• PD PD Public Disclosure Requirements

    • PD-A PD-A Introduction

      • PD-A.1 PD-A.1 Purpose

        • PD-A.1.1

          The purpose of this module is to set out the rules and guidelines that the banks should adhere to in order to enhance corporate and financial transparency through better public disclosure.

        • PD-A.1.2

          This module provides support for certain other parts of the Rulebook, mainly:

          (a) Principles of Business;
          (b) High Level Controls;
          (c) Audit Firms;
          (d) BMA Reporting Requirements;
          (e) Capital Adequacy;
          (f) Business and Market Conduct; and
          (g) Risk Management (i.e. market, credit, liquidity and operational).

        • PD-A.1.3

          This module also provides support for certain aspects relating to disclosure requirements stipulated in the BMA Law (Amiri Decree Law No. 23 of 1973) and the Bahrain Commercial Companies Law of 2001 (as amended).

      • PD-A.2 PD-A.2 Key requirements

        • General guidance and best practice

          • PD-A.2.1

            Section PD-B.1 lists the key guidance papers on disclosure as issued by the Basel Committee on Banking Supervision and International Organization of Securities Commissions. These papers serve as international best practice in financial and other disclosures.

        • Annual audited financial statements (annual reports)

          • PD-A.2.2

            Locally incorporated banks are required to publish their audited financial statements per the rules set out in the BMA law, Bahrain Commercial Companies Law of 2001 (as amended) and the Bahrain Stock Exchange regulations. The audited financial statements should be prepared in accordance with IAS.

          • PD-A.2.3

            Locally incorporated banks must, in their Annual Reports, provide timely information which facilitates market participants' assessment of them. There are seven broad categories of information (as set out in section PD-1.3 and section PD-1.4), each of which should be addressed in clear terms and with appropriate details to help achieve a satisfactory level of bank transparency.

        • Annual disclosure in the annual audited financial statements of banks listed on the Bahrain Stock Exchange (BSE)

          • PD-A.2.4

            The Directors' Report attached to the annual financial statements of banks (referred to under section PD-1.4) should contain details of the interests of Directors, chief executive officers and managers (persons as defined under section HC-2.1, respectively) in the shares of such banks. Such details should include:

            (a) total interests in the shares of such banks by individual persons mentioned above, and
            (b) changes in such interests from the previous financial year to the current financial year.

        • Semi-annual disclosure by commercial branches of foreign banks

          • PD-A.2.5

            Branches (referred to under section PD-2.2) are required by the Agency to prepare and disclose to the public the following information (in the same format as their Annual Audited Accounts) for their Bahrain operations on a semi-annual basis:

            (a) Balance Sheet, and
            (b) Profit and Loss Accounts

        • Publication of reviewed (unaudited) quarterly financial statements

          • PD-A.2.6

            Locally incorporated banks should prepare reviewed (unaudited) quarterly financial statements on a quarterly basis in accordance with International Accounting Standard 34 (Interim Financial Reporting). Such statements should be in the same form, and should be prepared on the same basis, as is required by Bahrain law for banks' annual published financial statements.

        • Disclosure of interest rates

          • PD-A.2.7

            The Agency requires all FCBs to display, by a conspicuous notice, their current effective rate of interest and charges.

        • Disclosure relating to Deposit Protection Schemes (the 'Scheme')

          • PD-A.2.8

            The Agency requires all FCBs to give prominence to the protection of deposits afforded under the Deposit Protection Scheme (see chapter CP-2) — for example in related marketing materials and in general notices featured within banking halls and in account documentation, including audited financial statements.

        • Public disclosure via the internet

          • PD-A.2.9

            Non-listed locally incorporated OBUs and IBs may apply to the Agency to disclose their quarterly financial statements via the Internet. If a non-listed locally incorporated OBU or IB wishes to cease disclosure of quarterly financial statements via the local press and use the internet instead, it must satisfy the criteria in paragraph PD-5.1.2.

      • PD-A.3 PD-A.3 Regulation history

        • PD-A.3.1

          This module was first issued in July 2004 as part of the conventional principles volume. All subsequent changes are dated with the month and year at the base of the relevant page and in the Table of Contents. Chapter UG-3 of Module UG provides further details on Rulebook maintenance and control. The most recent changes made to this module are detailed in the table below:

          Summary of changes

          Module Ref. Change Date Description of Changes
          PD-5 Jan 2005 New Internet Disclosure rules
          PD-4.1 Jul 2005 Small definition change to consumer loans
          PD-2.1, PD-3.1 Jan 2006 Revised notification requirements for disclosures
          PD-3.1, April 2006 Specific requirements to disclose changes in shareholders' equity

        • Evolution of the Module

          • PD-A.3.2

            Prior to the development of this Rulebook, the Agency had issued various circulars representing regulations covering different aspects of public disclosure requirements. These circulars have now been consolidated into this module covering regulations relating to public disclosure requirements. These circulars and their evolution into this module are listed below:

            Circular Ref. Date of Issue Module Ref. Circular Subject
            EDBC/14/96 17 Jan 1996 PD-B.2 Public Disclosure of the Trading and Derivatives Activities of Banks and Securities Firms
            BC/2/99 21 Feb 1999 PD-1.3, PD-3.2 Public Disclosure
            BC/3/02 13 Mar 2002 PD-1.3 Additional Public Disclosure Requirements Amended Version — 2002
            no reference
            (partial)
            Apr 1981 PD-1.5 Precious Metals and Commodities
            BMA/751/93 8 Jul 1993 PD-1.1, PD-1.3, PD-1.4, PD-3.2 Directors' Interest in the Shares of, and the Unaudited Quarterly Financial Statements of, Locally Incorporated Banks Quoted on the Bahrain Stock Exchange.
            EDBC/782/93 17 Jul 1993 PD-1.1 The Interests of Directors, Chief Executive and Senior Managers in the Shares of Locally Incorporated Banks Quoted on the Bahrain Stock Exchange.
            BC/1/99 22 Feb 1999 PD-2.2 Enhancing Bank Transparency
            OG/73/02 17 Feb 2002 PD-4.2 Duty to Display Current Effective Rate of Interest
            OG/50/92 4 Mar 1992 PD-4.2 Consumer Finance
            OG/107/01 3 Mar 2001 PD-4.3 Disclosure of BD Interest Rates
            OG/425/94 21 Dec 1994 PD-4.4 Deposit Protection
            OG/423/93 28 Nov 1993 PD-4.4 Deposit Protection Scheme (the "Scheme")

        • Effective date

          • PD-A.3.3

            The contents in this module are effective from the date depicted in the original circulars (see Paragraph PD-A.3.2) from which the requirements are compiled.

    • PD-B PD-B General guidance and best practice

      • PD-B.1 PD-B.1 Guidance provided by other international bodies

        • Basel Committee on Banking Supervision: Various papers

          • PD-B.1.1

            The papers below are to be taken as guidance by licensees in order to improve public disclosure practices.

          • PD-B.1.2

            The Basel Committee on Banking Supervision has issued various papers in relation to the subject matter of this module. These papers are listed as below:

            •  'Enhancing Bank Transparency' — September 1998 (see www.bis.org/publ/bcbs41.pdf)
            •  'Sound Practices for Loan Accounting and Disclosure' — July 1999 (see www.bis.org/publ/bcbs55.pdf)
            •  'Best Practices for Credit Risk Disclosure' — September 2000 (see www.bis.org/publ/bcbs74.pdf)

          • PD-B.1.3

            In addition, the Basel Committee, in conjunction with the International Organization of Securities Commissions (IOSCO) has issued the following papers that relate to the subject matter of this module:

            •  'Public Disclosure of the Trading and Derivatives Activities of Banks and Securities Firms' — November 1995 (see www.iosco.org document no. IOSCOPD48)
            •  'Recommendations for Public Disclosure of Trading and Derivatives Activities of Banks and Securities Firms' — October 1999 (see www.bis.org/publ/bcbs48.pdf)
            •  'Intra-group Transactions and Exposure Principles' — December 1999 (see www.bis.org/publ/bcbs62.pdf)
            •  'Risk Concentrations Principles' — December 1999 (see www.bis.org/publ/bcbs43.pdf)

    • PD-1 PD-1 Annual disclosure requirements

      • PD-1.1 PD-1.1 Introduction

        • PD-1.1.1

          The purpose of this chapter is to set out the Agency's requirements relating to the disclosure of information in the bank's annual audited financial statements ('Annual Report'). This chapter also refers to the Bahrain Commercial Companies Law of 2001 (as amended) and the Bahrain Stock Exchange regulations relating to public disclosure and reporting requirements.

        • PD-1.1.2

          For the purpose of this module, the following definitions apply:

          (a) 'Director' includes any person who occupies the position of a Director and any person who appears to the Agency to be a Director (howsoever called) of the applicant/licensed locally incorporated bank and its subsidiaries;
          (b) 'Chief Executive/General Manager' means a person who is responsible under the immediate authority of the Directors for the conduct of the applicant/licensed locally incorporated bank, including its subsidiaries and overseas branches, and Bahrain branches of foreign banks;
          (c) 'Manager' means a person who, under the immediate authority of a Director or the chief executive/general manager, exercises major managerial functions or is responsible for maintaining accounts or other records of the applicant/licensed bank; and
          (d) 'Interest in the shares' shall include, but not be limited to, direct and/or indirect ownership of such shares, the right of voting associated with such shares, the right to receive dividends payable on such shares, and/or any right, regardless of the form thereof, to purchase (or otherwise acquire an interest in) such shares at any time.

      • PD-1.2 PD-1.2 Publication of annual audited financial statements (Annual Reports)

        • PD-1.2.1

          Locally incorporated banks are required to publish their audited financial statements per the rules set out in the BMA law, Bahrain Commercial Companies Law of 2001 (as amended) and the Bahrain Stock Exchange regulations (this latter obligation only applies to banks listed on the Bahrain Stock Exchange). The audited financial statements should be prepared in accordance with IAS.

      • PD-1.3 PD-1.3 Disclosure in the annual audited financial statements (Annual Reports)

        • Introduction

          • PD-1.3.1

            Banks (referred to under section PD-1.2) should, in their Annual Reports, provide timely information which facilitates market participants' assessment of them. There are seven broad categories of information (as set out in paragraphs PD-1.3.5 to PD-1.3.11 and section PD-1.4), each of which should be addressed in clear terms and with appropriate details to help achieve a satisfactory level of bank transparency.

          • PD-1.3.2

            The disclosure requirements listed in paragraphs PD-1.3.5 to PD-1.3.11 and section PD-1.4 below are in addition to or serve to clarify the disclosure requirements of IASs. These requirements may be:

            (a) integrated into the Notes to the Accounts; or
            (b) addressed in the Directors' Report.

          • PD-1.3.3

            The Agency requires that all banks referred to under section PD-1.2 should maintain an up-to-date checklist of all applicable International Accounting Standards (IASs) (including disclosure requirements) and the requirements set out in this section for full compliance purposes.

          • PD-1.3.4

            If a bank is not able to achieve full compliance with the requirements stated in this chapter, a meeting should be held with the Director of Banking Supervision Directorate at the Agency in the presence of the concerned external auditors to discuss the reasons for such non-compliance prior to the finalization of the Annual Report.

        • Financial performance and position

          • PD-1.3.5

            The following information relating to the financial performance and position of the bank should be included:

            (a) discussion of the main factors that influenced the bank's financial performance for the year, explaining any differences in performance between the current year and previous years and the reasons for such changes, and discussing factors that will have a significant influence on the bank's future financial performance;
            (b) basic quantitative indicators of financial performance such as ROAE, ROAA, NIM, cost-to-income ratios etc. for the past 5 years;
            (c) a discussion of the impact of acquisitions of new businesses;
            (d) quantitative information about own funds and its components (tier-1, tier-2. tier-3 capital), risk weighted assets, risk asset ratio and debt to equity ratio both on an average basis over the period and at year end; and
            (e) the impact of changes in the capital structure on earnings and dividends.

        • Corporate governance and transparency

          • PD-1.3.6

            The following information relating to corporate governance should be included in the bank's Annual Report:

            (a) information about the Board structure (e.g., the size of the Board, Board committees, and membership), and the basic organisational structure (lines of business structure and legal entity structure);
            (b) information about the profession, business title, and experience in years of each Board member and the qualifications and experience in years of senior executives, including Chairmen, Chief Executives and General Managers (see section PD-1.1 for definitions);
            (c) descriptive information on:
            (i) the managerial structure, including:
            1. committees (see section HC-1.3 for detailed disclosure requirements relating to various types of committees),
            2. segregation of duties,
            3. reporting lines, and
            4. responsibilities;
            (ii) incentive structure (remuneration policies, executive compensation, stock options, etc.);
            (iii) the structure and organisation of the credit risk management function, including the loan review function; and
            (iv) other related internal controls including internal audit;
            (d) nature and extent of transactions with affiliates and related parties;
            (e) approved Board's communications strategy (including the use of the bank's website) which should undertake to perform at least the following:
            (i) the disclosure of all relevant information to stakeholders on a timely basis in a timely manner; and
            (ii) the provision of at least the last three years of financial data on the bank's website.
            Banks are encouraged to maintain a website. If a bank does not have a website, it must state in its strategy how it will make all relevant information available to shareholders and stakeholders on a timely basis; and
            (f) information about any changes in the structures (as mentioned in paragraphs PD 1.3.6(a) to PD 1.3.6(c) above) from prior periods.

        • Risk management strategies and practices

          • PD-1.3.7

            The following information relating to the bank's risk management strategies and practices should be included in the Annual Report:

            (a) discussion of the overall risk management philosophy, overall policy and methodologies, the nature of risks in activities and how risks arise in those activities, how (in high level terms) these risks are managed and controlled; and
            (b) discussion of risk measurement and monitoring processes, the use of risk-mitigating tools (collateral, guarantees, credit insurance, netting agreements, managing concentrations, credit derivatives), limits (e.g., credit limits, market risk limits), and periodic review of exposures.

        • Credit risk exposures

          • PD-1.3.8

            The following information relating to credit risk should be included in the bank's Annual Report:

            (a) details on how the bank manages credit risk and information on whether or not strategies used have been effective;
            (b) descriptive information about the business lines that create credit risk, the bank's strategies regarding those business lines, and the nature and composition of the exposures that arise;
            (c) the magnitude of the bank's current credit exposure on an aggregate basis, as well as its significant components;
            (d) quantitative and qualitative information on the use of credit scoring and portfolio credit risk measurement models. More specifically, descriptive information about the types of models, portfolio(s) covered and size of portfolio(s), and quantitative and qualitative information about the credit risk measurement models used, including model parameters (e.g., holding period, observation period, confidence interval etc.), their performance over time, model validation, back testing and stress testing information;
            (e) summary information about internal rating processes and explanation of the loss concept used and how internal ratings are used in the bank's internal capital allocation process, and based on these internal credit rating processes, summary information on the quality of on- and off-balance sheet credit exposures, including a discussion of counterparty and internal credit rating (information about credit exposures based on external rating is encouraged, however, proprietary information is not expected);
            (f) high-level descriptive information on the techniques and methods used for managing past due and impaired assets, including the procedures for credit quality classifications and practices and procedures to determine provisions and to evaluate the adequacy of credit loss provisions (both general and specific);
            (g) quantitative information about gross positions by major business segments (e.g., lending, investments, trading, leasing and off-balance sheet exposures). Such information should include current and future potential exposures, (e.g. for guarantees given and derivatives etc) where appropriate. In addition, maturity breakdowns should be provided (these should be consistent with the maturity bands as required under IAS but should also be extended to include 5–10 years, 10–20 years and 20 years and over), as well as average balances for the current period (as distinct from end of period balances) where materially different;
            (h) quantitative information about the composition of on- and off-balance sheet credit exposures to:
            (i) major types of counterparty, including domestic and foreign governments, domestic and foreign corporates, consumers, and other financial institutions (such information should be provided without taking account of the effects of credit risk mitigation techniques),
            (ii) intragroup transactions and exposures to related parties, Directors and shareholders (separately identified) and whether such transactions have been made on an arms length basis, and
            (iii) highly leveraged institutions and other high-risk counterparties (separately disclosed);
            (i) quantitative information concerning concentrations of credit risk, and the magnitude of concentrations of credit exposures in different types of counterparty;
            (j) comprehensive quantitative information about the non-performing loans or other impaired and past due loans:
            (i) ageing schedule (over 3 months, over 1 year, and over 3 years) of past due loans and other assets
            (ii) breakdown by relevant asset category, counterparty type and geographic area, and
            (iii) where applicable, specific, general and other provisions on the major asset categories;
            (k) aggregate quantitative information about credit facilities that have been restructured, during the period, including:
            (i) the balance of any restructured loans,
            (ii) the magnitude of any restructuring activity,
            (iii) the impact of restructured credit facilities on provisions and present and future earnings, and
            (iv) the basic nature of concessions on all credit relationships that are restructured, including loans, derivatives and other on- and off-balance sheet activities,
            If full repayment is expected, the restructured credit need not be disclosed in this section after satisfactory performance for a period of six months in accordance with the modified terms;
            (l) an individual breakdown of movement of general and specific provisions and interest in suspense, and the key methodologies assumptions behind how these provisions are determined (including historical experience, current market conditions and trends);
            (m) quantitative and qualitative information about the use of credit derivatives and other instruments (e.g. netting agreements and guarantees received) that mitigate and reallocate credit risk. Information should include:
            (i) discussion of how instruments are used, including strategy and objectives,
            (ii) notional amounts and fair value of instruments,
            (iii) amount of credit risk bought and/or sold,
            (iv) breakdown by type of instrument (e.g., total return swap, credit default swap, or other credit derivatives), and
            (v) where instruments are recorded (i.e., trading vs. banking book);
            (n) quantitative information on securitised assets under the management of the bank, the amount and type of assets securitised, and the amount of risks or assets retained, details of subordinated or first loss assets retained, and any other recourse provisions; and
            (o) quantitative information concerning obligations with respect to recourse transactions (i.e. where the asset has been sold, but the bank retains responsibility for repayment if the original counterparty defaults or fails to fulfil obligations). Information should include the amount of the assets sold and any expected losses.

        • Market risk exposures

          • PD-1.3.9

            The following information relating to market risk should be included in the bank's Annual Report:

            (a) detailed quantitative information about the nature and extent of interest rate-sensitive assets and liabilities and off-balance sheet exposures (e.g., breakdown of fixed and floating rate items and the net interest margin earned, and the duration and effective interest rates of assets and liabilities). These disclosures should also identify classes of assets and liabilities, and related gains and losses, in addition to the effect on the value of assets, liabilities and economic equity for a given specific change in interest rates;
            (b) summarised quantitative information for significant concentrations of foreign exchange exposure by currency, broken down by hedged and unhedged exposures;
            (c) summarised quantitative information about price related market risk exposure (Value-at-Risk) (i.e., to equity, commodity and other markets), including:
            (i) the magnitude of the exposure on a weekly or monthly basis,
            (ii) the maximum and minimum values in the reporting period,
            (iii) the end-of-period values, and
            (iv) the assumptions (and or models) used in calculations (e.g., confidence level, holding period, etc.);
            (d) a histogram (or similar presentation) of the overall daily profits or exposures for aggregate market risk over the reporting period. As an absolute minimum, summarised aggregate quantitative information relating to monthly VaR results giving an overview of the extent of market risk related activities should be presented; and
            (e) information showing the performance of any VaR models for the period, in particular giving the number of times actual losses exceeded the VaR estimates of the model(s).

        • Other risk exposures

          • PD-1.3.10

            The following information relating to other risks should be included in the bank's Annual Report:

            (a) quantitative information about investments in foreign subsidiaries (as included in the Financial Statements section and representing foreign currency translation risk) supplemented by a discussion about:
            (i) the nature of the related currency exposure,
            (ii) how that exposure has changed from year to year,
            (iii) foreign exchange translation effects thereon,
            (iv) the earnings impact of foreign exchange transactions, and
            (v) the effectiveness of risk management (hedging) strategies;
            (b) qualitative information about the main types of operational risks including any specific problem that is considered to be individually significant, and how the bank manages and controls such risk;
            (c) quantitative information on any material legal contingencies, including pending legal actions, and a discussion and estimate of the potential liabilities, in addition to qualitative information about how the bank manages and controls such risks.

        • Compliance

          • PD-1.3.11

            The Annual Report should include a declaration by the external auditors that no violations have taken place of:

            (a) the Bahrain Commercial Companies Law of 2001 (as amended);
            (b) the BMA Law that might have had a material effect on the business of the bank or on its financial position; and
            (c) the licensing and authorisation requirements and other rules and regulations issued by the Agency.

            In so far as the violations have any material impact on the financial statements of the bank.

      • PD-1.4 PD-1.4 Additional disclosure in the annual audited financial statements of banks listed on the Bahrain Stock Exchange (BSE)

        • PD-1.4.1

          The content of this section is applicable only to locally incorporated banks listed on the Bahrain Stock Exchange (BSE).

        • PD-1.4.2

          The disclosure requirements set out in this section for banks referred to under paragraph PD-1.4.1 are in addition to those set out in Section PD-1.3.

        • Interests of Directors, chief executive officers and managers

          • PD-1.4.3

            Without prejudice to any other requirement of Bahrain law (or any other direction of the Agency), the Directors' Report section of the annual audited financial statements of banks should contain details of the interests of Directors, chief executive officers and managers (persons as defined under section PD-1.1, respectively) in the shares of such banks. Such details should include:

            (a) total interests in the shares of such banks by individual persons mentioned above, and
            (b) changes in such interests from the previous financial year to the current financial year.

          • PD-1.4.4

            For the purpose of the disclosure required under paragraph PD-1.4.3, any interests in the shares of a bank held by the spouse(s) or children of a Director, or any other person the control of whose interests in such shares lies ultimately with the Director, shall be deemed to be the interests of the relevant Director. For a definition of 'interest in the shares', see paragraph PD-1.1.2(d).

      • PD-1.5 PD-1.5 Disclosure relating to precious metals and commodities trading activities

        • PD-1.5.1

          The content of this section is applicable to all licensed banks authorised to carry out activities related to trading in precious metals and commodities in accordance with the requirements set out under chapter LR-5.

        • Dealing authorisation

          • PD-1.5.2

            All licensed banks authorized to carry out such dealing activities are required to show in their audited annual financial statements, as a note to or on the face of the balance sheet and profit and loss account, in addition to the disclosure requirements stated in this chapter, accounts detailing assets and liabilities related to precious metals and commodities and their profit and loss account income attributable to such dealing.

    • PD-2 PD-2 Semi-annual disclosure requirements

      • PD-2.1 PD-2.1 Disclosure by commercial branches of foreign banks

        • PD-2.1.1

          The content of this section is applicable only to FCB branches (licensed by the Agency) of foreign banks.

        • PD-2.1.2

          Banks (referred to under paragraph PD-2.1.1) are required by the Agency to prepare and disclose to the public the following information (in the same format as their Annual Audited Accounts) for their Bahrain operations on a semi-annual basis:

          (a) Balance Sheet, and
          (b) Profit and Loss Accounts.

        • PD-2.1.3

          The statements referred to under paragraph PD-2.1.2 should be reviewed by the bank's external auditors, in accordance with International Standards on Auditing (ISA) applicable to Review engagements.

        • PD-2.1.4

          These statements (referred to under paragraph PD-2.1.2) should be published in one local newspaper within eight weeks from the statements' date.

        • PD-2.1.5

          Banks must submit a newspaper copy of the statements (referred to under paragraph PD-2.1.2) to the Agency within eight weeks from the statements' date. The copy should be accompanied by a letter clearly showing on which date and in which publication(s) the statements were published.

    • PD-3 PD-3 Quarterly disclosure requirements

      • PD-3.1 PD-3.1 Publication of reviewed (unaudited) quarterly financial statements

        • PD-3.1.1

          The content of this section is applicable only to locally incorporated banks licensed by the Agency.

        • PD-3.1.2

          Banks should prepare reviewed (unaudited) quarterly financial statements on a quarterly basis in accordance with International Accounting Standard 34 (Interim Financial Reporting). Such reviewed quarterly financial statements should be in the same form, and should be prepared on the same basis, as is required by Bahrain law for banks' annual published financial statements.

        • PD-3.1.3

          Banks' unaudited quarterly financial statements should be reviewed by their external auditors who must also make a statement regarding the results of such review. Such review and statement should be made in accordance with the International Standard on Auditing Applicable to Reviews (RSI and RS2) as established by the International Federation of Accountants.

        • PD-3.1.4

          The reviewed quarterly financial statements should be published in one Arabic and one English daily newspaper widely available in Bahrain and/or any other country in which any of its shareholders ordinarily reside, within sixty days of the end of the quarter to which such statements relate.

        • PD-3.1.5

          The published quarterly statement must also include a statement of changes in shareholders' equity (see paragraph PD-1.3.5(f))

        • PD-3.1.6

          Banks must submit a newspaper copy of the statements (referred to under paragraph PD-3.1.2) to the Agency within 60 days from the statements' date. The copy should be accompanied by a letter clearly showing on which date and in which publication(s) the statements were published.

    • PD-4 PD-4 Other public disclosure requirements

      • PD-4.1 PD-4.1 Disclosure of current effective rate of interest on consumer loans

        • PD-4.1.1

          The contents of this section are applicable to all FCBs licensed by the Agency.

        • Display of rates by conspicuous notice

          • PD-4.1.2

            The Agency requires all FCBs to display, by a conspicuous notice, their current effective rate of interest on consumer loans. This requirement does not extend to overdrafts or revolving credit facilities such as credit cards.

          • PD-4.1.3

            'Consumer loans' are defined in CM-8.3.2.

          • PD-4.1.4

            'Conspicuous notice' means a written statement in both Arabic and English languages which is easily visible and legible and is displayed in all FCB premises open to the public.

          • PD-4.1.5

            FCBs are given discretion as to how the current effective rate of interest is expressed as a calculation (e.g. as a 'base rate' or as a range of rates) as long as the conspicuous notice provides real and meaningful information to the customer.

        • Advertising of consumer loan facilities

          • PD-4.1.6

            Any advertising of consumer loan facilities offered by the banks should specify only effective rates of interest (including all fees and charges) and not flat rates.

          • PD-4.1.7

            Banks are also asked to take special care to ensure that the content of any advertising material does not mislead or deceive the public in any way.

      • PD-4.2 PD-4.2 Disclosure of base rate of interest on overdrafts and short-term loans

        • PD-4.2.1

          The content of this section is applicable to all FCBs licensed by the Agency.

        • PD-4.2.2

          The Agency requires all FCBs to display, by a conspicuous notice, their base rate of interest on BD overdrafts and short-term revolving facilities to commercial customers. For a definition of 'conspicuous notice', refer to section PD-4.1.

        • PD-4.2.3

          FCBs are left free to decide their own base rate and to make changes to it as they consider appropriate.

        • PD-4.2.4

          FCBs must display a list of current charges including any standard charges and commissions that will be applied by the bank to individual services and transactions. See section BC-4.1 for further details.

      • PD-4.3 PD-4.3 Disclosure relating to Deposit Protection Scheme

        • PD-4.3.1

          The content of this section is applicable to all FCBs licensed by the Agency.

        • PD-4.3.2

          The Agency requires all FCBs referring (directly or indirectly) to the protection of deposits in related marketing materials and in general notices featured within banking halls and in account documentation, including Annual Reports, to prominently disclose the following statement:

          "Subject to the provisions thereof, deposits held with the Bahrain office of [name of the banking firm] are covered by the Deposit Protection Scheme established by the Bahrain Monetary Agency regulation concerning the establishment of a Deposit Protection Scheme and a Deposit Protection Board".

        • PD-4.3.3

          FCBs should, in discussions and/or correspondence with new and prospective customers, bring the Deposit Protection Scheme and the protection afforded by it to the customer's notice.

        • PD-4.3.4

          The Agency welcomes the introduction by the banks, at their discretion, of other appropriate means to promote the Deposit Protection Scheme as prominently as possible.

        • PD-4.3.5

          For detailed guidance on the Deposit Protection Scheme's documentation requirements, see chapter CP-2.

    • PD-5 PD-5 Public Disclosure via the Internet

      • PD-5.1 PD-5.1 Publication and disclosure of financial results

        • Existing requirements

          • PD-5.1.1

            All locally incorporated banks are required to disclose their quarterly financial statements to the public within 60 days of the end of each quarter. Disclosure to the public should be by way of an announcement in the local press of the balance sheet and profit and loss account (with certain other additional disclosures as outlined in chapters PD-1 to PD-4).

        • Criteria for application for disclosure via the internet

          • PD-5.1.2

            Non-listed locally incorporated IBs and OBUs may apply to the Agency to disclose their quarterly financial statements via the internet. If a bank wishes to cease disclosure of quarterly financial statements via the local press, it must satisfy the following criteria:

            (a) The bank has no shareholders resident in Bahrain.
            (b) The bank has no customers resident in Bahrain. Customers include borrowers, depositors, investment account holders or persons from whom the bank earns fees or commissions. "Customers" in this context would not include other banks, but would include Bahraini corporations, the Government of Bahrain and its agencies, and private individuals (whether high net worth or not).
            (c) The bank does not market itself in any way to residents of Bahrain. In particular, the bank should not market funds or other financial products to residents, even if the bank has no on balance sheet assets or liabilities arising from Bahraini residents.

          • PD-5.1.3

            Banks meeting all of the above criteria may apply to the Agency to disclose their quarterly financial statements by way of their website instead of by way of the local press.