Dubai Regulator Withdraws Forsyth Licence

by Lorys Charalambous, for LawAndTax-News.com, Cyprus

28 August 2007

The Dubai Financial Services Authority (DFSA) has withdrawn the licence of Forsyth Partners Global Distributors Limited to carry on financial services activities in or from the Dubai International Financial Centre (DIFC), after the firm failed to meet the applicable regulatory capital requirements, and was unable to demonstrate a capacity to remedy that breach.

The DFSA took the action following the issuance of a Notice to Forsyth on 22 August, 2007 requesting it to show cause why the DFSA should not withdraw its licence.

The DFSA also withdrew the licence of Forsyth’s subsidiary Forsyth Partners (Middle East) Limited (Forsyth Middle East), at the request of Forsyth Middle East, which was also licenced by the DFSA to carry on financial services activities in or from the DIFC.

Both firms were Category 4 firms authorised to arrange credit or deal in investments, and to advise on financial products or credit. Category 4 firms are not authorised to accept client money and therefore, withdrawal of the licence does not place DIFC client funds at risk.

Forsyth was given until Sunday August 26 to show that it met regulatory requirements, following the issue of the notice by the DFSA ordering the firm to stop all activity that might prejudice its clients or creditors.

Forsyth said in a statement it agreed with the withdrawal of its DIFC financial services licences, and that its exit from Dubai was part of its global restructuring strategy. Forsyth has reportedly recently been focusing on the European market, with the opening of a European distribution unit in London.

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