Deutsche Bank AG agreed to hand over documents related to a probe into the operations of its Dubai-based wealth management division after being taken to court by the emirate’s financial free zone regulator.
The Dubai Financial Services Authority began proceedings against the Frankfurt-based lender at the Dubai International Financial Centre Courts on Oct. 31 in an attempt to force the bank to comply with its investigation. Deutsche Bank agreed to submit the documents within 28 days and pay the regulator’s costs, the authority said Feb. 9 in a statement.
The regulator began investigating the bank in December 2012 for “suspected contraventions” of rules on due diligence, risk assessment requirements and controls, according to the October filing, made public on Nov. 17. Deutsche Bank said in the case that documents disclosing certain information would contravene Swiss law.
The DFSA said it will continue the investigation into Deutsche Bank’s wealth-management business, without giving more detail. Michael Lermer, a spokesman for Deutsche Bank in Dubai, declined to comment.
SEC Majority Wants to Review Exchanges’ Special Oversight Status
A majority of the five-member U.S. Securities and Exchange Commission wants the agency to review whether stock exchanges should continue to have regulatory roles that include overseeing members who may run competing venues.
Advocates of such a review say the special status creates benefits and burdens for exchanges such as IntercontinentalExchange Group Inc. (ICE)’s New York Stock Exchange: They must compete with venues that don’t have to follow as many rules while also having a level of authority over brokers that operate the competing trading systems.
Exchanges’ self-regulatory functions are enshrined in the federal securities laws and predate the creation of the SEC in 1934. The exchanges held onto benefits from their special status such as the sale of lucrative market data and limits on private lawsuits against them, even as they became for-profit entities. At the same time, exchanges must publish and seek approval for their rules.
The Securities Industry and Financial Markets Association, which represents brokers, say the self-regulatory model also creates conflicts of interest for exchanges by asking them to regulate members that operate competing trading venues.-Bloomberg
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