management from acting in the best interest of the firm."
