Dfsa fines Ark Capital Management Dubai limited $504,000 for market abuse controls and reporting breaches

Government

Dfsa fines Ark Capital Management Dubai limited $504,000 for market abuse controls and reporting breaches

The Dubai Financial Services Authority (DFSA) has imposed a fine of $504,000 (Dh1.85 million) on Ark Capital Management (Dubai) Limited for deficiencies in market abuse monitoring systems and for failing to notify the regulator about a proposed change in control.

In a statement issued on February 6, the DFSA said the firm had inadequate market abuse systems and controls and did not meet regulatory notification requirements tied to ownership changes.

According to the regulator, Ark Capital Management had systems designed to flag trading patterns linked to potential market abuse. However, the firm failed to properly assess and act on alerts generated by those systems, and in some cases did not review them promptly. As a result, at least ten suspicious trading instances were either overlooked or not reported to the DFSA in a timely manner through Suspicious Transaction and Order Reports.

Alan Linning, Managing Director of Enforcement at the DFSA, said regulated firms are required to maintain effective oversight to prevent and detect market abuse.

He noted that market integrity depends on participant vigilance and that firms must have appropriate systems in place to detect suspicious activity and report it immediately when there are reasonable grounds for suspicion.

The DFSA also found that the company failed to notify the regulator about a proposed change in control. While the ownership change did not ultimately proceed, an agreement allowed an investor to acquire 9.5% of the firm’s shares, with an option to increase the stake to 90% once certain conditions were met.

Ark Capital Management considered that because the initial acquisition was below the 10% threshold that requires prior DFSA approval, notification was not necessary. The DFSA said this interpretation was incorrect, stressing that firms must still notify the regulator of potential control changes even if transactions are structured in stages below approval thresholds.

Linning added that transparency is fundamental to the DFSA’s relationship with regulated firms and that notification obligations apply to proposed controller changes, including staged or conditional ownership arrangements.

The DFSA said it will continue enforcing regulatory standards within the Dubai International Financial Centre (DIFC) and maintaining strict oversight to ensure firms meet governance, reporting, and market conduct requirements.