The Dubai Financial Services Authority (DFSA) has issued the findings of its review into client classification and suitability practices at regulated firms and found that, while these practices have improved since the last review in 2012, concerns still remain.
These concerns include insufficient training and guidance for the staff performing client classification assessments, inadequate sand unclear supporting documentation, and an over-reliance on a tick-box approach rather than detailed and qualitative assessment.
The DFSA also noted its unease about the continued use of ‘suitability wavers’ in client agreements to limit liability and obligations in respect of suitability.
The DFSA has issued a number of recommendations to its regulated firms “to ensure clients’ interests are properly considered and protected” which include developing appropriate policies and procedures, providing training programmes for all client-facing staff.
“All firms must keep in mind that client classification and suitability assessments, and all forms of investor protections, are and will continue to be very high DFSA priorities and will feature in the DFSA’s future supervisory agenda,” warned Ian Johnston, chief executive of the DFSA.
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