The Dubai Financial Services Authority (DFSA), the independent regulator overseeing banking, financial services and markets in the Dubai International Financial Centre (DIFC), has imposed a fine of USD 455,176 (AED 1,671,633) on reinsurance broker Ed Broking (MENA) Limited for multiple breaches of DFSA regulations, including misleading and deceptive conduct.
The firm agreed to resolve the matter through a settlement, which includes disgorgement of USD 175,343 — comprising USD 148,039 plus USD 27,304 in interest — alongside a penalty of USD 279,833. The total sanction was reduced from an original USD 575,104 (AED 2,112,069) following the settlement agreement.
According to the DFSA, the firm provided cedent insurers and reinsurers with differing premium figures for the same reinsurance placements, misrepresented premium deductions and brokerage commissions to reinsurers, and misled a client about the brokerage earned on 121 placements, as well as related premium deductions on some of those transactions.
The regulator said the misconduct was enabled by the firm’s failure to disclose brokerage commissions to clients and its lack of adherence to its own systems and controls. The breaches also involved the use of altered documentation.
The DFSA further found that the firm did not take reasonable steps to ensure its communications with cedent insurers and reinsurers were clear, fair and not misleading, and failed to act with the required level of skill, care and diligence.
The authority noted that the firm promptly reported the misconduct, carried out an internal investigation and provided restitution to clients for placements involving altered documents.
Alan Linning, Managing Director of Enforcement at the DFSA, said firms operating in the DIFC are expected to uphold the highest standards of conduct. He added that Ed Broking’s actions fell short of those expectations, and that the fine reflects the seriousness of the misconduct while serving as a warning to others.
The DFSA reaffirmed its commitment to maintaining and enforcing world-class financial regulation within the DIFC, stating it will continue to pursue robust enforcement action and provide clear regulatory guidance to ensure firms meet the highest ethical and regulatory standards.
