La Tresorerie, a financial firm in the Dubai International Financial Centre that advises HNW clients in the Middle East about financial products, arranges deals for them in investments and manages and arranges custody for their assets, has been fined for contravening the regulator's 'conduct of business' rules.

The fine consists of US$219,773 plus interest of $41,381, and a penalty amount of $351,636. The dirham of the United Arab Emirates is pegged to the US dollar (1 dirham = 27c) because oil exports are traded in US dollars.

Between 19 February 2015 and 11 January 2017 the firm provided a physical cash withdrawal service to its customers and, by doing so, carried on the Financial Service of Providing Money Services in or from the DIFC without a Licence authorising it to do so, contrary to Article 41(1) of the Regulatory Law. The DFSA's decision notice also accuses it of using false invoices in relation to that cash service.

Between 17 September 2015 and 11 January 2017, in relation to client money paid out as part of that cash service, the firm failed to hold certain amounts of 'segregated' clients' money in bank accounts, contrary to Rule A5.8.2 of the Conduct of Business Module (COB) of in the Dubai Financial Services Authority’s rulebook.

Between 1 February 2016 and 11 January 2017, while holding clients' money, the firm failed to have systems and controls in place to help it show the regulators that it was complying with the parts of COB that deal with clients' money and safe custody, contrary to COB Rule A5.2.2.

The regulator is also blaming the firm for contravening the Principles for Authorised Firms to be found in section 4.2 of the generic part of its rulebook (GEN). These principles are copied almost word-for-word from their British equivalents. As this bespoke a failure of management, the regulator is also accusing the firm of breaking Authorised Firm Principle 3 (on management, systems and controls) in GEN Rule 4.2.3, as well as Authorised Firm Principle 9 (on customers' assets and money), to be found in GEN Rule 4.2.9.

It broke this last rule by not holding clients' money in 'client accounts' at all times when required; by making payments from those accounts that were not in order with the clients' instructions; and by failing to obey the aforementioned rules while holding or controlling clients' money and investments.

The firm first fell under the DFSA's baleful gaze in February 2015, when regulators visited it to assess various risks.

The firm has not benefited from the DFSA's policy of giving firms a discount of up to 30% of its penalties in return for early capitulation to its demands.