What are the DIFC securities sub-sector risk ratings?
The securities sector in DIFC carries an overall medium residual ML risk rating. Sub-sector ratings are: brokerage at medium, wealth management at medium, crowdfunding at medium, advisory and arranging at medium-low, and representative office at low.
The DFSA assessed the securities sector inherent vulnerability as medium-high and the quality of general AML controls as medium-high. Because the sector is significant in size by number of firms, it was divided into five sub-sectors so that inherent vulnerability, control assessment and residual risk could be judged against actual business activity.
The spread from low to medium is narrower than the ADGM securities spread, where dealers and brokers reach medium-high. That difference traces back to the absence of physical precious metals dealing within the DIFC securities population.
Legal Reference (source document):
· UAE Money Laundering and Terrorist Financing National Risk Assessment, 2nd NRA (2024)
· National Anti-Money Laundering and Combatting Financing of Terrorism and Financing of Illegal Organizations Committee
Scope note: sub-sector ratings are assessed by the DFSA within the national NRA exercise.
Further reading: Designing an AML framework for regulated entities
Related questions on amlfaqs.com:
· What are the ADGM securities sub-sector risk ratings?
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· How does the UAE NRA apply inherent and residual risk to sector ratings?