Global Investigations Review - The law and practice of international investigations

Securities & Related Investigations

Last verified on Monday 23rd September 2019

United Arab Emirates

Mark Beswetherick, Nicholas Braganza, Matthew Shanahan and Andre Abou Aad
Clyde & Co LLP

    Regulatory environment

  1. 1.What are your country’s primary securities or related law enforcement authorities? 
  2. In the United Arab Emirates (the UAE) outside the financial free zones (Onshore UAE)

    The primary authority for securities regulation in Onshore UAE is the Emirates Securities & Commodities Authority (the SCA). However, until the SCA was established in 2000[1], the UAE Central Bank (the Central Bank), which was established in 1980[2], and which currently regulates banking activities, was historically the primary authority for regulating securities and related activities.

    In 2008, the Central Bank and the SCA signed a memorandum of understanding (MoU) to determine each regulator’s jurisdiction in relation to regulation, licensing, supervision and inspection of activities in the financial services sector. The separate jurisdiction of the SCA and the Central Bank was further defined following the enactment of a new Banking Law[3] in 2018, which defined the Central Bank's regulatory jurisdiction in respect of banking and related activities.

    Currently, the SCA is the regulator for all the exchanges located in Onshore UAE (ie, the Dubai Financial Market or DFM and the Abu Dhabi Securities Exchange or ADX), securities and commodities listed in the Onshore UAE, investment funds, financial analysis and consultancy services and financial promotions in Onshore UAE.

    Notwithstanding the above, there remains an element of uncertainty regarding the respective jurisdictions of the Central Bank and the SCA in certain areas, since the Central Bank has yet to enact the regulations that are necessary for implementing the new Banking Law, and its legacy regulations, which cover securities-related activity remain in force.

    However, in practice, the SCA enforces UAE securities laws, and this paper is has been drafted on the assumption that the SCA is the exclusive authority for securities regulation in Onshore UAE. Additionally, the SCA's regulatory policies are generally not published and are subject to change without notice. Therefore, this paper reflects the authors' current experience and understanding of SCA policy and rules and the UAE law and practice in general.

    It is also important to note that there is no doctrine of binding precedent in Onshore UAE. Court decisions in the UAE are persuasive, but not binding on the lower courts (although they can serve as a guide to general principles), nor is there comprehensive reporting of cases as in common law jurisdictions. Furthermore, since judgments are not always published, it is difficult to gauge accurately the nature of awards and trends in this regard. Court judgments are issued in summary form and contain minimal legal and factual analysis. This makes advising on Onshore UAE securities and related investigations somewhat challenging.

    In the UAE Financial Free Zones (FFZs)

    The UAE currently has two FFZs: the Dubai International Financial Centre (DIFC) in Dubai, and the Abu Dhabi Global Markets (ADGM) in Abu Dhabi. FFZs are common law jurisdictions established under federal decrees, complete with their own courts, laws and regulations, and where Onshore UAE civil and commercial laws are disapplied.

    The Dubai Financial Services Authority (DFSA) and the Financial Services Regulatory Authority (FSRA) are the financial services regulators in the DIFC and the ADGM respectively. Both regulators have exclusive jurisdiction for securities and related law enforcement matters.

    In the DIFC, the Regulatory Law[4] is the cornerstone of the DFSA regulatory regime, and sets out the DFSA’s powers and functions in respect of securities investigations and enforcement. In the ADGM, the Financial Services and Markets Regulations[5] (the FSMR) are the FSRA's equivalent legislation setting out the regulator’s powers and functions in respect of securities investigations and enforcement. Neither the DFSA nor the FSRA have any jurisdiction in relation to matters which fall under the UAE criminal laws. Their jurisdiction is purely civil and administrative.

    The ADGM is the newer of the two FFZs. It was established in 2013, while the DFSA was established almost a decade earlier in 2004. The FSRA has recently begun taking enforcement action after a period of focus on attracting financial institutions to the ADGM. The regulatory regime in the ADGM is closely aligned with that of the DIFC. Given the nascent nature of securities investigations and enforcement in the ADGM, the analysis in this paper on FFZs focuses on the DIFC and the DFSA, with references to the ADGM or the FSRA when there is a distinction to be made.

    The DFSA and the FSRA license and regulate entities carrying on specified financial services activities in their respective jurisdictions. This includes exchanges such as Nasdaq Dubai and the Dubai Mercantile Exchange which are located in the DIFC. At the date of drafting this note, there is no regulated exchange established in the ADGM[6]. However, one or more exchanges are in the process of applying for licensing in the ADGM. In this paper, any reference to a DFSA "rule" or "regulation" is a reference to the rule under the relevant DFSA Rulebook module.

    Regarding the other (non-financial) UAE free zones, although these have a degree of autonomy, they are still part of Onshore UAE (ie, they do not have their own jurisdiction) and, therefore, fall within the jurisdiction of the SCA in respect of securities investigations and enforcement.

    Criminal action

    In Onshore UAE, certain breaches of securities laws and regulations carry a criminal sanction (ie, a fine and/or prison term). This brings such breaches within the remit of criminal prosecution authorities, namely the Police and the Public Prosecution, whose main role is to prosecute general crimes set out in the Penal Code[7] and other federal laws.

    The Central Bank is the ultimate authority for the regulation of anti-money laundering (AML) in the UAE. It can, in addition to imposing its own administrative sanctions, refer AML matters to the Public Prosecution, which prosecutes money laundering (ML) crimes in the UAE criminal courts.

    We note that although civil and commercial laws are disapplied in the FFZs, criminal laws are not. Therefore, UAE Criminal Laws (which includes the Penal Code, the AML Law[8], the Counter-terrorism Law[9] (CT Law), and the Cybercrime Law[10]) apply in the FFZs, and the Police and Public Prosecution have jurisdiction over such matters in the FFZs, as they do in Onshore UAE.



    [1] Pursuant to Federal Law No.4 of 2000 on the Emirates Commodities and Securities Authority and Market (the SCA Law).

    [2] Established pursuant to Federal Law No.10 of 1980 on the Central Bank, the Monetary System and the Organization of Banking.

    [3] Federal Decretal Law No.14 of 2018 on the "Central Bank and the Organisation of Financial Institutions and Activities".

    [4] DIFC Law No.1 of 2004.

    [5] ADGM Financial Services and Markets Regulations 2015.

    [6] Notwithstanding any crypto-currency or token exchanges.

    [7] Federal Law No.3 of 1987.

    [8] Federal Decree by Law No.20 of 2018.

    [9] Federal Law No.7 of 2014.

    [10] Federal Law No.5 of 2012.

  3. 2.What are the principal violations or legal issues that the securities or related law enforcement authorities investigate?
  4. The SCA, DFSA and FSRA (the UAE Securities Regulators) investigate a wide spectrum of breaches of their regulations and enabling laws within their respective jurisdictions.

    In Onshore UAE, the SCA investigates primarily breaches of the listing rules by listed companies, conduct of business violations by brokers, corporate governance breaches and market abuse.

    In the DIFC, the DFSA has imposed sanctions in a wide range of areas. This includes for misleading the regulator, breaches of the “financial services prohibition” (ie, carrying on a financial service without the proper authorisation), breaches of the “financial promotions prohibition” (ie, marking financial services and products in breach of the relevant DFSA rules), market abuse (eg, insider dealing, price manipulation), AML deficiencies (eg, insufficient client due diligence, poor systems and controls), and a range of technical breaches such as inadequate client suitability assessment, client classification or handling of client money and regulatory capital inadequacy.

    The DFSA has in recent years carried on high profile enforcement action which resulted in the imposition of substantial fines on its regulated firms. In 2014, the DFSA fined Deutsche Bank US $10.5 million for misleading the DFSA during the course of its investigation and for various conduct of business failures. In July 2019, following high-profile investigations, the DFSA imposed its highest ever fines of US$299 million and $15.3 million against two Abraaj Group entities for serious wrongdoing in connection with the company's private equity business including carrying out financial activities in the DIFC without the proper authorisation, and for misusing investors’ money.

  5. 3.If there is more than one authority involved in a securities or related investigation, how is jurisdiction allocated? What is the interplay between the securities regulator and the public prosecutor?
  6. The jurisdictional boundaries of the UAE Securities Regulators are described in part 1 above. Each of the three UAE Securities Regulators have defined jurisdictions, with very little, if any, overlap. The UAE Securities regulators have entered into information sharing and cooperation agreements with each other to assist in the carrying on of securities investigations where the assistance of another regulator is necessary. For example, the DFSA may request the SCA’s assistance when it wishes to carry on on-site investigations of an SCA-regulated broker which trades on a DIFC exchange.

    As noted above, the UAE Securities Regulators do not have criminal jurisdiction (ie, the authority to prosecute crimes). In practice, if a UAE Regulator suspects a breach of a criminal law, they will refer the matter to the Police. The Police will consider the request and refer it to the Public Prosecution if it considers the complaint should be accepted. In our experience, the police may take many weeks to review referrals from regulators or complainants, and may ask for an expert report before accepting a matter.

    Regulatory enforcement actions which involve some element of a financial crime or fraud, such as corporate fraud, cyber fraud, ML, terrorist financing or TF, will often be jointly investigated by the Police, and prosecuted by, the Public Prosecution.

  7. 4.Do the securities or related law enforcement authorities have investigatory powers? Can they bring administrative, civil or criminal proceedings? 
  8. Investigatory powers

    As noted above, the UAE Securities Regulators do not have criminal jurisdiction. However, the UAE Securities Regulators have extensive investigative powers, with the possibility to request assistance from, and assist, other regulators in their investigations.

    In Onshore UAE, the SCA is granted under the SCA Law "the supervisory and executive powers necessary to perform its functions investigative powers"[1]. The SCA may also compel any person to disclose information which is related to securities transactions and may carry on "any investigation it deems necessary" to enforce the SCA Law and regulations[2]. The SCA may be guided by the Civil Procedures Code[3], the Law of Evidence[4], and other laws and general rules applicable in the UAE in carrying on its investigation.

    In the FFZs, the regulators both have very broad (and almost identical) investigative powers and may require a licensed firm to:

    • give or procure the giving of specified information, documents, files, tapes, computer data or other material in the firm's possession or control;
    • make its employees readily available for meetings with the regulator;
    • give the regulator access to any information, documents, records, files, tapes, computer data or systems, which are within the firm's possession or control and provide any facilities to the regulator;
    • permit the regulator to copy documents or other material on the premises of the firm (at the firm's expense);
    • provide any copies as requested by the regulator; and
    • answer truthfully, fully and promptly, all questions which are put to it by the regulator.

    The FFZs regulators treat all non-public information received in the course of carrying on their functions as confidential.

    The UAE Securities Regulators proceedings are civil and administrative. The DFSA and the FSRA are able to request police assistance in the handling of their enforcement actions, particularly where the subject of the investigation is located outside the FFZ. The UAE police have wide investigative powers, including the power to question witnesses, collect evidence, and gain access to confidential information and records, including phone records.

    Administrative proceedings

    In Onshore UAE, the SCA can impose a number of administrative penalties such as:

    • imposing a warning;
    • imposing a fine of no more than the maximum limit provided for in the relevant law or regulation;
    • suspending a licence or authorisation;
    • withdrawing a licence; and/or
    • compelling a person to remedy the breach within a specified time.

    In the FFZs, the regulators can impose administrative penalties, which include:

    • issuing a public censure;
    • imposing a fine. We note that there are no limits on the fines which the DFSA may impose. The FSRA has some limits on the quantum of its fines;
    • imposing a temporary ban on a person carrying on financial services activities or holding certain functions; and/or
    • restricting a person from carrying certain activities or requiring a person to adopt a certain course of action.

    Civil and criminal proceedings

    The UAE Securities Regulators can bring or participate in civil proceedings. The DFSA, for example, has powers to bring civil proceedings and to intervene in any proceedings in the DIFC courts where it considers such intervention appropriate to meet the objectives of the DFSA.


    [1] See article 2 of the SCA Law.

    [2] See article 33 of the SCA Law.

    [3] Federal Law No. 11 of 1992.

    [4] Federal Law No. 10 of 1992.

  9. 5.Are regulatory or criminal securities and related investigations public? Under what circumstances? 
  10. The investigations of the UAE Securities Regulators are confidential. However, each of the UAE Securities Regulators has a power to disclose the fact of its investigation and to comment on the status of an investigation. In practice, most securities investigations are kept confidential until the relevant regulator decides to take action. Both the DFSA and the FSRA have a right to impose confidentiality orders on the subjects of their investigations.

    In the FFZs, the regulators are required to treat all non-public information received in the course of carrying on their functions as confidential. The FFZs regulators will generally publish, in such form and manner as they regard appropriate, information and statements relating to enforcement actions, including censures and any other matters, which the regulator considers relevant to the conduct. The publication of enforcement outcomes is consistent with the FFZs regulators' commitment to open and transparent processes and their objectives. This usually happens after the enforcement process is complete (ie, the DFSA’s decision has become final and not subject to an appeal). The regulator may, however, decide to publish at an earlier stage than suggested by the general policy, where circumstances justify this. The DFSA publishes the decision notices for each of its regulatory actions, along with a press release. This is in part to deter others from committing offences and to promote public awareness.

    The SCA may publish a summary of the outcome of its regulatory action against firms and individuals, which includes names, the regulations breached, as well as the imposed penalty.

    The UAE Penal Procedure Code[1] provides that criminal investigations, and any information related to an investigation, are private. The disclosure of such information carries a sanction. The party which makes a criminal complaint, or is the subject of such a complaint, can make enquiries with the Police and Public Prosecution as to the status of its investigations. However, the Police and Public Prosecution have discretion over whether to provide such information. This applies equally to legal advisers or individuals authorised to represent these parties by virtue of a power of attorney.



    [1] Federal Law No.35 of 1992.

  11. 6.Are regulatory or criminal securities and related investigations targeted at the company or the individuals involved, or both?
  12. All securities and related regulatory investigations conducted by any of the UAE Securities Regulators, or the associated criminal Police and Public Prosecution investigations, can target companies and individuals alike, depending on the facts of the matter, the breached legislation and the role played in the misconduct.

    In the FFZs, the DFSA can either target persons who committed a misconduct, as well as those who are “knowingly concerned” (ie, involved) in another person’s misconduct. The current trend is for the DFSA to go after both the company and the relevant members of its senior management or those holding certain authorised functions (eg, compliance officer, senior executive officer, finance officer, and money laundering reporting officer), since it is common for these individuals’ conduct to be the cause of the company’s breach of the DFSA regulations.

    Finally, while a criminal court can target individuals and companies alike, companies may only be subject to fines, while individuals can also receive a prison sentence. In practice, it is common for criminal sanctions to be imposed on individuals who, inevitably, will be the focus of the investigations. In circumstances where a company is the target, the Public Prosecution often holds the general manager accountable for the actions of the company.

    Investigation procedure

  13. 7.How do the securities and related law enforcement authorities typically begin an investigation?
  14. In Onshore UAE, the SCA typically commences its investigation following a routine inspection or, more frequently, following a third party’s complaint (usually a disgruntled investor or employee). At the outset, the SCA must define the scope of the investigation, and designate an individual to conduct it on its behalf.

    When initiating an investigation following a complaint, the SCA normally requires the person making the complaint to submit a written statement as to the circumstances and factors relating to the activity which is the subject-matter of the information or complaint.

    In the FFZs, the regulators may commence an investigation where it considers it “appropriate and expedient”, if it has reason to suspect that a contravention of its regulations or any law it administers, or if it receives a request made by another government body or authority (local or foreign). In practice, the DFSA usually commences its investigations when:

    • it uncovers suspicious activity or any cause for concern during a random inspection;
    • it receives a communication from a whistleblower or a third party’s complaint to the DFSA (eg, an investor, a market operator); or
    • the DFSA’s Enforcement Division (Enforcement) receives an internal referral from the DFSA’s Supervision Division (Supervision).

    Financial institutions and certain designated non-financial businesses and professions, both in Onshore UAE and the FFZs, are required to submit a Suspicious Activity Report (an SAR) to the Central Bank whenever they suspect ML activity. Firms regulated by the FFZ regulators are further required to notify their regulator of such a filing. The submission of an SAR may trigger an investigation by the FFZ regulators.

    The Police have discretion to commence an investigation, or may do so following a complaint. The complainant can be an individual or a corporation. Upon being presented with a criminal complaint, the Police will contact the complainant and the accused to provide them with an opportunity to present their respective version of events. The police may also initiate investigations at the request of the UAE Securities Regulators.

  15. 8.What level of suspicion of wrongdoing is required for the securities or related law enforcement authorities to begin an investigation?
  16. The ESCA does not specify a level of suspicion of wrongdoing to commence an investigation or bring a claim against an ESCA-regulated entity.

    The UAE courts do not typically adhere to the common law concept of a "burden of proof", and therefore the level of suspicion required is dealt with on a case by case basis, and can be influenced by public policy considerations. Ultimately, the final decision is at the discretion of the judge hearing the criminal or civil case in the UAE courts.

    The DFSA must usually have “reasonable grounds” to suspect a contravention of the DIFC Regulatory Law, or the related legislation, to initiate an investigation, but there is little guidance beyond this and the DFSA retains wide discretion to initiate investigations.

  17. 9.May the securities or related law enforcement authorities conduct dawn raids? Does this depend on the nature and seriousness of the allegations?
  18. The inspection team appointed by the ESCA may enter the ESCA-regulated entities’ offices during working hours, inspect records and documents, and require that the team is provided with any document or information the team deems necessary to perform their task.

    The DFSA may enter business premises during the course of an investigation for the purpose of inspecting and copying information or documents. This power may be exercised when the DFSA considers that the person occupying the premises may be able to give information or produce a document that may be relevant to an investigation. The company will typically be provided with prior notice of any such investigations. If the DFSA wishes to conduct a dawn raid (and cooperation is refused), it may seek the assistance of the Police and the written authorisation of the Public Prosecution, following a search warrant being issued by the DIFC Court.

    In addition, the police in the UAE could undertake a "dawn raid" or an unannounced visit without a warrant if the investigation relates to a crime that is being committed at the time of, or immediately after, the dawn raid, and the officials may inspect the premises without written authorisation. This would usually be when the Police suspect that the suspect is hiding in the premises.

    In all other cases, written authorisation from the Public Prosecution is essential.

    Similarly, other international investigating authorities will not be able to conduct an investigation or carry out a dawn raid without the written authorisation of the Public Prosecution. They cannot attend without local enforcement officers (that is, the police). 

    The conduct of dawn raids does depend on the nature and seriousness of the allegations. It should be noted however that dawn raids are rare.

  19. 10.

    Must the findings of a company's internal review be reported to the securities or related law enforcement authorities? When and under what circumstances?

  20. There may be circumstances when a company must disclose the findings of an internal review. However, there is no general requirement to automatically disclose all internal review findings. Mandatory disclosure is required if the review findings identify breaches of laws or regulations, and in other specified circumstances.

    In Onshore UAE, the requirement to notify the SCA of breaches of the law or the SCA regulations is contained in the various regulations in relation to the relevant SCA-regulated entities (eg, the requirement for a broker to notify the SCA and under article 15(4)(f) of the SCA’s brokers regulations[1]).

    In the FFZs, under the Regulatory Law, licensed firms are required to disclose to the DFSA:

    anything that reasonably tends to show […] a breach, or likely breach of a provision of the Law or Rules or other legislation administered by the DFSA […] a failure, or likely failure, to comply with any obligation to which a person is subject under such legislation; or […] any other matter as the DFSA may prescribe in Rules that may be attributable to the conduct of [a DFSA-licensed firm] or its directors, officers, employees or agents[2].

    Furthermore, a DFSA-licensed firm is required under the General Module of the DFSA Rulebook (GEN) to notify the DFSA “immediately if it becomes aware, or has reasonable grounds to believe, that any of the following matters may have occurred or may be about to occur:

    (a) the authorised person’s failure to satisfy the fit and proper requirements;

    (b) any matter that could have a significant adverse effect on the authorised person’s reputation;

    (c) any matter in relation to the authorised person that could result in serious adverse financial consequences to the financial system or to other firms;

    (d) a significant breach of a Rule by the authorised person or any of its employees;

    (e) a breach by the authorised person or any of its employees of any requirement imposed by any applicable law by the authorised person or any of its employees;

    […]

    (g) any significant failure in the authorised person's systems or controls, including a failure reported to the authorised person by the firm's auditor;

    (h) any action that would result in a material change in the capital adequacy or solvency of the authorised firm; or

    (i) non-compliance with Rules due to an emergency outside the authorised person's control and the steps being taken by the authorised person"[3].

    A DFSA-licensed firm is also required under DFSA rules to establish and maintain:

    1. effective systems and controls to report suspected fraud and other financial crimes to the relevant authorities[4]; and
    2. monitoring and reporting processes and procedures to ensure that any compliance breaches are readily identified, reported and promptly acted upon[5].

    Furthermore, under the DFSA's Principles for Authorised Firms (ie, DFSA-licensed firms), an authorised firm is subject to the general requirement to "deal with Regulators in an open and cooperative manner and keep the DFSA promptly informed of significant events or anything else relating to the authorised firm of which the DFSA would reasonably expect to be notified"[6]. The FSRA has materially identical rules regarding disclosure.

    Finally, the failure to report activity which amounts to ML or TF is a crime under the AML Law and TF Law. Further, the Penal Procedure Code places an obligation on anyone “with knowledge of the perpetration of a crime that the public prosecution can prosecute” to report such a crime to the Police or Public Prosecution and failing to do so can incur sanctions of imprisonment and/or a fine. This requirement is especially relevant for SCA-licensed entities since under the SCA Law, certain regulatory breaches also have a criminal aspect.



    [1] SCA Board Decision No. 27 of 2014 on Brokerage in Securities.

    [2] See article 67 of the Regulatory Law.

    [3] See GEN Rule 11.10.7.

    [4] See GEN Rule 5.3.28.

    [5] See GEN Rule 5.3.11.

    [6] See GEN Rule 4.2.10.

  21. 11.Are whistleblowers a frequent source of information for securities and related investigations? 
  22. In Onshore UAE, SCA provides that an SCA-regulated entity should have a whistleblowing policy that includes the mechanism and basis to protect the whistleblower and to ensure that he or she is not harmed, as well as the policies that should be followed to handle the reported violation in terms of maintaining the confidentiality of the whistleblower’s name, and the entity in charge of following up and addressing the violation.

    The DIFC introduced a general whistle-protection under the DIFC Operating Law,[1] which only provides protection in relation to non-financial regulatory matters (ie, matters which fall within the remit of the DIFC Registrar or Companies). However, under the Regulatory Law a person may not be found liable when providing information to the DFSA in good faith and with the reasonable belief that the provided information is relevant to any functions of the DFSA[2].

    However, there is no general whistleblower protection regime on a Federal level in Onshore UAE. The Emirate of Dubai enacted in 2016 its Financial Crimes Law[3], which introduced “protection for the reporter” under article 19 of law for disclosures made to the newly established Dubai Centre for Economic Security. The law stipulates that the reporter's freedom, security and protection shall be guaranteed, and that no legal or disciplinary action may be taken against the reporter unless the report he makes is false.

    Despite this development and the general obligation to report criminal activity, as set out at article 274 of the Penal Code, in practice, whistleblowing is rare because the whistle-blower may face criminal or civil claims from those he accuses.

    The DFSA and the SCA do not disclose the extent to which their respective regulatory investigations are triggered by whistleblowers. Therefore, it is not possible to determine whether whistleblowers are a frequent source of information for investigations. In our experience, on account of the limited Onshore UAE statutory protection for whistleblowers, it is not common. However, it is more common in the DIFC, where certain regulated individuals have a duty to disclose information to the DFSA.



    [1] DIFC Law No.7 of 2018.

    [2] See article 68 of the Regulatory Law.

    [3] Dubai Law No. 4 of 2016 regarding Financial Crimes.

  23. 12.Describe the typical phases of a securities or related investigation in your country.
  24. The investigation process in Onshore UAE is less structured that in the FFZs. The first phase of an investigation in Onshore UAE would be when the SCA is made aware of a potential breach (whether through its own officers, via a whistleblower, or any third party such as a disgruntled employee). The SCA would assess the breach and decide whether to commence its investigation. Once the investigation is commenced, the SCA would appoint a lead investigator. The investigator will submit its findings to the SCA who will then decide whether to impose an administrative sanction and/or report the matter to the Police or Public Prosecution for further civil or criminal action. Once the SCA issues its decision, the defendant has 30 days to appeal that decision with the SCA, whose appeal decision is final.

    In the FFZs, the process we set out below is based on the DFSA process. However, the process is largely same for the FSRA. An investigation by the regulator will usually also start with a complaint or a breach detected by the DFSA supervision team, which is referred internally to the DFSA enforcement team (Enforcement). Enforcement would hold an initial scoping meeting to determine the scope of the breach and the merits of investigating the case. If Enforcement determines that it has reason to suspect that a contravention is being or may have been committed, it may decide to commence an investigation. The suspect is generally not made aware of the commencement of an investigation. However, the suspect would generally be on notice as soon as he receives his first notice requiring him to provide information (including providing documents, access to premises, or an interview). At the conclusion of the investigation phase, the decision-making phase begins where the DFSA may either take no further action, or decide to take enforcement action. Throughout this process, Enforcement may be in touch with the suspect who can address the Enforcement’s allegations directly. If it decides to take action, Enforcement would provide the DFSA’s Decision Making Committee (the DMC) with its investigations report, a draft of a proposed decision notice that sets out the proposed sanctions and the reasons for imposing them, and any material relied upon for reaching its conclusions. The DMC would look into all the presented material and may request further information from Enforcement in order to reach its decision. The DMC would provide a copy of all of the relevant materials to the suspect who would then have the right to make written and oral representations to the DMC. Following the suspect's representation, the DMC may either refrain from taking action, take the action recommended by Enforcement and its draft decision notice as is, or take its such other action as it considers appropriate on its own initiative. The DMC's decision is subject to review by the Financial Market Tribunal (the FMT). The DFSA will almost always publish its decision (along with a press release) after it becomes final (ie, if no referral to the FMT is made during the specified period or if the FMT maintains or amends the DFSA's decision). We note that at the time of drafting this note, a person may offer to settle an enforcement matter at any time during the investigation and decision-making phases.

    Throughout any of the UAE Securities Regulators' investigation processes, the Public Prosecution may direct its own investigation into any related matters which fall within its jurisdiction (criminal matters), usually by requesting interviews with the person that is the subject of the complaint, and also the complainant. The Public Prosecution has discretion to apply travel bans or arrest warrants. Once the Public Prosecution has completed the investigation, they will then initiate criminal proceedings in the court.

  25. 13.What are the mechanisms by which a securities or related law enforcement authority may cooperate and coordinate with authorities outside your jurisdiction?
  26. In Onshore UAE, there are no specified mechanisms under the SCA Law and regulations in relation to international cooperation. The SCA also does not publish any information in that regard. Nevertheless, international investigating authorities may obtain written consent from the Public Prosecution to conduct an investigation or carry out a dawn raid in the UAE in the presence of the Police. Requests must come through diplomatic channels and via the UAE Ministry of Justice, and such judicial cooperation is usually governed by MoUs or bilateral and multilateral treaties, as further set out below.

    There is a general duty under the AML Law to cooperate with foreign enforcement authorities and to provide judicial assistance (provided there are reciprocal arrangements in place) in relation to crimes of ML, TF and the financing of illegal organisations. The UAE authorities are expected to prioritise such requests and ensure that they are dealt with promptly.

    In the FFZs, the regulators are signatories to the IOSCO Multilateral MOU,[1] and provide assistance to regulatory authorities in other jurisdictions (including the SCA). Under the Regulatory Law, the DFSA may also, where it considers appropriate, exercise its powers under the Regulatory Law or under any other legislation administered by the DFSA for the purpose of assisting a foreign authority.[2] We note that the DFSA has signed over 100 MoUs with other regulators to facilitate international cooperation in regulatory matters (eg, exchange of information, service of notices).

    The securities and related law enforcement authorities in the UAE have various bilateral and multilateral MoUs with overseas authorities to facilitate cooperation and the sharing of information. The SCA is a signatory to the IOSCO Multilateral MOU. The UAE is also a party to a number of treaties for the provision of mutual legal assistance in civil and criminal matters. Depending on the wording of the respective treaties, this would capture investigations. The level of coordination depends on the provisions of the relevant treaty, and ultimately the approach taken, as well as discretion exercised by the Public Prosecution.



    [1] IOSCO is the International Organisation of Securities Commissions. Its Multilateral Memorandum of Understanding Concerning Consultation and Cooperation and the Exchange of Information (MMoU) is plays an important part in international cooperation between securities regulators. See link.

    [2] See article 39 of the Regulatory Law.

  27. 14.Will a securities or related law enforcement authority take into account findings by a law enforcement authority outside your jurisdiction in the course of its investigation?
  28. There are no published records in which the SCA has taken into account findings by a law enforcement authority outside the UAE. However, it is likely that the SCA would take into account findings by a law enforcement authority outside the UAE to commence an investigation, where there is a nexus to its jurisdiction in the UAE.

    The DFSA has discretion to take into account findings made outside the jurisdiction, and may instigate its own investigations as a result. The DFSA has recently investigated two Abraaj group entities and related persons, and imposed its highest fine to date against them. The investigation involved findings that were made in other jurisdictions regarding the conduct of Abraaj group entities.

    While the Public Prosecution is not bound by the decisions or findings of authorities outside the UAE, and has ultimate discretion in that regard, it may nonetheless take such findings into account during the course of its investigation.

    Document production

  29. 15.What can the securities and related law enforcement authorities require to be produced as part of an investigation? Do the powers of a regulator differ from those of the public prosecutor?
  30. In Onshore UAE, the SCA may require that it be provided with any document or information it deems necessary to perform their task and the SCA-regulated entity may have to provide the SCA with such reports and data as the SCA requests and shall issue such press releases as are necessary to ensure transparency of information and transparent disclosure. In practice, we are not aware of press releases from SCA being used in the context of disclosure requests.

    In the FFZs, the regulators may require the production of any documents and information it deems necessary to carry on its investigation (this includes any form of electronic communications, from email to messages and audio-visual recordings, to the imaging of entire computer systems and networks). The person receiving a production notice from the regulator is required to comply, unless he has a reasonable excuse not to do so. Where a person refuses to comply with a production notice, the regulator may petition the respective FFZ court to issue an injunction requiring compliance. The DFSA used this power in the high-profile Deutsche Bank case.

    The Public Prosecution's powers of investigation, being a UAE federal authority, are the widest and largely unfettered. Individuals and entities are required to comply with the Public Prosecution document-production requests which are enforced directly by the Police.

  31. 16.Will a litigation hold or will other instruction to preserve documentation need to be issued? When?
  32. While it is always good practice to issue a litigation hold at the outset of an investigation, there is no formal requirement under Onshore UAE or FFZ laws to issue a litigation hold during a regulatory investigation.

    In Onshore UAE, while not strictly a litigation hold for the preservation of documentation, the SCA may, while it is conducting an investigation or inspection, order the party under investigation not to dispose the securities in their possession and to refrain from withdrawing any funds or securities deposited with another party.

    In the DIFC, the destruction of documents with the intent of obstructing the DFSA in the exercise of its powers, without reasonable excuse, is a serious misconduct under the Regulatory Law.[1] The DFSA’s record keeping requirement covers a broad range of documents and information, and is for a period of no less than six years from the date on which the business relationship with a client has ended. Disposing of or destroying such records is a regulatory breach. The DFSA may retain possession of any information and documents given to it pursuant to a requirement made under the Regulatory Law for so long as is necessary: (i) for the purposes of an investigation; (ii) for a decision to be made about whether or not a proceeding to which the information or documents would be relevant should be commenced; or (iii) for such a proceeding to be completed[2].

    There are no specific provisions under UAE criminal law regarding the preservation of documentation. However, the Public Prosecution may seize documents for the purposes of its investigation and may hold them thereafter.



    [1] See article 83 of the Regulatory Law.

    [2] See article 80(A)(3) of the Regulatory Law.

  33. 17.Can the securities and related law enforcement authorities request the production of materials protected by attorney-client privilege or work-product doctrine? Can the securities and related law enforcement authorities use protected materials if it obtains them from third parties?
  34. In Onshore UAE, there is no concept of legal advice privilege, legal privilege or work-product doctrine in Onshore UAE. However, the UAE Advocacy Law recognises the confidentiality of communications between a lawyer and client, both in an advisory and contentious context. There are limited circumstances when a lawyer may disclose or be compelled to disclose confidential client information (including by court order or client consent). The difficulty under UAE law arises in relation to two situations:

    • where a law enforcement body or other government authority such as the SCA requires the client to disclose communications which would be privileged if held by the law firm – in our view the client is likely to be compelled to provide the communications, thereby undermining the value of the confidentiality. In other words, privilege cannot act as a shield to prevent disclosure to the local regulators as it might elsewhere. However, more often than not in regulatory enforcement actions, privileged information is disclosed to the regulator when compelled on the assumption that (i) it is not a waiver of privilege; and (ii) that the regulator agrees not to harm the privilege; and
    • the Advocacy Law does not apply to in-house lawyers so it is unlikely to apply to communications between the in-house lawyer and the internal "client". In-house lawyers are generally treated as employees in the UAE, but do themselves have a duty of confidentiality to their employer.

    While there is no privilege under Onshore UAE law in a strict sense, equally there is no general obligation of discovery or to make disclosure of documents during UAE civil court proceedings or regulatory enforcement action, in the same way that there might be in common law jurisdictions. This should act to mitigate risk vis-a-vis any future UAE litigation.

    Under article 15 of the AML Law and article 17(2) of the AML Resolution on the implementation of the AML Law [1], lawyers, notaries, other legal professionals and independent legal auditors are exempted from the obligation to disclose suspicious activity to the Financial Intelligence Unit of the UAE Central Bank if information has been obtained that is subject to professional confidentiality (which we understand to be analogous to attorney-client privilege).

    In the DIFC, a person subject to a DFSA request for information or a compulsory interview may not rely on legal privilege as a reason to refuse to comply with the request or answer a question in an interview. Therefore, vis a vis the DFSA, privilege is not a shield to prevent disclosure. To date, this DFSA power has not been challenged in the DIFC courts. The ADGM does not have a similar provision under its legal system. Therefore, a person subject to FSRA enforcement action may rely on legal privilege to refuse to provide information to the FSRA or to refuse to answer a question during a compulsory interview.

    Regarding whether a UAE Securities Authority which obtains protected materials from a third party may use such material:

    • In the DIFC, the DFSA may use such material, but is unlikely to rely on it in any subsequent findings as it would not wish to undermine the relevant person’s legal privilege. However, it would use such information to carry out its own enquiries, which may include asking the subject of an investigation for the underlying information;
    • In the ADGM, although untested to date, it is unlikely that the FSRA would use the protected material in light of the fact that it recognises and seeks not to undermine a person's right to legal privilege; and
    • In Onshore UAE, given that the law does not recognise legal privilege, there is nothing that would prevent SCA from using the protected material.


    [1] Cabinet Resolution No.10 of 2019.

  35. 18.How is confidential information or commercially sensitive information treated by the securities and related law enforcement authorities?
  36. All non-public information received by the UAE Securities Regulators, whether during the course of an investigation or otherwise, is deemed confidential. In Onshore UAE and the FFZs, the concept of confidential information would include commercially sensitive information.

    In the FFZs, the regulators may disclose confidential information under certain circumstances including where such disclosure is permitted or required under the law or regulations or under other legislation administered by the regulator, or if it is made to certain authorities including

    • another financial services regulator or a governmental or regulatory authority exercising powers and performing functions relating to AML, counter-terrorist financing (CTF) or sanctions compliance;
    • a civil or criminal law enforcement agency;
    • for the purpose of assisting the performance by any of the persons in (i) and (ii) with their regulatory functions; or
    • is made in good faith for the purposes of performance and exercise of the functions and powers of the regulator.

    The regulators in the FFZs do not disclose a statement made by a person in answer to any question asked pursuant to a requirement made by the relevant regulator to any law enforcement agency for the purpose of criminal proceedings against the person unless: (i) the person consents to the disclosure; or (ii) the regulator is required by law or court order to disclose the statement[1].



    [1] See article 80A(2) of the Regulatory Law.

  37. 19.Can the target of a document request exercise a right not to produce?
  38. Where a UAE Regulator makes a requirement to produce a document or information, such person must, unless he has a reasonable excuse, comply with such requirement. In practice, the only valid reason for not producing the requested information is limited to legal privilege (which we set out in question 17).

    Under the Regulatory Law in the DIFC (and the same is true in the ADGM), it is not a reasonable excuse for a person to refuse or fail to: (i) permit inspection and copying of any information or document; (ii) give or produce, or procure the giving or production of, any information or document; or (iii) answer questions because it: (i) might tend to incriminate the person or make the person liable to a penalty; (ii) is, or contains, or might reveal a Privileged Communication; or (iii) is, or contains, or might reveal a communication made in confidence [1].

    Where the DFSA requires a lawyer to produce information which would involve disclosing a Privileged Communication made by, on behalf of, or to, the lawyer in his capacity as a lawyer, the lawyer is entitled to refuse to comply with the requirement unless: (i) where the person to whom the communication was made consents to the lawyer complying with the requirement; or (ii) otherwise, the person to whom, the communication was made consents to the lawyer complying with the requirement[2].

    In the Deutsche Bank case, facing the bank’s reticence to comply with its notice to produce documents and information for fear of breaching Swiss banking secrecy laws, the DFSA petitioned the DIFC Court to issue an injunction forcing the bank to provide the requested information. The DIFC Court found the duty to produce overrides Swiss banking secrecy laws.



    [1] See article 81(1) of the Regulatory Law.

    [2] See article 81(2) of the Regulatory Law.

  39. 20.

    Do any data privacy, bank secrecy or other laws restrict the production of materials to a securities or related law enforcement authority in your jurisdiction? An authority outside your jurisdiction? May the company under investigation provide personal or bank customer data on a voluntary basis?

  40. In Onshore UAE, there is no general federal data protection law (although this may soon change) and there is also no single national data protection regulator. Nevertheless, there is a general right to privacy for citizens under the UAE Constitution. Under the Penal Code, such right to privacy can be waived by the person, or could be overridden if a UAE official or public authority has requested for such information or such disclosure serves the public interests or national security.

    It may be possible to restrict foreign authorities’ requests for information on the basis on breaches of privacy (enshrined under the UAE Constitution). Such requests would need to come through formal (diplomatic) channels and would be subject to the discretion of the UAE law enforcement authorities.

    In the FFZs, there is a data protection regime based on European Directive 95/46/EC established by the Data Protection Law[1] in the DIFC (soon to be replaced by a newer law based on the EU General Data Protection Regulation and the California Consumer Privacy Act) and the Data Protection Regulations[2] in the ADGM (both quasi-identical). These data protection legislation sets out the requirements for the legitimate processing of personal data and the rights of data subjects.

    Under the Data Protection Law and Data Protection Regulations, the main provisions which would restrict the regulator's access to personal data are disapplied if they are likely to impede the regulator's discharge of its duties that aim to protect the public from financial loss due to dishonesty, malpractice or other misconduct in the provision of banking, insurance, investment or other banking and financial activities and services, including insurance and reinsurance services, financial markets and financial and monetary brokerage services.

    The DIFC has a bank secrecy law.[3] However, it is not clear whether the fact that materials are subject to banking secrecy would protect such materials from disclosure to the DFSA. A foreign regulator may request the DFSA to exercise its statutory powers to assist the foreign regulator with its investigation.



    [1] DIFC Law No.1 of 2007.

    [2] AGDM Data Protection Regulations 2015.

    [3] DIFC Law of Obligations 2005 article 155.

  41. 21.Are there any data privacy, bank secrecy or other laws that restrict where documents or other communications may be stored or reviewed for the investigation?
  42. In Onshore UAE, no restrictions on the storage of any data exist under the SCA laws and regulations (although this may change soon).

    In the DIFC, the DFSA requires licensed entities to:

    • take reasonable steps to ascertain if there is any secrecy or data protection legislation that would restrict its access or access of the DFSA to any data required to be recorded under the DFSA’s rules. Where such legislation exists, the Authorised Person must keep copies of relevant documents or material in a jurisdiction that does allow access in accordance with legislation applicable in the DIFC[1]; and
    • make and retain records of matters and dealings that are the subject of requirements and standards under the legislation applicable in the DIFC in a way that is capable of reproduction on paper within a reasonable period not exceeding three business days.

    The ADGM has similar rules.



    [1] See GEN Rule 11.1.4, and Rule 8.3.4 of the FSRA General Rulebook.

  43. 22.Are the securities and related law enforcement authorities able to obtain documents from outside the country?
  44. There are no obstacles under UAE law to the UAE Securities Regulators requesting documents from outside the country.

    However, the enforceability of such requests in those foreign countries will depend on the laws and procedures applicable in the relevant foreign country. As noted above, the FFZ regulators have MOUs with many foreign securities regulators that may be used to obtain documents and information located abroad.

    Witness interviews

  45. 23.Will the securities and related law enforcement authorities conduct witness interviews? If so, will the interviews be on the record? Will the interviews be made public?
  46. In Onshore UAE, the SCA can require any person to submit a written statement as to the activity which is the subject-matter of the information or complaint. It will likely be on the record but not made public.

    In the FFZs, regulators have the power to conduct voluntary or compulsory interviews (in any capacity, as witness or otherwise). In the event of a compulsory interview, the interviewee must attend the interview and respond to the questions, unless he has a reasonable excuse for not doing so. Self-incrimination is not a reasonable excuse.

    Compulsory interviews are recorded, and this is clearly disclosed to the interviewee at the start of the interview. The DFSA will, upon a written request from the interviewee, provide him with a copy of the recording or a transcript of the interview. While the interview recordings or transcripts are not made public, details or excerpts of an interview may be referred to in the DFSA’s final decision notice, which is usually made public. When conducting a compulsory interview, the DFSA may give a direction:

    • concerning who may be present;
    • preventing any person present during any part of the compulsory interview from disclosing to any other person any information provided to the interviewee or questions asked by the interviewer during the compulsory interview;
    • concerning the conduct of any person present, including as to the manner in which they will participate in the interview;
    • requiring the interviewee to swear an oath or give an affirmation that the answers of the interviewee will be true; and
    • requiring the interviewee to answer any questions relevant to the investigation.

    The DFSA usually includes a confidentiality direction in its notices that requires the recipient to keep the request for information or compulsory interview, confidential. When interviewing a non-regulated person who is outside the DIFC, the DFSA can either rely on any arrangements it has with the other regulators in their respective jurisdictions where the person is located or domiciled, or apply for a DIFC Court order compelling the person to attend the interview and respond to the DFSA's questions.

    The UAE Police and the Public Prosecution have powers to interview witnesses during the course of their investigations. These interviews will be conducted in Arabic (with a translator present as necessary). These must be documented in (Arabic-language) reports signed by the questioning officer and the witness. It will likely be on the record but not made public.

  47. 24.Can witnesses exercise a right not to testify? Will any adverse inference be drawn if they do so?
  48. In Onshore UAE, if the summoned person fails to appear on time, the SCA shall consider the complaint using the available documents and data. Where the Public Prosecution involved, if a person refuses to testify without an excuse, the Public Prosecution may issue an arrest warrant for person. That person may also be subject to a travel ban, or his or her passport being confiscated.

    In the FFZs, a person may refuse to testify only if he has a reasonable excuse[1]. Self-incrimination, or the disclosure of privileged or confidential communication, is not a reasonable excuse for not complying with the regulator's request for a compulsory interview. On the other hand, while nothing prevents the regulator from drawing inferences from a person's refusal to attend a voluntary interview, this is not something provided for under the FFZs regulations.



    [1] See article 69 of the Regulatory Law.

  49. 25.Do witnesses receive separate counsel? Who provides counsel for witnesses?
  50. In Onshore UAE, the SCA rules and regulations do not require witnesses to receive separate counsel. Witnesses may be represented by counsel, but this would need to be self-funded.

    In the FFZs, a person has a right to legal representation. An interviewee would normally have his lawyer present during the course of a compulsory or voluntary interview since he would be entitled, under the law[1], to legal representation during the course of the investigation. The lawyer is permitted to address any issues with the interviewer or interviewee during the interview.

    In criminal complaints and cases, it is at the witness’s discretion as to whether it wishes to engage a lawyer, but that lawyer will not be permitted to speak on behalf of his client (even if he is present) unless the lawyer has a power of attorney.



    [1] See article 78(2) of the Regulatory Law.

    Advocacy

  51. 26.Can the target of a securities or related investigation challenge the investigation in court while the investigation is ongoing?
  52. In Onshore UAE, there is no specific right to challenge an SCA investigation in court while it is ongoing, but depending on the circumstances, it may be possible to challenge the SCA's conduct of the investigation (eg, abuse of power). If the challenge is in relation to the substance of the SCA’s investigation before its findings are finalised, it is likely that the courts will stay such action until the investigation by the SCA is concluded. There are no judicial review type remedies.

    It is worth noting that criminal proceedings operate to automatically stay civil proceedings on the same subject matter pending judgment in the criminal proceedings.

    In the FFZs, the target could, in theory, challenge the DFSA’s conduct in the investigation in front of the DIFC Court or the FMT while the investigation by the DFSA is still ongoing (eg, in the event it is considered that the DFSA is exceeding its powers or is acting in bad faith – the person may also complain to the DFSA about the conduct of its officers). If the challenge is in relation to the DFSA's findings, a referral to the FMT would be possible once the DFSA issues its final decision.

    A person may bring judicial review proceedings in the DIFC or ADGM courts during the course of an investigation.

  53. 27.What opportunity will there be to respond to a securities or related law enforcement authority’s theories or allegations prior to the authority bringing charges?
  54. In Onshore UAE, an SCA-regulated entity will likely be able to respond to the SCA once the SCA commences investigation and once the SCA-regulated entity submits its statement. However, there is no prescribed law granting the SCA-regulated entity such opportunity, whether during or after the SCA concludes its investigation.

    In respect of criminal complaints and cases, please see responses to questions 2, 3 and 7. There are two main opportunities for an individual accused of a criminal action to respond to the complaint:

    1. upon filing a criminal complaint, the Police will contact the accused and request his or her presence at the local police station for questioning; and
    2. if the matter is referred to the Public Prosecution, an accused will similarly be questioned by the Public Prosecution, and his or her statements documented.

    In the FFZs, the person suspected of misconduct can engage with Enforcement at any stage of the investigation until the submission by Enforcement of its final investigation report to the DMC. Once the decision-making phase is open, the person may make written and oral representations to the DMC. If a person subject to DFSA enforcement action refers the matter to the FMT (which is part of the DFSA, albeit operationally independent), the person will have the opportunity to be heard in writing, and in person at the relevant hearing. The FSRA provides similar rights to those available in the DIFC.

  55. 28.

    What form does the advocacy with a securities or related law enforcement authority typically take? 

  56. In Onshore UAE, the SCA laws and regulations do not prescribe the form of advocacy that can be adopted during investigations. Advocacy may take the form of written submissions in Arabic as deemed appropriate.

    In criminal complaints and cases, however, the initial investigations conducted by the Police and the Public Prosecution usually take place at a local police station or the Public Prosecution, and can take the form of submitting documentary evidence and oral witness evidence. Investigations are conducted in Arabic, and a translator will be requested in cases where this is required.

    In the DIFC, there is no prescriptive form of advocacy with Enforcement during the investigation phase (matters are frequently discussed over the phone, in person or by email). However, during the decision-making phase, the procedures of Schedule 3 of the Regulatory Law apply. These provide for the person to make (usually made in that order) written and/or oral representations to the DFSA. The hearing for making the oral representations would be made in a quasi-tribunal setting, with Enforcement being present on one side, the accused on the other, and the DMC in the middle presiding over the session. The DMC usually circulates a schedule of the hearing in advance, which allocates speaking time for Enforcement and the accused. The DMC may ask any question to anyone, at any time during the hearing. Following the oral representations hearing, the DMC would retire to issue its decision, usually within a week of making the oral representations (this is highly variable, depending on the complexity of the matter). We note that the DFSA requires communication to which it is a party to be conducted in English[1]. At the FMT stage, the hearing is similar to a typical English tribunal in terms of process, with both parties’ advocates given the opportunity to make opening statement, substantive submissions and to examine and cross-examine witnesses. The process in the ADGM is materially similar to that in the DIFC.



    [1] See article 117 of the Regulatory Law and GEN Rule 6.9.1.

  57. 29.Are statements or advocacy positions taken by an investigated party during the investigation process deemed admissions and binding in future proceedings? Would such statements be made public?
  58. In Onshore UAE, statements made during the investigation process by the SCA will not likely constitute a formal admission. However, in practice, it would be difficult for an investigated party to abandon a position that has been asserted in this way in future proceedings.

    In criminal complaints and cases, statements made during the investigation process are recorded and signed by the person making the statement and would be admissible in criminal court proceedings.

    In the FFZs, statements taken by an investigated party during an investigation are admissible in evidence in any proceedings, provided that any such information or document also complies with any requirements relating to the admissibility of evidence in such proceedings. However, statements made on a without prejudice basis will not be admissible. The regulator does not disclose such statements to any law enforcement agency for the purpose of criminal proceedings against the person unless: (ia) the person consents to the disclosure; or (ii) the regulator is required by law or court order to disclose the statement. As mentioned further above, the regulators in the FFZs treat all non-public information and documents they receive in carrying on their functions as confidential, and therefore, are not made public. However, the regulator may refer to, and reproduce, such statements in its final decision, which is usually made public.

    Timing

  59. 30.What is the limitation period for charges for securities and related violations?
  60. In Onshore UAE, a complaint must be lodged with the SCA within one year from the date of the last disputed trading or from the date of establishing knowledge of the incident subject of complaint.

    In respect of criminal cases, there is no single limitation period. The limitation period applies by reference to the specific violation, whether it be an SCA-specific violation or violation of one or more of the UAE's federal laws.

    Criminal offences in the UAE are divided into three broad categories: felonies, misdemeanours and minor contraventions. The limitation period for felonies is 20 years, five years for misdemeanours and one year for minor contraventions.

    In the DIFC, the DFSA may only exercise a power in relation to a person within three years after the day on which the DFSA became aware of the act or omission that gave rise to the right to exercise the power in respect of that person[1]. The DFSA is deemed to have become aware of the act or omission if:

    • it has information from which the act or omission can reasonably be inferred; and
    • a proceeding against a person is commenced when a notice is first provided to the person, or a proceeding is commenced by the DFSA in the FMT or the DIFC Court, with respect to the act or omission.

    In the ADGM, the FSRA may exercise its investigative powers in respect of a former regulated entity in relation to the business of that entity at the time it was licensed by the FSRA. There is no time limitation stated in the law that would restrict this power. Note that this power does not appear to apply to individuals who were previously authorised by the FSRA.



    [1] See article 63(2) of the Regulatory Law.

  61. 31.When does the limitation period begin to run?
  62. In Onshore UAE, the limitation period, as per the SCA laws and regulations, runs from date of the last disputed trading or from the date of establishing knowledge of the incident subject of complaint.

    In criminal cases, the limitation period begins to run on the date of the commission of the relevant offence.

    The limitation period for the DFSA begins as follows:

    • when the DFSA is aware of an act or omission if it has information from which the act or omission can reasonably be inferred; and
    • a proceeding against a person is commenced when a notice is first provided to the person or a proceeding is commenced by the DFSA in the FMT or the DIFC Court, with respect to the act or omission.
  63. 32.What can suspend the running of the limitation period? Can the securities and related law enforcement authorities request a tolling agreement?
  64. In Onshore UAE, the SCA laws do not address limitation periods or tolling agreement. Accordingly, such suspicion or request for a tolling agreement will be at the sole discretion of the SCA.

    In criminal complaints and cases, a limitation period in respect of a criminal offence can never be stayed. It should however be noted that a criminal investigation operates to stop the limitation period in the same way as a trial does, provided that an accused has been notified of the investigation.

    In the FFZs, the running of the limitation period would be suspended at the time the DFSA commences an investigation.

    DFSA procedures do not provide for tolling agreements to suspend the running of the limitation period, but the DIFC Courts would probably uphold a tolling agreement.

    There is no limitation period restricting the FSRA from conducting investigations against formerly licensed entities in the ADGM.

  65. 33.How long does a securities or related investigation typically take?
  66. In Onshore UAE, investigations are not generally publicised and the period of an investigation can vary. Nevertheless, in our experience, investigations now are being processed in shorter times (ie, in months rather than years).

    In the FFZs, there is no set deadline for completing an investigation. In the ADGM, the FSRA has to date only completed a couple of enforcement actions, which is not enough for us to provide an estimate (however, this should take months and not years). In the DIFC, this has historically depended on the seriousness of the breach, the number of breaches, the number of persons involved, the overall complexity of the case, and the willingness of the parties to settle. From our experience, most investigations take between 12 and 18 months. However, there are exceptions: in the Deutsche Bank case, although the case against the bank was settled after around a year, the proceedings against involved individuals have been ongoing for over four years. A number of persons choose to settle as early as possible to take advantage of the discount on the DFSA fines (the earlier the settlement, the higher discount).

    There is no prescribed period for a Police or Public Prosecution's Investigation. Indeed, investigations can be completed within a few months, while others can last for years. Factors that affect the length of the investigation are: (i) the documentary evidence provided; (ii) the complexity of the case; (iii) the nature of the complaint; (iv) public policy; and (v) the police and the Public Prosecution’s workload.

    Resolution

  67. 34.What is the process for closing an investigation if the investigation does not reveal a violation of securities or related laws? Will the securities or related law enforcement authorities provide written confirmation that the investigation is closed without action?
  68. In Onshore UAE, there is no prescribed process for closing an investigation where a violation is not revealed. Nevertheless, in our experience, the SCA would provide a written confirmation that the investigation is closed without action.

    In the FFZs, the regulator would send a letter notifying the relevant person of discontinuance of the action against him.

    In criminal cases, the Police or Public Prosecution will archive the criminal complaint and documentary evidence and records created during the course of the investigation. Written confirmation is not usually provided, but may be provided on request.

  69. 35.How will the resolution or settlement process be initiated?
  70. In Onshore UAE, there is no prescribed process for settling an investigation or complaint with the SCA. Accordingly, such resolution or settlement would be made at the discretion of the SCA.

    In the FFZs, the person subject of an enforcement action can offer to settle at any point before the issuance of the regulator's final decision notice. The settlement terms would be agreed between the parties after discussions on a without prejudice basis. The earlier the settlement, the higher the settlement discount applied to any potential fine. However, the regulator will only be able to settle when it is confident it has sufficient understanding of the nature and gravity of the suspected misconduct to make a reasonable assessment of the appropriate outcome. The outcome of a settlement is the regulator issuing a settlement decision notice, which is almost the same as a regular decision notice except for the mention that the matter was settled, mention of cooperation and good faith by the subject of the proceeding, the applied discount, and the possibility of the subject of the notice to make suggestions to the DFSA in relation to the wording of the notice (ie, to make it sound more favourable). A settled notice is also published along with a press release.

    In criminal complaints, there is no prescribed process for settling an investigation process. Depending on the nature of the crime, the Public Prosecution may offer the accused the opportunity to settle the matter, and for financial cases, may insist on losses to be repaid for the case to be withdrawn.

    If the matter is settled, the Public Prosecution or the court, or both (as the case may be and depending on how far the investigation progressed) will record the settlement.

  71. 36.Who decides whether to proceed with charges and what charges to select? 
  72. In Onshore UAE, the relevant department within the SCA handling an investigation will decide on which charges to bring against a violator.

    In the FFZs, as detailed further above, the initial allegations would be drawn by the regulator's enforcement team in consultation with the regulator’s legal advisers, after scoping the matter. Once the matter is in the decision phase, it is for the regulator's decision maker (in the DIFC it is the DMC) to decide whether to proceed with the charges recommended to him or her by the enforcement team, to amend them by adding or removing charges, or dropping the matter altogether.

    In respect of criminal cases, please see our response to question 7. Article 7 of the Penal Procedures Code provides that the Public Prosecution (or Attorney General in some cases) has exclusive jurisdiction and discretion to lodge and pursue criminal cases save where a law indicates otherwise.

  73. 37.What factors would a securities or related law enforcement authority consider in selecting charges and the severity of any penalty or fine?
  74. In Onshore UAE, regarding SCA enforcement actions and in criminal cases, this will depend on, among others, on the type and seriousness of the violation, the record of the violator and the extent of the prejudice caused.

    In the FFZs, in selecting the misconduct to pursue, the regulator usually goes for the ones which have the highest chances of success (with the more serious breaches being higher on that list), but also, those that serve a regulatory message the regulator would like to convey to the regulated community (ie, set an example for deterrence purposes, signal a policy shift). In setting the severity of the sanctions, the regulator considers a range of factors which include:

    • the DFSA’s objectives;
    • the deterrent effect of the penalty on persons who have committed or may commit the contraventions, and other persons who have committed or may commit similar contraventions;
    • the nature, seriousness and impact of the contravention, including whether the contravention was deliberate or reckless;
    • if the contravention involved a number of persons, the degree of involvement and specific role of each person;
    • the benefit gained (whether direct or indirect, pecuniary or non-pecuniary) or loss avoided as a result of the contravention;
    • the conduct of the person after the contravention;
    • the difficulty in detecting and investigating the contravention that is the subject of the penalty;
    • whether the person committed the contravention in such a way as to avoid or reduce the risk that the contravention would be discovered;
    • the disciplinary record and compliance history of the person on whom the penalty is imposed;
    • whether the person acted in accordance with the regulator's guidance and other published materials;
    • action taken by the regulator in previous similar cases; and
    • action taken by other domestic or international regulatory authorities.

    In addition, the Police, the Public Prosecution or the courts will have regard to aggravating and extenuating circumstances, such as the age of the perpetrator, the perpetrator’s intentions (such as the exploitation of others), and public policy considerations.

  75. 38.What remedies can the securities or related law enforcement authorities consider? How are penalties calculated?
  76. In Onshore UAE, the remedies will depend on the type of the violation and can include one or more of the below:

    • issue a warning to the violator and force him to remedy the violation within a period determined by SCA;
    • impose a fine of no more than the maximum limit provided for in the SCA laws;
    • suspend the licence or the approval for no more than one year;
    • withdraw the licence or the approval issued by SCA; and/or
    • imprisonment ordered by the criminal courts.

    In the FFZs, the DFSA may:

    • take no further action;
    • commence a settlement negotiation;
    • accept a settlement;
    • seek to have the matter referred to the DMC;
    • commence court proceedings;
    • exercise a power on behalf of another regulator;
    • delegate a power to another regulator; and/or
    • impose a penalty.

    Once a matter is referred to the DMC, the DMC may decide:

    • imposition of a fine;
    • imposition of a censure;
    • imposition of conditions or restrictions on a Licence or in relation to a Licence endorsement;
    • withdrawal of an authorisation under, or endorsement on, a Licence;
    • withdrawal of a licence;
    • imposition of conditions or restrictions on an authorised individual or key individual;
    • restriction or suspension of an authorised individual or key individual[1], or the withdrawal of his or her authorisation;
    • withdrawal of the registration of a "DNFBP"[2];
    • revocation of recognition;
    • appointment of a manager; or
    • withdrawal or suspension of the registration of a Registered Auditor or Audit Principal

    The DFSA will determine a financial penalty figure that reflects the seriousness of the contravention. In determining such a figure, the DFSA will take into account various factors, which will usually fall into the following four categories:

    • factors relating to the impact of a contravention;
    • factors relating to the nature of a contravention;
    • factors tending to show whether a contravention was deliberate; and
    • factors tending to show whether a contravention was reckless.

    The DFSA does have a policy on discounts for early cooperation and settlement. The average discount is around 20 per cent. The FSRA has materially similar powers, and policies regarding the exercise of its sanctions powers.

    The Public Prosecution has significant discretion when determining penalties, although there is guidance in the Penal Code depending on the particular offence. The Public Prosecution has discretion not to pursue an individual who voluntarily reported a criminal offence before it was discovered by the authorities.



    [1] Those terms have the meaning assigned to them in the DFSA Rulebook.

    [2] Means Designated Non-Financial Businesses and Professions.

  77. 39.Do illegal profits have to be disgorged, and if so, how are they determined?
  78. In Onshore UAE, while the SCA laws and regulations do not address the disgorgement of illegal profits, the SCA does have the discretion to order a disgorgement.

    In the FFZs, both the DFSA and FSRA have a power to order disgorgement. The regulator will seek to deprive a firm of the economic benefits derived directly or indirectly from a contravention (which may include the profit made or loss avoided) where it is practicable to quantify this. The DFSA will ordinarily also charge interest on the benefit. The DFSA has discretion to determine the quantum of the illegal profits. A settlement discount does not apply to disgorgement of economic benefits derived directly or indirectly from a contravention.

    In respect of criminal cases, the Penal Code provides that where a crime motivated by the realisation of profit, is committed and no fine is inflicted by the law, a judge may, in addition to the principal punishment provided for the crime, impose a fine not exceeding the amount of profit realised, unless there is a law to the contrary (but this will be paid to UAE authorities, rather than the victim of the crime). Under article 26 of the AML Law, once a perpetrator of the respective crime has been convicted, the court may also order the confiscation of funds, proceeds or profits accumulated in connection with the crime.

  79. 40.Can criminal charges be brought against companies in your jurisdiction for violations of securities and related laws?
  80. In Onshore UAE, criminal charges can be brought against companies (in addition to individuals). In practice, criminal sanctions mostly consist of imprisonment, which can only be imposed on individuals. Criminal proceedings can only be brought by the Public Prosecution with the assistance of the Police.

    In the FFZs, the regulators do not have criminal jurisdiction. Violations of the securities and related laws are civil violations, not criminal. However, criminal proceedings could be brought by the Public Prosecution if the acts committed amount to a criminal offence under UAE law.

  81. 41.

    Will the securities and related law enforcement authorities provide a reduced penalty for cooperation? What standard will the authorities use when taking into account any cooperation?

  82. In Onshore UAE, while the SCA laws and regulations do not address reduced penalties for cooperation, the SCA will have the discretion to make such decisions. The Public Prosecution also exercises discretion to provide reduced penalties. In practice, we have not heard of the SCA reducing penalties for cooperation.

    In the FFZs, as discussed above, a discount may be applied to any fine in cases where the subject of the enforcement action has disclosed the misconduct or cooperated with the regulator. The earlier the settlement of a matter, the higher the discount (which is usually around 20 per cent, with a recorded maximum of 30 per cent in the DFSA's Clements and ABN Amro cases). Furthermore, the regulator in determining the quantum of a fine will consider any mitigating factors.

  83. 42.Are deferred prosecution agreements or non-prosecution agreements permitted?
  84. In both Onshore UAE and the FFZs, the law does not provide for DPAs or NPAs.

  85. 43.Will a court need to approve the settlement agreement with a securities or related law enforcement authority?
  86. In Onshore UAE, if the matter is settled, the Public Prosecution and/or the court (as the case may be and depending on how far the investigation progressed) will record the settlement. 

    In the FFZs, there is no requirement for settlement decision notices to be approved by the FFZ courts. These are usually approved and issued by the regulator's decision maker (ie, the DMC in the DIFC).

  87. 44.If a settlement occurs, will an admission to certain facts or wrongdoing be required?
  88. In Onshore UAE, while the SCA laws and regulations do not address such settlement arrangements, the SCA will have the discretion to impose an admission to certain facts or wrongdoing to ensure transparency of information and transparent disclosure to the public.

    In the FFZs, as mentioned further above, a settlement decision notice would essentially contain the same information as a regular decision notice. This includes background information about the facts of the matter, and the misconduct (as agreed upon) and the corresponding regulatory breaches, as well as the penalty. A settlement decision notice is essentially an agreed admission of facts and misconduct in return for a lighter penalty. A settlement decision is also published.

  89. 45.Can the findings or decisions of the securities or related law enforcement authorities be administratively appealed? Appealed to a court?
  90. In Onshore UAE, decisions of the SCA as to the penalties of issuing a warning or a fine may be appealed before the Grievance Settlement Committee at the SCA within 30 days of notification. The SCA’s decision on the appeal shall be final, but can be referred to the Onshore UAE Courts as an administrative decision. SCA decisions as to the penalties of encashment of a bank guarantee in part or in full, or suspension of a broker from activity may also be appealed before the competent Onshore UAE Court. In such cases the appeal shall be made within 30 days from the date of notification of the decision imposing the penalty.

    In the DIFC, a decision of the DFSA can be referred to the FMT for review (ie, a form of appeal). Upon a referral, the FMT (which is operationally independent of the DFSA) is required to conduct a full merits review of the DFSA decision. In doing so, the FMT would look at all the relevant facts afresh and take into account all relevant matters, including any matters that the DFSA may have not been aware of, or had disregarded, when the DFSA made its decision.

    After review of the DFSA decision, the FMT has the power to make a new decision using the powers available to the DFSA as the original decision maker. This could involve confirmation of the original decision made by the DFSA, substituting the DFSA decision with a new decision, or referring the matter back to the DFSA with a direction for the DFSA to make a fresh decision.

    A decision of the FMT may be reviewed by the DIFC Court but only on a point of law.

    In the ADGM, a person may refer an FSRA decision to the FSRA's Regulatory Committee for a full merits review. A decision of the Regulatory Committee may be referred to the FSRA's Appeals Panel for a full merits review. A decision of the Appeals Panel may be appealed to the ADGM Court of First Instance on the grounds that it is wrong in law or is in excess of jurisdiction.  

    In criminal cases, an accused will have two opportunities during the investigation stage to put forward his or her version of events. The decision of the Public Prosecution to refer the matter to a criminal court itself cannot be appealed. If a decision to issue a warrant for the accused's arrest is issued, the accused can appeal this decision to the Court of Appeal, whose decision on the matter is binding. The criminal courts comprise the Court of First Instance, the Court of Appeal and the Court of Cassation. Court of First Instance and Court of Appeal decisions are appealable (on matters of fact and law), while Court of Cassation decisions are final and binding.

  91. 46.If a decision can be administratively or judicially appealed, what are the consequences of an adverse decision on appeal? What are the consequences of a positive decision on appeal? 
  92. In Onshore UAE, the consequences of a decision being reversed on appeal by the SCA or the courts will depend on the issue in the appeal. In some cases, an appeal may be on a point of law in which case the decision may be remanded for further proceedings. In some circumstances, the case may be dismissed entirely.

    In the DIFC, after review of the DFSA decision, the FMT has the power to make a new decision using the powers available to the DFSA as the original decision maker. This could involve confirmation of the original decision made by the DFSA, substituting the DFSA decision with a new decision (including quashing the DFSA’s decision), or referring the matter back to the DFSA with a direction for the DFSA to make a fresh decision. In the ADGM, the Regulatory Committee has similar powers to the FMT, as does the FSRA’s Appeals Panel with the exception that it would not refer a matter back to the FSRA.

    Collateral consequences

  93. 47.

    What are some of the collateral consequences of a resolution or settlement with a securities or related law enforcement authority? 

  94. In some cases, enforcement action will be public and may, in addition, trigger disclosure obligations where the subject of the investigation is a listed company.

    In the FFZs, the main collateral consequence of reaching a resolution with the DFSA is the reputational damage since the regulator’s decision would be published when it becomes final. This may trigger additional claims from shareholders, related parties and/or clients as a result. Another collateral consequence is the mention of third parties (eg, by way of background), either expressly or by inference, in a published decision notice, and the defamation risk for the DFSA that may arise under the Penal Code (the DFSA goes to great extent to make sure does not happen and usually affords third parties the opportunity to make representations before publication). Furthermore, having been the subject of a decision notice by a regulator might disqualify such person from holding certain functions the person would need to be vetted or assessed for fitness and propriety (such as for certain Authorised Individuals in the DIFC applying to hold a licensed function, eg, senior executive officer).

    Criminal proceedings are not generally reported in the UAE but may sometimes be reported in the press. The decisions are also archived and remain on the individual or company’s record with the UAE authorities.

  95. 48.

    What are some of the collateral consequences of a conviction or the imposition of liability by a court?

  96. See question 47.

    In addition, where an individual rather than a corporation is convicted, this will remain on the individual’s record with the UAE authorities and will affect that individual’s ability (particularly in the case of expatriates) to obtain gainful employment, and the residency permits required to conduct business or be employed in the UAE. In many instances, UAE residents (who are not nationals) will be deported following conviction and sentence.

  97. 49.Can private securities or related legal claims proceed parallel to investigations by securities and related law enforcement authorities?
  98. The interaction between private litigation and investigations by the relevant authorities can be complex, and there are particular risks around issues relating to the investigations being (or becoming) subject to disclosure and inspection in related litigation.

    Where a dispute relates to the same underlying subject matter, criminal proceedings operate to stay proceedings before the civil courts, though civil proceedings may be brought before the criminal courts to be examined concurrently with the criminal case.

    As indicated above, however, the SCA will typically first conduct an investigation and thereafter refer it to the criminal court where it considers criminal penalties it cannot administer itself may apply.

    In the FFZs, we are not aware of any reason which would prevent private securities or related legal claims from running in parallel with the regulator's investigation. The FFZ regulators have the discretion to stay its investigation if the outcome of the private claim would have a material impact on its regulatory action. The DFSA has a power to join a private legal claim as an "interested party".

  99. 50.What effect will findings by an authority in another jurisdiction have in private proceedings?
  100. Findings by authorities in other jurisdictions may be admissible in evidence in private proceedings, but their effect (ie, whether negative or positive, and scope of impact) will depend on the specific facts of the case.

    Subject to any specific treaty on reciprocal enforcement of judgments, the Police, the Public Prosecution or the courts are not bound by findings of other authorities. The findings will be treated as ordinary documentary evidence, though the value and weight attributed to the evidence may vary depending on the issuing body and there can be periodical challenges in submitting evidence from overseas authorities.

  101. 51.Can private plaintiffs obtain access to the files or documents the securities or related law enforcement authorities collected during the investigation?
  102. We assume for the purposes of this question that a private plaintiff is a third party to the regulatory action.

    In Onshore UAE, disclosure would normally be sought from the defendant in litigation rather than from the SCA. To obtain disclosure from the SCA, the private plaintiff would be required to make an application for non-party disclosure. The decision will be subject to discretion of the SCA.

    In the FFZs, private plaintiffs cannot obtain access to the regulator's material which was collected in the course of an enforcement action (ie, other than the published decision notice). These are subject to the FFZ regulator's confidentiality requirement. The FFZ regulator may disclose confidential information where such disclosure:

    • is permitted or required under the Law or Rules or under other legislation administered by the regulator;
    • is permitted or required by any other law;
    • is made to: (a) the companies registrar; (b) a financial services regulator; (c) a governmental or regulatory authority exercising powers and performing functions relating to anti-money laundering, counter-terrorist financing or sanctions compliance; (d) a self-regulatory body or organisation exercising and performing powers and functions in relation to financial services; (e) a civil or criminal law enforcement agency; or (f) a governmental or other regulatory authority including a self-regulatory body or organisation exercising powers and performing functions in relation to the regulation of auditors, accountants or lawyers; for the purpose of assisting the performance by any such person of its regulatory functions; or
    • is made in good faith for the purposes of performance and exercise of the functions and powers of the regulator.

    With respect to criminal proceedings, see question 5. The party that makes a criminal complaint or is the subject of such a complaint or a criminal case, or an individual authorised on their behalf pursuant to a power of attorney, can request access to files or documents related to the investigation or proceedings, or both.

    At the investigation stage, it may be at the police’s discretion whether it grants access to its investigation documents. During proceedings, the relevant parties have a right to view the memoranda submitted, though it is important to note that there is no principle of disclosure in UAE litigation, and therefore the documentary evidence submitted by each party is simply that on which it wishes to rely.

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Questions

    Regulatory environment

  1. 1.What are your country’s primary securities or related law enforcement authorities? 
  2. 2.What are the principal violations or legal issues that the securities or related law enforcement authorities investigate?
  3. 3.If there is more than one authority involved in a securities or related investigation, how is jurisdiction allocated? What is the interplay between the securities regulator and the public prosecutor?
  4. 4.Do the securities or related law enforcement authorities have investigatory powers? Can they bring administrative, civil or criminal proceedings? 
  5. 5.Are regulatory or criminal securities and related investigations public? Under what circumstances? 
  6. 6.Are regulatory or criminal securities and related investigations targeted at the company or the individuals involved, or both?
  7. Investigation procedure

  8. 7.How do the securities and related law enforcement authorities typically begin an investigation?
  9. 8.What level of suspicion of wrongdoing is required for the securities or related law enforcement authorities to begin an investigation?
  10. 9.May the securities or related law enforcement authorities conduct dawn raids? Does this depend on the nature and seriousness of the allegations?
  11. 10.

    Must the findings of a company's internal review be reported to the securities or related law enforcement authorities? When and under what circumstances?


  12. 11.Are whistleblowers a frequent source of information for securities and related investigations? 
  13. 12.Describe the typical phases of a securities or related investigation in your country.
  14. 13.What are the mechanisms by which a securities or related law enforcement authority may cooperate and coordinate with authorities outside your jurisdiction?
  15. 14.Will a securities or related law enforcement authority take into account findings by a law enforcement authority outside your jurisdiction in the course of its investigation?
  16. Document production

  17. 15.What can the securities and related law enforcement authorities require to be produced as part of an investigation? Do the powers of a regulator differ from those of the public prosecutor?
  18. 16.Will a litigation hold or will other instruction to preserve documentation need to be issued? When?
  19. 17.Can the securities and related law enforcement authorities request the production of materials protected by attorney-client privilege or work-product doctrine? Can the securities and related law enforcement authorities use protected materials if it obtains them from third parties?
  20. 18.How is confidential information or commercially sensitive information treated by the securities and related law enforcement authorities?
  21. 19.Can the target of a document request exercise a right not to produce?
  22. 20.

    Do any data privacy, bank secrecy or other laws restrict the production of materials to a securities or related law enforcement authority in your jurisdiction? An authority outside your jurisdiction? May the company under investigation provide personal or bank customer data on a voluntary basis?


  23. 21.Are there any data privacy, bank secrecy or other laws that restrict where documents or other communications may be stored or reviewed for the investigation?
  24. 22.Are the securities and related law enforcement authorities able to obtain documents from outside the country?
  25. Witness interviews

  26. 23.Will the securities and related law enforcement authorities conduct witness interviews? If so, will the interviews be on the record? Will the interviews be made public?
  27. 24.Can witnesses exercise a right not to testify? Will any adverse inference be drawn if they do so?
  28. 25.Do witnesses receive separate counsel? Who provides counsel for witnesses?
  29. Advocacy

  30. 26.Can the target of a securities or related investigation challenge the investigation in court while the investigation is ongoing?
  31. 27.What opportunity will there be to respond to a securities or related law enforcement authority’s theories or allegations prior to the authority bringing charges?
  32. 28.

    What form does the advocacy with a securities or related law enforcement authority typically take? 


  33. 29.Are statements or advocacy positions taken by an investigated party during the investigation process deemed admissions and binding in future proceedings? Would such statements be made public?
  34. Timing

  35. 30.What is the limitation period for charges for securities and related violations?
  36. 31.When does the limitation period begin to run?
  37. 32.What can suspend the running of the limitation period? Can the securities and related law enforcement authorities request a tolling agreement?
  38. 33.How long does a securities or related investigation typically take?
  39. Resolution

  40. 34.What is the process for closing an investigation if the investigation does not reveal a violation of securities or related laws? Will the securities or related law enforcement authorities provide written confirmation that the investigation is closed without action?
  41. 35.How will the resolution or settlement process be initiated?
  42. 36.Who decides whether to proceed with charges and what charges to select? 
  43. 37.What factors would a securities or related law enforcement authority consider in selecting charges and the severity of any penalty or fine?
  44. 38.What remedies can the securities or related law enforcement authorities consider? How are penalties calculated?
  45. 39.Do illegal profits have to be disgorged, and if so, how are they determined?
  46. 40.Can criminal charges be brought against companies in your jurisdiction for violations of securities and related laws?
  47. 41.

    Will the securities and related law enforcement authorities provide a reduced penalty for cooperation? What standard will the authorities use when taking into account any cooperation?


  48. 42.Are deferred prosecution agreements or non-prosecution agreements permitted?
  49. 43.Will a court need to approve the settlement agreement with a securities or related law enforcement authority?
  50. 44.If a settlement occurs, will an admission to certain facts or wrongdoing be required?
  51. 45.Can the findings or decisions of the securities or related law enforcement authorities be administratively appealed? Appealed to a court?
  52. 46.If a decision can be administratively or judicially appealed, what are the consequences of an adverse decision on appeal? What are the consequences of a positive decision on appeal? 
  53. Collateral consequences

  54. 47.

    What are some of the collateral consequences of a resolution or settlement with a securities or related law enforcement authority? 


  55. 48.

    What are some of the collateral consequences of a conviction or the imposition of liability by a court?


  56. 49.Can private securities or related legal claims proceed parallel to investigations by securities and related law enforcement authorities?
  57. 50.What effect will findings by an authority in another jurisdiction have in private proceedings?
  58. 51.Can private plaintiffs obtain access to the files or documents the securities or related law enforcement authorities collected during the investigation?