MAC Sharaf Brokerage Suspended in Dubai on Trading Violations

09/07/2010 00:00 AST

MAC Sharaf Securities LLC, a Dubai- based brokerage, has been suspended from trading for three weeks after regulators said it breached market rules, according to a document obtained by Bloomberg News.

The brokerage lent clients funds to buy shares and charged them with late payment and administration fees, the letter dated June 21 from the Securities and Commodities Authority said, listing the act as a violation. The suspension started June 23 and will end July 13, according to the document. The letter mentions the names of some people who aren’t accused of wrongdoing.

A MAC Sharaf “representative” told the regulator he impersonated a client to trade shares of Emaar Properties PJSC with the agreement of the head of trading, the SCA said in the letter. Emaar has the biggest weighting on Dubai’s benchmark stock index.

The suspension was for “technical and online” issues, Mohammed Assef, head of customer service, said at MAC Sharaf’s office in Dubai yesterday. He didn’t know about the other issues. No one else was available for comment. An official at the Securities and Commodities Authority declined to comment.

Brokerages in the United Arab Emirates are faced with declining trading and tumbling markets, with some temporarily freezing licenses or closing. Dubai’s DFM General Index has slumped more than 80 percent from a record in 2005. About 78.4 million shares traded in the emirate yesterday, compared with a six-month daily average of 186 million.

IFA Securities LLC, a Dubai-based brokerage established by Kuwait’s International Financial Advisors KSCC, closed this week and plans to open in a year after finding another brokerage to combine with. Eleven brokerages in the U.A.E. have either shut down this year or are in the process of closing, The National newspaper reported in June, citing the market regulator. There are 91 brokerages in the country, according to the regulator’s website.

Bloomberg