• Part B

     

    Table of Contents
     
    Glossary of Defined Terms Glossary of Terms Jan 2021 PDF Version
    List of Circulars
    CBB Reporting Forms Licensing Requirements LR
    Annual License Fee Form (ALF) Appendix LR-1
    Direct Debit Authorisation Form Appendix LR-2
    Business and Market Conduct BC
    List of Dishonoured Cheques Appendix BC 1
    Financial Crime FC
    STR Form [Deleted: July 2016] Appendix FC 2
    MLRO Form [Deleted: July 2016] Appendix FC 4
    CBB Reporting Requirements
    Appendix BR 5: — PIR Bahraini Conventional Banks [Updated: 29 August 2016]
    Appendix BR 5A: — PIR Overseas Conventional Banks [Updated: August 2016]
    Appendix BR 6: — PIR Overseas Conventional Banks [Updated: August 2016]
    Appendix BR 20: — Guidelines for Completion of Supplementary Information Form by Conventional Banks [Updated: July 2021]
    Appendix BR 21: — Information Required for Annual and Interim Financial Review [Updated: April 2021]
    Appendix BR 22: — Continuous Professional Development Form (CPD) [Added: April 2017]
    Appendix BR 23: — Liquidity Coverage Ratio (LCR) [Added: July 2019]
    Appendix BR 24: — Net Stable Funding Ratio (NSFR) [Added: January 2020]
    BR
    Investigators' Report Appendix EN 1 EN
    Cyber Security Incident Report Appendix OM 1 OM
    CBB Authorisation Forms Licensing and Authorisation Requirements LR
    Form 1 (Application for a License) [Updated: July 2018] Form 1
    Form 2 (Application for Authorisation of Controller) [Updated: April 2020] Form 2
    Form 3 (Application for Approved Person Status) [Updated: April 2020] Form 3
    Supplementary Information High-level Controls [Updated Appendix HC-(i): Agreed-upon Procedures re Compliance with HC-5 (Remuneration): January 2017] HC
    General Requirements GR
    Business and Market Conduct
    Appendix BC 6: — Proposed Scale of Brokerage Fees [Updated: January 2019]
    Appendix BC 7: — Caps on Fees and Charges for Standard Services Provided to Individuals Applicable to Retail Banks From 01/May/2018 [Updated: April 2021]
    BC
    Capital Adequacy CA
    Credit Risk Management CM
    Sovereign Debt Provisioning Matrix Appendix CM 1
    Code of Best Practice on Consumer Credit and Charging Appendix CM 2
    Bahrain Credit Reference Bureau Code of Practice Appendix CM 3
    Regulation in respect of Close-Out Netting under a Market Contract Appendix CM 4
    Financial Crime
    Appendix FC 8: — Agreed Upon Procedures [Updated: July 2019]
    FC
    CBB Reporting Requirements BR
    Instructions for completion of statistical returns Appendix BR 1
    Guidelines for Overseas Conventional Banks Appendix BR 3
    Guidelines for completion of the PIR [Updated: July 2021] Appendix BR 4
    Guidelines for completion of Exposures to Connected Counterparties Appendix BR 12
    Instructions for Completion of the Eligible Accounts Report for the Deposits Protection Scheme Appendix BR 17
    Requirements for Report on Private Placements Appendix BR 18
    Public Disclosure PD
    Composition of Capital Disclosure Requirements Appendices PD-1 to PD-4
    Instructions for Publication of Press Releases Appendix PD-5
    Compensation CP
    Certificate of Compensation Appendix CP 1A
    Customer Acknowledgement and Waiver Appendix CP 1B
    Resolution No. [23] of 2009 in respect of Definition of Deposit Appendix CP 2

     

    • Glossary of Defined Terms

      • Glossary History

        Version Date Description of Changes
        July 2004 Initial Launch Version.
        July 2006 Updated version, including new defined terms of retail bank and wholesale bank license sub-categories, and definitions of regulated banking services.
        April 2010 Updated Definition of Deposit in accordance with Resolution No. (23) of 2009 in respect of Definition of Deposit.
        October 2010 Amended definition for Chief Executive Officer; added definition of Executive director, Independent director; Non-executive director; Remuneration, and; senior manager/management.
        January 2011 Minor corrections and amendments for consistency purposes; Amended definition for approved person(s), collective investment undertaking, exposure(s), security(ies);
        Added definition for accredited investor(s), acquisition(s), bond(s); capital instrument(s), close links, connected person(s), future(s), investment(s), investment analyst, investment research, licensed exchange(s); market, option(s), participant(s), personal account transaction, public offering(s), qualifying holding(s), real time promotion, retail customer(s), self-regulatory organisation(s) or SROs, soft dollar agreement, swap(s), warrants;
        Deleted definition of independent non-executive director.
        April 2011 Amended definition of executive director.
        October 2011 Clarified definition of independent director;
        Added definition for appointed expert(s), qualified by exception.
        Amended definition of trilateral meeting.
        January 2012 Amended definition of independent director.
        Added definition for underwriting.
        April 2012 Corrected cross reference for the definition of director;
        Corrected typo in the definition of conflict of interest;
        Updated definition of qualifying holdings to be in line with Module CM.
        July 2012 Added definition for Bahrain domiciled CIU(s);
        Amended definition of controller to be in line with Module GR.
        October 2012 Added definition for conspicuous notice, eligible account(s), eligible depositor(s), framework, principal, transferee and transferor.
        Amended definition of Basel Committee and deposit(s) or deposit account(s).
        January 2013 Added definition for financial services.
        Amended definition of deposit-taking, providing credit, public offering(s).
        October 2013 Updated definition of controllers to be in line with Module GR.
        January 2014 Added definition for clawback, malus, material risk-takers.
        Amended definition of remuneration.
        July 2014 Amended definition for clawback.
        October 2014 Amended definition of Authorised money or value transfer service provider(s).
        Amended definition for financial instruments trader.
        Corrected cross reference for relevant authorities.
        January 2015 Added definition of affiliate, banking group, credit risk, financial entity, market risk, minority interest, operational risk, securities financing transactions, subsidiary and trigger event.
        Amended definition for control and price risk.
        Corrected cross reference for acquisition(s).
        April 2015 Amended definition of overseas conventional retail bank licensee(s) and subsidiary(ies).
        Deleted the definition of head of function and qualifying holding(s).
        January 2016 Amended the definition of approved person(s).
        April 2016 Added definition for disabled customer(s).
        Amended the definition of controlled function(s).
        July 2016 Amended definition of Politically Exposed Persons (PEPs).
        October 2016 Added definition of major investment.
        April 2017 Added definition of Bahraini retail bank licensee(s).
        April 2017 Added definition of Bahraini wholesale bank licensee(s).
        July 2017 Deleted Bahraini retail bank licensee(s).
        July 2017 Deleted Bahraini wholesale bank licensee(s).
        July 2017 Added definition of branches of foreign bank licensee(s).
        July 2017 Added definition of conventional retail bank licensee(s).
        July 2017 Added definition of conventional wholesale bank licensee(s).
        July 2017 Added definition of country risk.
        July 2017 Deleted definition of overseas conventional bank licensee(s).
        July 2017 Deleted definition of overseas conventional retail bank licensee(s).
        July 2017 Added definition of transfer risk.
        July 2017 Deleted the definition of wholesale banks.
        October 2017 Added definition of beneficial owner.
        October 2018 Added definitions of Module LM.
        December 2018 Added definitions of Account Information Service, Account Information Service Provider 'AISPs', Originator Information, Payment Initiation Service, Payment Initiation Service Provider 'PISPs'.
        December 2018 Amended definition of Ancillary Service Provider.
        April 2019 Definition of Digital Financial Advice.
        October 2019 Added definition of without delay.
        July 2020 Amended definition of Independent Director.
        October 2020 Amended definition of accredited investor(s).
        October 2020 Added point (f) to definition of Independent Director.
        January 2021 Deleted definition of Framework (as used in Module OM).

      • [ A ]

        • Accepting Shari'a money placements

          The acceptance of sums of money for safe-keeping ('al-wadia') in a Shari'a compliant framework, under which it will be repaid, either on demand or in circumstances agreed by the parties involved, and which is not referable to the giving of security.

        • Account Information Service

          An 'account information service' is an online service which provides consolidated information to a payment service user on one or more payment accounts held by that payment service user with other account servicing payment service provider.

          Added: December 2018

        • Account Information Service Provider or AISP(s)

          A person licensed by the CBB to undertake the activity of providing account information services online.

          Added: December 2018

        • Accredited investor(s)

          Accredited investors are defined as investors meeting the following criteria:

          (a) Individuals holding financial assets (either singly or jointly with their spouse) of USD 1,000,000 or more, excluding principal place of residence;
          (b) Companies, partnerships, trusts or other commercial undertakings, which have financial assets available for investment of not less than USD 1,000,000; or
          (c) Governments, supranational organisations, central banks or other national monetary authorities, and state organisations whose main activity is to invest in financial instruments (such as state pension funds).
          Amended: October 2020
          Added: January 2011

        • Acquisition(s)

          The acquiring by a bank of beneficial or legal ownership of capital instruments issued by another entity. This would not include securities underwriting until the expiry of the underwriting period (where separate arrangements apply elsewhere in Module CM). Acquisition may also be in the form of exercising of rights to take control of capital instruments pledged as collateral. The pledging of capital instruments by a customer to a bank as collateral (e.g. for the purpose of obtaining credit) does not in itself mean that an "acquisition" has taken place. Acquisition also does not include the establishment of new subsidiaries by the bank. Regulatory requirements for the establishment of SPVs and subsidiaries are contained in Chapter CA-5.2.

          Amended: January 2015
          Added: January 2011

        • Administrators

          Persons who administer financial instruments and related services such as cash/collateral management. Such persons need to be registered by the BMA/CBB (cf. Volume 4, AU-1.3.2).

        • Affiliate

          An affiliate of a bank is defined as a company that controls, or is controlled by, or is under common control with, the bank. Control has the same meaning as when used in IFRS.

          Added: January 2015

        • Agency based contract for investments

          Holders of investment accounts appoint the Islamic bank to invest their funds on the basis of an agency contract in return for a specified fee or a specified fee and share of the profit if the realised profit exceeds a certain level, the latter being an incentive for the Islamic bank to achieve a return higher than expected.

        • AML

          Anti-Money Laundering

        • Ancillary service provider

          A person licensed under Volume 5 of the CBB Rulebook to undertake regulated ancillary services. These licensees are referred to as 'financial sector support institutions' under Article 1 of the CBB Law.

          Amended: December 2018

        • Appointed expert(s)

          A duly qualified individual or firm appointed by the CBB to carry out inspections in accordance with Article 114 of the CBB Law or special investigations of licensees in accordance with Article 121 of the CBB Law. Appointed experts may be appointed in addition to the CBB's own officials. Examples of appointed experts include reporting accountants, lawyers, private investigators, expert witnesses and independent actuaries.

          Added: October 2011

        • Approved person(s)

          Persons undertaking certain functions in relation to CBB licensees require prior CBB approval. These functions (called controlled functions) include board members and those occupying executive positions. The controlled functions regime supplements the licensing regime by ensuring that key persons involved in the running of licensees are fit and proper. Those authorised by the CBB to undertake controlled functions are called approved persons (see Paragraph LR-1A.1.2).

          Amended: January 2016
          Amended: January 2011

        • Articles of association

          Legal document establishing a corporation, outlining its structure and purpose.

        • Asset revaluation reserves

          An asset revaluation reserve is an accounting concept and represents a reassessment of the value of a capital asset as at a particular date.

        • Associate(d)

          A company or other enterprise, which is not a subsidiary or joint venture, over which the bank licensee has significant influence. Significant influence means the power to participate in financial and operating policy decisions. Such influence is presumed to exist if the bank licensee owns more than 20 percent of the associate.

        • Auditor

          The firm/partnership charged with carrying out the audit of a licensee and its partners, directors and managers (see Module AU).

        • Authorised Money or Value Transfer Service (MVTS) Provider(s)

          Any bank or other licensee (such as a money changer) specifically authorised to effect money or value transfers.

          Amended: October 2014

      • [ B ]

        • Bahrain domiciled CIU(s)

          Bahrain domiciled CIUs are undertakings where:

          (a) The legal form of the CIU is established under the laws of the Kingdom of Bahrain; and
          (b) The CIU documents and contractual agreements are governed by the Laws of the Kingdom of Bahrain.
          Added: July 2012

        • Bahraini Conventional bank licensee(s)

          As defined in LR-A.1.8.

        • Bahraini Conventional retail banks

          Banks which undertake the regulated banking services of (a) to (n) in Paragraph LR-1.3.1 for both residents and non-residents of the Kingdom of Bahrain.

          Added: July 2017

        • Bahraini retail bank licensee(s)

          [Deleted in July 2017]

          Deleted: July 2017
          Added: April 2017

        • Bahraini Conventional wholesale banks

          Banks which undertake the regulated banking services of (a) to (n) in Paragraph LR-1.3.1 for both residents and non-residents of the Kingdom of Bahrain, with certain restrictions for residents as defined under Paragraphs LR-1.2.13, LR-1.2.16 and LR-1.2.19.

          Added: July 2017

        • Bahraini wholesale bank licensee(s)

          [Deleted in July 2017]

          Deleted: July 2017
          Added: April 2017

        • Bahraini conventional retail bank licensee

          A Bahraini conventional bank licensee, licensed as a retail bank (see Volume 1, Section LR-1.2)

        • Bahraini conventional wholesale bank licensee

          A Bahraini conventional bank licensee, licensed as a wholesale bank (see Volume 1, Section LR-1.2.)

        • Bank

          Any bank fully recognized as such by the relevant regulator of the country in which it is registered, except such a bank which:

          a. In the opinion of the central bank, is not adequately supervised by the relevant banking supervisory authority;
          b. The license or other authorization of which to carry on banking business is, for the time being, suspended.
          Added: October 2018

        • Banking group

          Groups that engage predominantly in banking activities and are registered as banks in the relevant jurisdiction.

          Amended: October 2018
          Added: January 2015

        • Base rate

          The interest rate that underpins lending to bank customers. Banks lend to their customers at basis points over base rates. Not to be confused with prime rate which is the rate at which a bank will lend to its most creditworthy customers.

        • Basel Capital Accord

          Issued initially in July 1988 by the Basel Committee on Banking Supervision, the Basel Capital Adequacy Accord is a risk based capital adequacy methodology that defines the components of capital and applies a series of risk weights and capital charges to banks' assets and holdings of financial instruments. The Accord aims to increase the stability of the international financial system through having a single internationally acknowledged measurement of a bank's capital expressed as a percentage of its financial risks. It also serves to put internationally active banks on an equal competitive footing in respect of the measurement of their capital adequacy.

        • Basel Committee

          The Basel Committee was founded in 1974 by the Bank for International Settlements (BIS). It provides a forum for regular cooperation on banking supervisory matters. Its objective is to enhance understanding of key supervisory issues and improve the quality of banking supervision worldwide. It seeks to do so by exchanging information on national supervisory issues, approaches and techniques, with a view to promote common understanding.

          Amended: October 2012

        • Beneficial Owner

          Refers to the natural person(s) who ultimately owns or controls a customer and/or the natural person on whose behalf a transaction is being conducted. It also includes those persons who exercise ultimate effective control over a legal person or arrangement. This definition should also apply to "Ultimate beneficial ownership".

          Added: October 2017

        • Branch

          A place of business which forms a legally dependent part of a bank and which carries out directly all or some of the transactions inherent in the business of the relevant bank. Conventional bank licensees operating as a branch are called overseas conventional bank licensees for the purposes of Volume 1 (see LR-A.1.8).

        • Branches of foreign bank licensees

          Foreign banks branches operating in the Kingdom of Bahrain.

          Added: July 2017

        • Bonds

          An instrument creating or acknowledging a present or future indebtedness (i.e. debentures, debenture stock, loan stock, bonds, certificates of deposit and any other instruments creating or acknowledging a present or future indebtedness), but excluding:

          (a) An instrument creating or acknowledging indebtedness for, or for money borrowed to defray, the consideration payable under a contract for the supply of goods and services;
          (b) A cheque or other bill of exchange, a bankers draft or a letter of credit (but not a bill of exchange accepted by a banker);
          (c) A banknote, a statement showing a balance on a bank account, or a lease or other disposition of property; and
          (d) A contract of insurance.
          Amended: January 2011

      • [ C ]

        • Capital adequacy

          A measure of the financial strength of a bank or securities firm, usually expressed as a percentage ratio of its capital to its assets.

        • Capital instrument(s)

          This includes all components of equity capital including ordinary equity, both voting and non-voting, and preference shares. It also includes convertible or hybrid financial instruments which are debt-like in character and which may be converted into equity. Also for financial institutions and insurance companies, any other financial instruments (such as subordinated debt) which are eligible as regulatory capital should also be included as capital instruments. Sukuk or senior debt instruments would not normally be regarded as "capital instruments" unless they have convertibility features. Equity-like contracts such as joint venture musharaka contracts (investments but not financing) are also included in this definition. The musharaka stake is classified as a capital instrument at onset. Shari'a compliant investment notes would be considered capital instruments if convertibility option/clause is available.

          Added: January 2011

        • Capital redemption reserves

          Where shares of a company are redeemed or purchased wholly out of the company's profits, or by a fresh issue, the amount by which the company's issued share capital is diminished on cancellation of the shares shall be transferred to this reserve.

        • Central Counterparty (CCP)

          The party that intermediates in the settlement process between counterparties to contracts related to financial instruments, becoming the buyer to every seller, and the seller to every buyer in the market.

          Added: October 2018

        • Certificate of commercial registration

          A certificate issued by the Ministry of Commerce to businesses for carrying out specified activities as legal entities in the Kingdom of Bahrain.

        • Certificate of deposits

          This is a certificate issued by a bank or thrift that indicates a specified sum of money has been deposited with it for a specified period at a defined rate. A CD shows a maturity date and a specified interest rate, and can be issued in any denomination. The duration can be up to five years.

        • Certificate of incorporation

          A document granted by the Ministry of Commerce giving an entity its legal existence and right to function as an entity.

        • Certificates representing certain securities

          Certificates or other instruments which confer contractual or property rights:

          (a) in respect of any investment held by someone other than the person on whom the rights are conferred by the certificate or other instrument; and
          (b) the transfer of which may be effected without requiring the consent of that person.

        • CFT

          Combating the financing of terrorism.

        • Chief Executive, Chief Executive Officer or CEO

          Chief executive, chief executive officer or CEO. The board shall determine that person's actual title, which may be 'CEO', 'Chief Executive Officer', 'President', 'Managing Director', or another title.

        • Clawback

          A clawback requires that an employee (or ex-employee) return to the bank the variable remuneration that was previously paid out to him/her.

          Amended: July 2014
          Added: January 2014

        • Close links

          A bank is defined as "closely linked" with:

          (a) Any person/entity which qualifies as a "controller" of the concerned bank as defined in Module GR-5 of the Rulebook;
          (b) Any entity which is a subsidiary of the bank;
          (c) Any entity which is an associate company of the bank.
          Added: January 2011

        • Collateral

          Any form of property, security, guarantee or indemnity provided as security for a borrower.

        • Collective Investment Undertaking

          As defined in LR-1.3.34.

          Amended: January 2011

        • Commodity(ies)

          Raw materials or primary products, usually sold in bulk on an exchange (other than a financial instrument or cash) which are capable of delivery. Gold is therefore a commodity, but a gold ring or a gold future is not.

          Amended: January 2015

        • Compliance Directorate

          The unit within the Agency responsible for verifying licensees' compliance with the requirements of the BMA Law, the AML Law, this Module and other BMA/CBB Regulations relating to terrorist financing and money laundering, and for collating and monitoring suspicious transaction reports from licensees.

        • Conflict of interest

          A situation when a person or an entity has competing professional or personal obligations to other parties in a financial transaction (e.g. underwriting a securities transaction and simultaneously advising clients whether to buy the security or not) or in ongoing financial relationships (e.g. when a bank has a director of one of its major borrowers on its board), or personal or financial interests that would make it difficult to fulfil his duties fairly.

        • Connected person(s)

          (a) The individual's spouse and his/her son, adopted son, stepson, daughter, adopted daughter, step-daughter, father, step-father, mother, step-mother, brother, step-brother, sister or step-sister, under his/her guardianship or control; or
          (b) A firm or corporation in which the individual or any persons mentioned in (a) has control of not less than 10% of the voting power in the firm or corporation, whether such control is exercised individually or jointly; or
          (c) Connected persons in relation to a firm or corporation means another firm or corporation in which the first-mentioned firm or corporation has control of not less than 10% of the voting power in that other firm or corporation.
          Amended: October 2012
          Added: January 2011

        • Conspicuous notice

          Means a written statement in both Arabic and English languages which is easily visible and legible and displayed in all credit institutions' premises open to the public, such as websites, newspapers and other press notices.

          Added: October 2012

        • Contingency plans

          A plan maintained to ensure the availability of critical resources and to facilitate the continuity of operations in an emergency situation.

        • Contingent liabilities

          In context of liabilities, those liabilities that do not yet appear on the balance sheet (ie. guarantees, supports, lawsuit settlements). For support or recourse, the trigger may occur at any time in the future, and the loss or expenditure is highly uncertain. Once timing and the quantification of expenditure becomes clearer, provisions should be raised in respect of the contingent liability. When the amount or the timing of the contingent item becomes certain, then it ceases to be a contingent item and should be entered into the balance sheet.

        • Control

          Has the same meaning as when used in IFRS.

          Amended: January 2015

        • Control environment

          The control environment means the overall attitude, awareness and actions of directors and management regarding the internal control system and its importance in the entity.

        • Controlled function(s)

          Functions of board members and those persons undertaking executive positions at CBB conventional bank licensees (see LR-1A.1.2).

          Amended: April 2016
          Amended: January 2011

        • Controller

          A controller is a natural or legal person who either alone, or with his associates:

          (a) Holds 10% or more of the shares in the licensee ("L"), or is able to exercise (or control the exercise) of 10% or more of the voting power in L; or
          (b) Holds 10% or more of the shares in a parent undertaking ("P") of L, or is able to exercise (or control the exercise) of 10% or more of the voting power in P; or
          (c) Is able to exercise significant influence over the management of L or P.
          Amended: October 2013
          Amended: July 2012
          Amended: January 2011

        • Conventional bank license

          A license issued under Volume 1 of the CBB Rulebook.

        • Conventional bank licensee

          A bank licensed by the BMA/CBB under Volume 1 of the BMA/CBB Rulebook, and generally operating according to conventional finance principals (as opposed to operating in accordance with Islamic finance principles).

        • Conventional retail banks licensees(s)

          Banks which undertake the regulated banking services of (a) to (n) in Paragraph LR-1.3.1 for both residents and non-residents of the Kingdom of Bahrain.

          Added: July 2017

        • Conventional wholesale banks licensees(s)

          Banks which undertake the regulated banking services of (a) to (n) in Paragraph LR-1.3.1 for both residents and non-residents of the Kingdom of Bahrain, with certain restrictions for residents as defined under Paragraphs LR-1.2.13, LR-1.2.16 and LR-1.2.19.

          Added: July 2017

        • Conventional retail bank licensee

          Conventional bank licensees which undertake the regulated banking services of in Paragraph LR-1.3.1 for both residents and non-residents of the Kingdom of Bahrain.

          Amended: December 2018

        • Conventional wholesale bank licensee

          A conventional bank licensee, licensed as a wholesale bank (see Volume 1, Section LR-1.2)

        • Correspondent Bank

          A bank which offers another bank (the respondent bank) an account through which the respondent bank may make payments for its own account and that of its clients. In brief, the correspondent bank acts as agent for the respondent bank. Correspondent relationships do not include transactions between banks as principals (e.g. in the wholesale market).

        • Counterparty

          A counterparty is the other person in a contract. Therefore, if bank A buys a security issued by company B from broker C, bank A has counterparty risk to broker C and Issuer Risk in respect of company B. A counterparty may include any legal person or arrangement, but generally would mean the following:

          (a) Any individual;
          (b) Any unincorporated body of persons;
          (c) Any company which is not a member of a group;
          (d) Any group of companies; or
          (e) Any government of a State or any public bodies, local authorities or nationalised industries of a State.
          Amended: January 2011

        • Country Risk

          The risk of exposure to loss caused by events in a foreign country. The concept is broader than sovereign risk as all forms of lending or investment activity whether to/with individuals, corporates, banks or governments are covered.

          Added: July 2017

        • Credit derivatives

          The OTC derivatives instruments for the transfer of credit risk.

        • Credit risk

          Is defined as the potential that a bank's borrower or counterparty will fail to meet its obligations in accordance with agreed terms. Credit risk exists throughout the activities of a bank in the banking book and in the trading book and includes on- and off-balance sheet exposures.

          Added: January 2015

        • Custody

          In relation to clients' assets, this refers to the safeguarding and administering of a client's investments.

        • Customer

          A customer is:

          Groups or individuals who have a business relationship with the organization — those who receive and use or are directly affected by the products and services of the organization.

      • [ D ]

        • Dealing in financial instruments as agent

          Dealing in financial instruments as agent means buying, selling, subscribing for or underwriting any financial instrument on behalf of a client (see LR-1.3.25 ff).

        • Dealing in financial instruments as principal

          Dealing in financial instruments as principal means buying, selling, subscribing for or underwriting any financial instrument on one's own account (see LR-1.3.22 ff).

        • Default

          Failure to service a credit in accordance with agreed terms, e.g. late or incomplete payments of principal or interest, or infringement of any other material provision of the credit documentation.

        • Default Funds

          Also known as clearing deposits or guarantee fund contributions (or any other names), are clearing members' funded or unfunded contributions towards, or underwriting of, a CCP's mutualized loss-sharing arrangements.

          Added: October 2018

        • Deposit(s) or deposit account(s)

          For the purposes of the CBB Law, refer to Resolution No. (23) of 2009 in respect of Definition of Deposit (see Appendix CP-2).

          Amended: October 2012

        • Deposit-taking

          The activity of accepting deposits (see LR-1.3.16).

          Amended: January 2013

        • Derivative(s)

          A generic term for a financial instrument whose value is dependent on, or derived from, the changes in the absolute or relative value of some underlying asset or market index or rate. Often used for futures, options and swaps.

          Amended: January 2015

        • Derivative contracts relating to commodities settled in cash

          Options, futures, swaps, forward rate agreements and any other derivative contracts relating to commodities that must be settled in cash at the option of one of the parties (otherwise than by reason of a default or other termination event).

        • Derivative contracts relating to commodities that can be physically settled

          Options, futures, swaps, and any other derivative contract relating to commodities that can be physically settled provided that they are traded on a regulated market and/or an MTF.

        • Designated market

          Any of the following investment exchanges:

          •  American Stock Exchange
          •  Australian Stock Exchange
          •  Bolsa Mexicana de Valores
          •  Bourse de Montreal Inc
          •  Channel Islands Stock Exchange
          •  Chicago Board of Trade
          •  Chicago Board Options Exchange
          •  Chicago Stock Exchange
          •  Coffee, Sugar and Cocoa Exchange, Inc
          •  Euronext Amsterdam Commodities Market
          •  Hong Kong Exchanges and Clearing Limited
          •  International Securities Market Association
          •  Johannesburg Stock Exchange
          •  Kansas City Board of Trade
          •  Korea Stock Exchange
          •  MidAmerica Commodity Exchange
          •  Minneapolis Grain Exchange
          •  New York Cotton Exchange
          •  New York Futures Exchange
          •  New York Stock Exchange
          •  New Zealand Stock Exchange
          •  Osaka Securities Exchange
          •  Pacific Exchange
          •  Philadelphia Stock Exchange
          •  Singapore Exchange Market
          •  South African Futures Exchange
          •  Tokyo International Financial Futures Exchange
          •  Tokyo Stock Exchange
          •  Toronto Stock Exchange

        • Digital Financial Advice

          Digital financial advice, also commonly known as robo-advice or automated advice is the advising on financial instruments as defined under LR-1.3.48 using algorithms and technology and with limited or no human financial advisor involvement.

          Added: April 2019

        • Director

          A person who acts in the capacity of director of a firm (whether appointed or not, or whether titled director or not). In the case of a sole trader, unincorporated body or partnership, a person directing its affairs, or a partner (of a partnership). Directors are a controlled function (cf. LR-1A.1.2).

          Amended: April 2012

        • Disabled customer(s)

          For the purpose of Module BC 'disabled' means: all those who suffer from permanent total or partial physical or sensory impairments as a result of illness, accident, congenital or hereditary factor that may prevent them from accessing banking and financial services on an equal basis with others. These are the customers who have the ability to make their own decisions but need assistance to do so, due to their circumstances. The term 'disabled' includes visual impairments and hearing impairments and physical impairments.

          People who have limited ability to take their own decisions (mental impairment) do not fall within this definition.

          Added: April 2016

      • [ E ]

        • Effective interest rates

          The annual rate at which an investment grows in value when interest is credited more often than once a year.

        • Electronic banking

          Electronic banking or 'e-banking' refers to the provision of retail and small value banking products and services through electronic channels. Such products and services can include deposit-taking, lending, account management, the provision of financial advice, electronic bill payment, and the provision of other electronic payment products and services such as electronic money.

        • Electronic money

          The investment, which is monetary value, as represented by a claim on the issuer, which is:

          (a) Stored on an electronic device;
          (b) Issued on receipt of funds; and
          (c) Accepted as a means of payment by persons other than the issuer.
          Amended: January 2011

        • Eligible Account(s)

          Means any Deposit Account (being a deposit in accordance with the Central Bank of Bahrain Resolution No.(23) of 2009 in respect of Definition of Deposit), and any other deposits or accounts similar in nature and which have similar characteristics which are approved by the CBB, regardless of currency, with the exception of bearer certificates of deposit.

          Added: October 2012

        • Eligible depositor(s)

          Means any natural person, (resident or non-resident), holding an Eligible Account(s) with a conventional retail bank in the Kingdom. It does not include Deposits and Unrestricted Investments Accounts held with a conventional retail bank's foreign branches operating outside the Kingdom.

          Added: October 2012

        • Executive director

          Means a director who is an officer or employee, or is otherwise involved in day-to-day management, of either:

          (a) The bank;
          (b) Another company which is a controller of the bank;
          (c) Another company of which the bank is a controller; or
          (d) Another company which is controlled by a controller of the bank.

          In this definition, the word "company" which is a controller of the bank excludes sovereigns such as government owned entities and government ministries.

          Amended: April 2011

        • Exposure(s)

          The components of an "Exposure" are outlined in more detail in Module CM-5.3. In summary, an exposure is the maximum loss which the firm might suffer if:

          (a) A counterparty or a group of connected counterparties fail to meet their obligations; or
          (b) It realises assets or off-balance sheet positions.
          Amended: January 2015
          Added: January 2011

      • [ F ]

        • Face value (see Murabaha)

          The amount of a Murabaha receivable based on the price agreed between the client and the Islamic bank including the latter's profit on the transaction.

        • Family

          The term family refers to father, mother, husband, wife, son, daughter, grandfather, grandmother, grandson or granddaughter.

        • FATF Member State

          A country which is a current member of the FATF, and which is not subject to NCCT listing or to any advisories by the FATF.

        • Fiduciary

          A legal entity that is authorised to manage assets on behalf of a third party. Fiduciaries include asset management entities such as pension funds and other collective investment vehicles.

          Added: October 2018

        • Financial Action Task Force (FATF)

          The inter-governmental body responsible for developing and promoting policies, both nationally and internationally, to combat money laundering.

        • Financial contracts for differences

          Comprise rights under a contract for differences, or any other contract the purpose or pretended purpose of which is to secure a profit or avoid a loss by reference to fluctuations in:

          (a) The value or price of investment or property of any description;
          (b) Any currency;
          (c) The rate of interest in any currency or any index of such rates including interest rate options;
          (d) The level of any index which is derived for the prices of an investment or physical commodity (including index options) or;
          (e) Any combination of the above.
          Amended: January 2011

        • Financial entity(ies)

          An entity which conducts banking activities or other financial activities such as insurance, finance leasing, issuing credit cards, portfolio management, investment advisory, money changing, factoring, forfaiting, custodial and safekeeping services, investment management and other similar activities that are ancillary to the business of banking, whether or not the entity is regulated. For the sake of clarification, special purpose vehicles are included in the definition of financial entity if such SPVs conduct any of the activities outlined above.

          Added: January 2015

        • Financial Institutions

          Institutions defined as financial institutions by the CBB (local financial institutions) or by foreign banking regulators (foreign financial institutions); examples of financial institutions include investment companies, insurance companies and currency exchange companies.

          Added: October 2018

        • Financial instruments

          Any of the following instruments:

          (a) Transferable securities;
          (b) Islamic financial instruments;
          (c) Money market instruments;
          (d) Units in collective investment undertakings;
          (e) Derivative contracts other than commodity derivatives;
          (f) Derivative contracts relating to commodities settled in cash;
          (g) Derivative contracts relating to commodities;
          (h) Credit derivatives;
          (i) Financial contracts for differences;
          (j) Other derivative contracts;
          (k) Interests in real estate property;
          (l) Certificates representing certain securities; and
          (m) Rights or Interests in Financial Instruments.
          Amended: January 2011

        • Financial Instruments Trader

          A person who is engaged in buying or selling financial instruments.

          Amended: October 2014
          Amended: January 2011

        • Financial services (as used in Module LR)

          For the purpose of Module LR, financial services means:

          (a) Any dealings in any instrument defined as a financial instrument in any Volume of the CBB Rulebook;
          (b) Any arrangement where money, goods or services are made available to a person in exchange for his promise to pay at a later date and that arrangement is of a type habitually provided by another person for commercial gain;
          (c) Any arrangement in which money is solicited from the public in return for a promise of financial gain on, or safekeeping of, that money; or
          (d) Any product or other financial services in the area of regulated services (regulated by the CBB) marketed in the Kingdom of Bahrain.
          Added: January 2013

        • Framework (as used in Module OM)

          Deleted in January 2021.

          Amended: January 2021
          Added: October 2012

        • Future(s)

          Rights under a contract for the sale of a commodity or property of any other description under which delivery is to be made at a future date and at a price agreed on when the contract is made.

          Amended: January 2011

      • [ G ]

        • General Manager

          The General Manager (of a firm whether incorporated in Bahrain or not) means a person who (regardless of actual title) is responsible, alone or jointly, for the conduct of the whole of the firm, or in the case of an overseas licensee, for all the activities of the branch. Equivalent to Chief Executive in the case of firms incorporated in Bahrain (cf. HC-2).

        • Going concern

          The idea that a company will continue to operate indefinitely, and will not go out of business and liquidate its assets.

      • [ H ]

        • Head of function

          [Deleted in April 2015.]

          Deleted: April 2015
          Amended: January 2011

        • Hedging

          A strategy designed to reduce investment risk using call options, put options, short-selling, or futures contracts. A hedge can help lock in profits. Its purpose is to reduce the volatility of a portfolio by reducing the risk of loss.

        • High-Quality Liquid Asset ('HQLA')

          An asset is considered to be HQLA if it can be easily and immediately converted into cash at little or no loss of value under stress scenarios.

          Added: October 2018

        • Home Supervisor

          The competent regulatory authority in which the parent of a conventional bank licensee is incorporated, or in which the head office of a branch is incorporated.

        • Homogeneous loans

          Loan facilities bearing similar attributes.

        • Host Regulator/Supervisor

          The competent authority in which a branch of a foreign bank licensee is located or in which a subsidiary or joint venture of a foreign parent bank licensee is incorporated.

        • Hybrid instruments

          A package of two or more different kinds of risk management instruments that are usually interactive.

      • [ I ]

        • Independent director

          Determination by the Board. Under Module HC an 'independent director' is a director whom the board has specifically determined has no material relationship which could affect his independence of judgment, taking into account all known facts. The board should consider that, although a particular director meets the formal requirements, he may not be independent owing to specific circumstances of the person or the bank, ownership structure of the bank, or for any other reason. The board's determination should be a good faith finding after diligent review and full discussion.

          Formal Requirements. 'Independent director' means a director of the bank who, or whose family shareholders either separately or together with him or each other, does not have any material pecuniary relationships or transactions with the bank (not counting director's remuneration for this purpose) and in particular who, during the one year preceding the time in question met all the following conditions:

          (a) Was not an employee of the company;
          (b) Did not:
          (i) Make to, or receive from, the bank payments of more than 31,000 BD or equivalent (not counting director's remuneration);
          (ii) Own more than a 10% share or other ownership interest, directly or indirectly, in an entity that made to or received from the bank payments of more than such amount;
          (iii) Act as a general partner, manager, director or officer of a partnership or company that made to or received from the bank payments of more than such amount;
          (iv) Have any significant contractual or business relationship with the bank which could be seen to materially interfere with the person's capacity to act in an independent manner,
          (c) Did not own directly or indirectly (including for this purpose ownership by any family member or related person) 5% or more of the shares of any type or class of the bank;
          (d) Was not engaged directly or indirectly as an auditor or professional advisor for the bank;
          (e) Was not an associate of a Director or a member of senior management of the bank; and
          (f) Was not an associate of a Director, member of senior management or board member of the Bank’s controller.

          For purposes of this definition, the 'payments' referred to in paragraph (b)(i), (b)(ii) and (b)(iii) do not include monies received from dividends, deposits, investments and credit facilities arising from the bank's normal business activities, but instead ordinarily refer to monies received (and/or payable during the period in question) for services rendered to the bank by the director or company concerned, or paid (or payable) by the concerned director or company to the bank for services provided by the bank. The CBB may in its absolute discretion vary any such requirement (and/or restrictive effect thereof) in writing on a case-by-case basis.

          Dividends, deposits, investment accounts and credit facilities are to be considered under item (b)(iv) of this definition.

          For the purpose of the definition of "independent director":

          (a) Where the term "family" or "family member or related persons" is used reference is made to: spouse, father, mother, son(s) or daughter(s); and
          (b) Where the term "associate" is used reference is made to:
          (i) Spouse, father, mother, son(s) or daughter(s); or
          (ii) A person who is an employee or partner of the Director or of the firm represented or owned by the Director.
          Amended: October 2020
          Amended: July 2020
          Amended: January 2012
          Amended: October 2011
          Amended: January 2011

        • Independent non-executive director

          [deleted 01/2011]

        • Initial Margin

          A clearing member or client funded collateral posted to the CCP to mitigate the potential future exposure of the CCP to the clearing member, arising from the possible future change in the value of the transactions.

          Added: October 2018

        • Insider trading

          The activity which is in summary:

          (a) The offence of which an individual is guilty if he has information as an insider and:
          (i) In the circumstances described in (b), he deals in securities that are price-affected securities in relation to the information; or
          (ii)  (A) he encourages another person to deal in securities that are (whether or not that other knows it) price affected securities in relation to the information, knowing or having reasonable cause to believe that the dealing would take place in the circumstances mentioned in (b); or (B) he discloses the information, otherwise than in the proper performance of the functions of his employment, office or profession, to another person; and
          (b) The circumstances referred to in (a) are that the acquisition or disposal in question occurs on a regulated market, or that the person dealing relies on a professional intermediary or is himself acting as a professional intermediary.
          Amended: January 2011

        • Insurance licensee

          A person licensed under Volume 3 of the BMA/CBB Rulebook.

        • Interests in real estate property

          Any financial instrument giving right to or interests in real estate property other than owner occupied properties.

          Amended: January 2011

        • Intermediary

          A person who in the course of any business or profession invites other persons to make offers or proposals or to take other steps with a view to entering into contracts of insurance, but not a person who publishes such invitations only on behalf of, or to the order of, some other person.

        • Intra-group outsourcing

          Intra-group outsourcing is an arrangement in which one company within a group of companies provides services for another company within the same group that could also be or usually have been provided in-house.

        • Investigator

          An Investigator is a person appointed by the CBB under the authority of Article 121 of the CBB Law to carry out an investigation of the business of a licensee or listed company.

          Added January 2009

        • Investment(s) (as referred to in Module CM)

          An investment is any holding by a bank of capital instruments issued by a third party that is not a subsidiary of the bank. Therefore holdings of subordinated debt eligible as regulatory capital issued by another financial institution would be regarded as an "investment". In this case "holding" means legal or beneficial ownership of capital instruments.

          Added: January 2011

        • Investment analyst (as referred to in Module BC)

          An employee of a conventional bank licensee who prepares investment research.

          Added: January 2011

        • Investment firm licensee

          A person licensed under Volume 4 of the CBB Rulebook.

          Amended: January 2011

        • Investment fund managers

          A commercial organisation that manages investors' money for a fee.

        • Investment research (as referred to in Module BC)

          A document (other than a recommendation made to an individual customer), distributed outside a conventional bank licensee, which contains one or more of the following:

          (a) The results of research into an individual financial instrument;
          (b) Analysis of factors likely to influence the future performance of an individual financial instrument or its issuer; and
          (c) Advice or recommendations based on those results or that analysis.
          Added: January 2011

        • Investment risk reserve

          Investment risk reserve is the amount appropriated by the Islamic bank out of the income of investment account holders, after allocating the mudarib share, in order to cater against future losses for investment account holders.

        • Islamic bank licensee

          A person licensed under Volume 2 of the BMA/CBB Rulebook.

        • Issued share capital

          Total amount of shares that have been issued.

      • [ J ]

        • Joint accounts

          An agreement between two or more firms to share risk and financing responsibility in purchasing or underwriting securities, or an account owned jointly by two or more persons at a bank or brokerage house.

      • [ L ]

        • Licensed exchange(s)

          "Licensed exchange" means an exchange licensed in respect of the operation of its market in and from the Kingdom of Bahrain.

          Added: January 2011

        • Licensees

          Any person licensed by the CBB under any of the Volumes of the CBB Rulebook.

        • Liquidation

          The process of terminating a bank's activities whereby all creditors are discharged either in full (a solvent liquidation), or in part (an insolvent liquidation) and any remaining funds are returned to the shareholders. This process normally takes place in accordance with the requirements of specific legislation in the country of incorporation. In Bahrain this includes the Bankruptcy and Preventative Settlements Act.

      • [ M ]

        • MDB

          A multilateral development bank, which refers to any bank or lending or development body established by agreement between, or guaranteed by, two or more countries, territories or international organizations, other than for purely commercial purposes.

          Added: October 2018

        • Major Investment

          A major investment is defined as any acquisition or investment in the capital instruments of another entity by a Bahraini conventional bank licensee which is equivalent to or more than 10% of the Bahraini conventional bank licensee's consolidated total capital.

          Added: October 2016

        • Malus

          A malus is a feature of a remuneration arrangement that reduces the amount of a deferred bonus, so that the amount of the payout is less than the amount of the bonus award.

          Added: January 2014

        • Managing financial instruments

          Managing financial instruments means managing on a discretionary basis financial instruments on behalf of another person (see LR-1.3.27).

        • Managing Shari'a profit/loss sharing investment accounts

          Managing a Shari'a profit sharing investment account means managing an account, portfolio or fund, whereby a sum of money is placed with the service provider on terms that a return will be made according to an agreed Shari'a compliant profit-sharing arrangement, based either on a mudaraba or musharaka partnership (see LR-1.3.21).

        • Market (as referred to in the definition of licensed exchange)

          "Market" means a place at which, or a facility (whether electronic or otherwise) by means of which, offers or invitations to sell, purchase or exchange securities or futures contracts (including options and derivatives) regularly made on a centralised basis, being offers or invitations that are intended or may reasonably be expected to result, whether directly or indirectly, in the acceptance or making, respectively, of offers to sell, purchase or exchange securities or futures contracts (whether through that place or facility or otherwise).

          Added: January 2011

        • Market risk

          The risk of losses in on- and off-balance sheet positions arising from movements in market prices. The risks that are subject to the market risk capital requirement are:

          (a) Equity position risk in the trading book (see Chapter CA-10);1
          (b) Interest rate risk in trading positions in financial instruments in the trading book (see Chapter CA-9);
          (c) Foreign exchange risk (see Chapter CA-11); and
          (d) Commodities risk (see Chapter CA-12).

          1 Equity positions in the banking book are dealt with under Paragraph CA-3.2.26.

          Added: January 2015

        • Material Risk-Takers

          The following table provides a non-exhaustive list of examples of key positions that should be considered as material risk-takers:

          High-level category Suggested business lines
          Heads of significant business lines and any individuals within their control who have a material impact of the bank's risk profile Fixed income
          Foreign exchange
          Commodities
          Securitisation
          Sales areas
          Investment banking
          Commercial banking
          Equities
          Structured finance
          Lending
          Trading areas

          Banks should consider how the examples in the above table apply in relation to their own organisational structure.

          Added: January 2014

        • Memorandum of association

          The Memorandum of Association is the first constitutional document of a company containing fundamentals such as the name, the company's objects and powers, and its original share capital.

        • Mind and Management

          The presence of persons with executive authority to act on behalf of the bank and who have knowledge of the customers of the bank and their business, and the business of the bank where it acts as principal.

        • Minority interest

          Has the same meaning as used in IFRS.

          Added: January 2015

        • MLRO

          Money Laundering Reporting Officer of each bank as more particularly described in Chapter FC-4.

        • Money Laundering

          Means the activity constituting a criminal offence pursuant to Article 2 of the AML Decree Law No. 4 dated 29th January 2001 (see Appendix FC-1). More generally, money laundering refers to the process of hiding or disguising the true origin or ownership of the proceeds of criminal activities.

        • Money-market instruments

          Those classes of instruments which are normally dealt in on the money market, such as treasury bills, certificates of deposit and commercial papers and excluding instruments of payment.

      • [ N ]

        • NIM

          Net Interest Margin.

        • Name lending

          Lending on the basis of personal relationships rather than financial fundamentals.

        • Non-executive director

          Means any director who is not an executive director.

      • [ O ]

        • Offering Shari'a Financing Contracts

          Entering into, or making arrangements for another person to enter into, a contract to provide finance in accordance with Shari'a principles, such as murabaha, bay muajjal, bay salam, ijara wa iktina and istisna'a contracts.

        • Off-balance Sheet ('OBS') Activities

          A banks' business that does not generally involve booking assets or liabilities. Examples include the granting of standby commitments, letters of credit and guarantees.

          Added: October 2018

        • Off-site ATM

          Automated Teller Machine. An unattended electronic machine in a public place (other than the premises of the owning bank), connected to a data system and related equipment and activated by a bank customer to obtain cash withdrawals and other banking services.

        • Operating a collective investment undertaking

          Operating a collective investment undertaking means operating, establishing or winding up a Shari'a compliant CIU.

        • Operational Deposits

          The deposits generated by clearing, custody and cash management activities.

          Added: October 2018

        • Operational risk

          The risk of loss resulting from inadequate or failed internal processes, people and systems or from external events. This definition includes legal risk2, but excludes strategic and reputational risk.


          2 Legal risk includes, but is not limited to, exposure to fines, penalties, or punitive damages resulting from supervisory actions, as well as private settlements.

          Added: January 2015

        • Option(s)

          An option is a contract giving the buyer the right, but not the obligation, to buy or sell any of the following at a specific price on or before a certain date:

          (a) Currency of the Kingdom of Bahrain or any other country or territory;
          (b) Palladium, platinum, gold or silver; or other commodity;
          (c) Option to acquire or dispose of a financial instrument of the kind specified by this definition by virtue of the above.
          Amended: January 2011

        • Originator Information

          a) The name of the payer;
          b) The address of the payer; and
          c) The account number of the payer (where funds are being remitted from an account with your bank).
          Added: December 2018

        • Other derivative contracts

          Options, futures, swaps, forward rate agreements and any other derivative contracts relating to climatic variables, freight rates, emission allowances or inflation rates or other official economic statistics that must be settled in cash or may be settled in cash at the option of one of the parties (otherwise than by reason of a default or other termination event), as well as any other derivative contracts relating to assets, rights, obligations, indices and measures not otherwise mentioned in this Section, which have the characteristics of other derivative financial instruments, having regard to whether, inter alia, they are traded on a regulated market or an MTF, are cleared and settled through recognised clearing houses or are subject to regular margin calls.

        • Outsourcing

          The use of a person to provide customised services to a licensee other than (a) a member of a licensee's board acting in his capacity as such (b) an individual employed by a licensee under a contract of service or (c) a licensed insurance manager providing services to a captive insurance firm.

        • Outsourcing Provider

          The person providing the customised services as described in the definition of "outsourcing"

        • Overseas conventional bank licensees

          Deleted: July 2017

        • Overseas conventional retail bank licensee(s)

          Deleted: July 2017
          Amended: April 2015

        • Overseas conventional wholesale bank licensee

          An overseas conventional bank licensee, licensed as a wholesale bank (see Volume 1, Section LR-1.2)

        • Over the counter (OTC)

          A decentralised market (as opposed to an exchange market) where geographically dispersed dealers are linked by telephones and computer screens. OTC trades are more often than not, denominated in non-standard amounts and on non-standard terms (eg maturity outside IMM dates). The term may also refer to trading in securities not listed on a stock or bond exchange.

        • Over-the-Counter Option

          An option traded off-exchange, as opposed to a listed stock option. The OTC option has a direct link between buyer and seller, has no secondary market, and has no standardization of striking prices and expiration dates.

      • [ P ]

        • Parent or Parent Undertaking

          An undertaking or individual ("P"), which has the following relationship to another undertaking ("S"):

          (i) P holds (alone or, under an agreement with other shareholders) a majority of the voting rights in S;
          (ii) P (alone or in conjunction with its other subsidiary undertakings), has the right to appoint or remove a majority of its board of directors;
          (iii) P has the right to exercise a dominant influence over S, either through provisions contained in S's memorandum or articles, or a control contract; or
          (iv) P is a parent undertaking of a parent undertaking of S.

        • Participant(s)

          A (CIU) participant is a person with one or more holdings in a CIU.

          Added: January 2011

        • Payment Initiation Service

          A 'payment initiation service' is an online service to initiate a payment order at the request of a payment service user from a payment account held at another account servicing payment service provider with the user's consent and authentication.

          Added: December 2018

        • Payment Initiation Service Provider (s) or PISP(s)

          A person licensed by the CBB to undertake payment initiation services.

          Added: December 2018

        • Person

          Unless the context requires otherwise, a natural or corporate person.

        • Personal account transaction

          A transaction undertaken by an employee of a conventional bank licensee in a financial instrument, for his own account.

          Added: January 2011

        • Politically Exposed Persons or 'PEPs'

          'Politically Exposed Persons' or 'PEPs' means individuals who are, or have been entrusted with prominent public functions in Bahrain or a foreign country, for example Heads of State or government, senior politicians, senior government, judicial or military officials, senior executives of state owned corporations or important political party officials or persons who are or have been entrusted with a prominent function by an international organisation. Business relationships with family members or close associates of PEPs involve reputational risks similar to PEPs themselves. The definition is not intended to cover middle-ranking or more junior officials in the foregoing categories. Bahraini PEPs would include all Ministers, all MPs, and all Ministry officials with the rank of Undersecretary or above.

          Amended: July 2016

        • Pooled funds

          In investments, the combination of funds for the benefit of a common project, or a group of investors who use their combined influence to manipulate prices.

        • Price risk

          The narrow definition of price risk as applied to securities is as follows: The risk that the value of a security (or a portfolio) will decline in the future. Price risk can apply to any financial instrument, commodity, or foreign exchange position. Therefore a wider definition used by hedge funds is: The risk that the value of position in financial instruments, commodities or foreign exchange will decline due to moves in market factors.

          Amended: January 2015

        • Principal

          Means the amount of credit received plus any other potential other charges, the total of which is subject to interest/profit.

          Added: October 2012

        • Principal Amount

          The amount of any outstanding claim (excluding any interest and other expenses) on, or contingent liability in respect of, the relevant counterparty.

          Added: October 2018

        • Profit equalization reserve

          Profit equalisation reserve is the amount appropriated by the Islamic bank out of the mudaraba income, before allocating the mudarib share, in order to maintain a certain return level of return on investment for investment account holders and increase owners' equity.

        • Providing credit

          Providing credit is defined as the provision of credit to a person in his capacity as borrower or potential borrower. This includes consumer and mortgage credit; and providing credit by way of finance leases, factoring, forfaiting and reverse repo transactions. It also includes the issuance or endorsement of letters of credit, the issuance of letters of guarantee, and other contingent credit activities (such as the underwriting of loans), the purchase on the secondary market of loans and other contracts of credit (that do not otherwise fall under the definition of financial instruments), and the provision of ancillary credit-related activities, such as advising on or arranging loans. It excludes money advanced to a person in consideration for debt instruments issued by the same person. (see LR-1.3.18).

          Amended: January 2013

        • PSE

          A public sector entity which is specified as such either by the central bank ('domestic PSE') or by an overseas banking supervisory authority ('foreign PSE'). Domestic PSEs include those entities owned by the government, excluding the subsidiaries of such institutions undertaking commercial activities.

          Added: October 2018

        • Public Offering(s)

          An offer of securities to the general public. (see Rule BC-8.5.9).

          Amended: January 2013
          Added: January 2011

      • [ Q ]

        • Qualified by Exception

          A report issued by an appointed expert that is qualified and indicates that certain areas or issues remain unresolved or are unverifiable due to certain limitations imposed on the appointed expert's work. The report will clearly indicate the type and reason for exception and the action that would have been taken by the appointed experts had the mentioned limitation not been placed on their work.

          Added: October 2011

        • Qualifying Holding(s) (as referred to in Module CM)

          [Deleted in April 2015.]

          Deleted: April 2015
          Amended: April 2012
          Added: January 2011

      • [ R ]

        • Real time promotion

          A real time promotion is a promotion made in the course of a personal visit, telephone conversation or other interactive dialogue.

          Added: January 2011

        • Regulated banking services

          Any of the regulated activities permitted to be undertaken by a conventional bank licensee (see LR-1.3).

        • Regulated insurance services

          Regulated insurance services are any of the activities specified in Volume 3, Section AU-1.4, carried on by way of business.

        • Regulated Islamic banking services

          Regulated Islamic banking services are any of the activities specified in Volume 2, Section LR-1.3, carried on by way of business.

        • Relevant Authorities

          For the purposes of Module FC, relevant authority refers to the authorities listed in Rule FC-5.3.2.

          Amended: October 2014

        • Remuneration

          Means all types of compensation including but not limited to salary (fixed and variable bonus), fee and non-cash benefits such as health insurance, car housing, education, grants of stock, stock options or pension benefits.

          Amended: January 2014

        • Reporting Accountant

          A Reporting Accountant is a person appointed by the CBB under the authority of Article 114 of the CBB Law as an Inspector of the business of a licensee or listed company.

          Added January 2009

        • Representative office

          A person who is licensed by the CBB as per Volume 5 (Specialised Licensee/Representative Office) Module AU to undertake only representative office functions:

          (i) Gather financial, economic and commercial information;
          (ii) Carry out general promotional activities; and/or
          (iii) Provide general assistance of a non specific nature to resident and non resident customers of the overseas entity/group the office is representing.
          Amended: January 2011

        • ROAA

          Return on Average Assets.

        • ROAE

          Return on Average Equity.

        • Repo

          (a) an agreement between a seller and buyer for the sale of securities, under which the seller agrees to repurchase the securities, or equivalent securities, at an agreed date and, usually, at a stated price;
          (b) an agreement between a buyer and seller for the purchase of securities, under which the buyer agrees to resell the securities, or equivalent securities, at an agreed date and, usually, at a stated price.

        • Repo-style Transactions

          Transactions involving the sale and repurchase ('repo') of assets, purchase and resale ('reverse repo') of assets, as well as securities lending and securities borrowing. The term 'repo-style transactions' is generally taken to refer to any of the following transactions of a bank:

          i Sale and repurchase ('repo') of securities — the bank agrees to sell securities to a third party for cash with a commitment to repurchase the securities at an agreed price on an agreed future date.
          ii Securities lending — the bank lends securities to a third party and receives either cash or other securities from that party in exchange as collateral.
          iii Purchase and resale ('reverse repo') of securities — the bank agrees to acquire securities from a third party for cash, with a commitment to resell the securities at an agreed price on an agreed future date (i.e. the reverse of repo transactions).
          iv Securities borrowing — the bank borrows securities from a third party and gives cash or other securities to that party in exchange as collateral.
          Added: October 2018

        • Reputational risk

          Reputational risk is the potential that negative publicity regarding an institution's business practices, whether true or not, will cause a decline in the customer base, costly litigation, or revenue reductions.

        • Resident

          This term includes:

          (a) Persons of whatever nationality whose normal place of residence or business is in Bahrain at the relevant time or whose main source of income is earned from Bahrain.
          (b) Persons who have been granted permanent resident permits in Bahrain.
          (c) Corporate and other institutions who have a permanent registered address in Bahrain and/or a commercial registration number including branches or subsidiaries located in Bahrain of overseas registered corporate or other institutions (excluding offshore companies). However, dealings with the offices of such corporations outside Bahrain in respect of non-Bahrain business is permitted.
          (d) Staff of Bahrain Embassies and Consulates living outside Bahrain.
          (e) Agents or Agencies located abroad but acting on behalf of or for the account of Bahrain residents.

        • Restricted Investment Accounts

          With this type of account, the investment account holder imposes certain restrictions as to where, how and for what purpose his funds are to be invested. Further, the Islamic bank may be restricted from commingling its own funds with the restricted investment account funds for purposes of investment. In addition, there may be other restrictions which investment account holders may impose. For example, investment account holders may require the Islamic bank not to invest their funds in instalment sales transactions or without guarantor or collateral or require that the Islamic bank itself should carry out the investment itself rather than through a third party. Restricted participating investment bonds and restricted participating investment units (investment funds) and any other accounts of similar nature are equivalent to the restricted investment accounts.

        • Retail customer(s)

          Defined in Rule BC-8.4.10. A retail customer means a customer who is not classified as an accredited investor under Rules BC-8.4.6.

          Added: January 2011

        • Retail Deposits

          Deposits placed with a bank by a natural person. Deposits from legal entities, sole proprietorships or partnerships are captured in wholesale deposit categories.

          Added: October 2018

        • Rights or interests in Financial instruments

          Rights to or interests in all financial instruments.

      • [ S ]

        • Safeguarding financial instruments

          Safeguarding financial instruments means the safeguarding and administration of financial instruments belonging to another person (see LR-1.3.29 ff).

        • Secured Obligations

          Obligations that are secured by legal rights on specifically designated assets owned by the bank which are used in the case of bankruptcy, insolvency or liquidation.

          Added: October 2018

        • Securitised assets

          Creating a financial product such as a mortgage pass-through security, by pooling assets to back the instrument. Also refers to the replacement of loans and/or cash flows of financial intermediaries with negotiable securities issued in the capital markets.

        • Security(ies) (as referred to in Chapter BC-7 and in the definition of market)

          "Securities" means shares or bonds issued by shareholding companies, government debt instruments and the following financial instruments:

          (a) Shares in companies and other securities equivalent to shares in companies or other entities, and depositary receipts in respect of shares;
          (b) Bonds or other forms of debt, including depositary receipts in respect of such securities;
          (c) Warrants;
          (d) Units, rights or interests (however described) of the participants in a collective investment scheme;
          (e) Options, futures and any other derivative contracts relating to commodities that must be settled in cash or may be settled in cash at the option of one of the parties (otherwise than by reason of a default or other termination event);
          (f) Options, futures and any other derivative contract relating to commodities that can be physically settled;
          (g) Units to Real Estate Investment Trusts (REITs);
          (h) Index tracking products including Islamic indices;
          (i) Any other financial instrument approved as a financial instrument by the CBB for the purpose of trading such instrument on an exchange; and
          (j) Islamic securities, being those financial instruments that are Shari'a compliant.
          Amended: January 2011

        • Securities Financing Transactions (SFTs)

          Transactions such as repurchase agreements, reverse repurchase agreements, security lending and borrowing, and margin lending transactions, where the value of the transactions depends on market valuations and the transactions are often subject to margin agreements.

          Added: January 2015

        • Self-Regulatory Organisation(s) or (SROs)

          "Self-Regulatory Organizations (SROs)" means any organisation licensed by the CBB under Volume 6 of the Markets and Exchanges (MAE) Module, or the Clearing, Settlement and Central Depository (CSD) Module, or any other organisation recognised as an SRO by the CBB.

          Added: January 2011

        • Senior Manager/Management

          Refers to individuals occupying the position of CEO or head of function.

        • Service level agreement

          An agreement forming part of the Outsourcing Agreement between the outsourcing service provider and the bank that outlines the standards of service to be provided by the outsourcing service provider.

        • Shareholders

          a) In relation to a share which is represented by a bearer certificate, the person who holds the certificate; b) in relation to a share that is not represented by a bearer certificate, the person whose name is entered on the register in relation to the share.

        • Shares

          A share or stock in the share capital of an enterprise, whether incorporated or unincorporated, but excluding units in collective investment undertakings.

        • Shari'a board or shari'a supervisory board

          An independent body of specialized jurists who, collectively, are entrusted with the duty of directing, reviewing and supervising the activities of an Islamic financial institution in order to ensure that they are in compliance with Islamic Shari'a rules and principles.

        • Small Business Deposits

          Deposits that are considered as having similar characteristics to retail accounts, provided the total aggregated funding raised from one small business customer is less than BHD 500,000 (on a consolidated basis where applicable).

          Added: October 2018

        • Soft dollar agreement (as referred to in Chapter BC-8)

          An agreement in any form under which a conventional bank licensee receives goods or services in return for investment business put through or in the way of another person.

          Added: January 2011

        • Sovereign debt

          A debt instrument issued by central government.

        • Spot transactions

          A foreign exchange transaction in which each party promises to settle the transaction two days after the transaction date.

        • Stable Deposits

          Amounts of the deposits that are fully insured by a deposit insurance scheme which represents a portion from the deposits in the transactional accounts (e.g. accounts where salaries are automatically deposited), as per the provisions of those regulations.

          Added: October 2018

        • Subsidiary(ies)

          An entity, including an unincorporated entity such as a partnership, that is controlled by another entity (known as the parent entity).

          Amended: April 2015
          Added: January 2015

        • Subsidiary undertaking

          A company or other enterprise controlled by another company or enterprise (the parent or the holding company).

        • Succession plan

          A plan developed by a bank that would lay down the bank's strategy with respect to succession of various senior management or board positions within the bank.

        • Suspicious Transaction

          Any transaction or dealing which raises in the mind of a person involved, any concerns or indicators that such a transaction or dealing may be related to money laundering or terrorist financing or other unlawful activity. Examples of suspicious transactions are set out in Appendix FC 3.

        • Swap(s)

          A financial contractual agreement between two parties to exchange (swap) a set of payments that one party owns for a set of payments owned by the other party.

          Amended: January 2011

      • [ T ]

        • Tranche

          One of several related securities offered at the same time. Tranches from the same issuer usually have different risk, reward, and/or maturity characteristics.

        • Transactional Accounts

          Accounts used to settle transactions pertaining to salaries and customer income.

          Added: October 2018

        • Transfer Risk

          The risk that a borrower will not be able to convert local currency into foreign exchange and so will be unable to make debt service payments in foreign currency. The risk normally arises from exchange restrictions imposed by the government in the borrower's country.

          Added: July 2017

        • Transferable securities

          Those classes of securities which are negotiable on the capital market, with the exception of instruments of payment. Transferable securities include:

          (a) shares in companies and other securities equivalent to shares in companies, partnerships or other entities, and depositary receipts in respect of shares;
          (b) bonds or other forms of securitized debt, including depositary receipts in respect of such securities;
          (c) warrants;
          (d) any other securities giving the right to acquire or sell any such transferable securities or giving rise to a cash settlement determined by reference to transferable securities, currencies, interest rates or yields, commodities or other indices or measures.

        • Trigger event(s) (as used in Section CA-2.1)

          A trigger event is the earlier of:

          (a) A decision that a write-off (without which the conventional bank licensee would be unviable) is necessary, as determined by the CBB; or
          (b) The decision to make a public sector injection of capital (or equivalent support) without which the conventional bank licensee would have become unviable (as determined by the CBB).
          Added: January 2015

        • Trilateral meeting

          A meeting between a bank, an appointed expert and the CBB.

          Amended: October 2011

        • Transferee

          For purpose of Chapter GR-4, means any person licensed to carry out the transferred banking business.

          Added: October 2012

        • Transferor

          For the purpose of Chapter GR-4, means the bank wishing to transfer any part of its banking business according to the provisions of Resolution No.(33) for the year 2012.

          Added: October 2012

      • [ U ]

        • Underwriting (as defined in Paragraph CM-5.3.6)

          A binding commitment by the reporting bank to purchase securities issued by, or provide syndicated loans/credit facilities to (as the case may be) an unconnected party ("the issuer" or "the borrower") at a mutually agreed price.

          Added: April 2012

        • Unencumbered Assets

          Assets free of legal, regulatory, contractual or other restrictions on the ability of the bank to liquidate, sell or transfer these assets. Liquid assets should not be used to cover trading positions or to secure, collateralize or credit-enhance any transaction, nor be designated to cover operational costs (such as rents and salaries).

          Added: October 2018

        • Units in collective investment undertakings

          Rights or interests (however described) of the participants in a collective investment scheme.

        • Unrestricted Investment Accounts

          With this type of account, the investment account holder authorizes the Islamic bank to invest the account holder's funds in a manner which the Islamic bank deems appropriate without laying down any restrictions as to where, how and for what purpose the funds should be invested. Under this arrangement the Islamic bank can commingle the investment account holder's funds with its own funds or with other funds the Islamic bank has the right to use (e.g., current accounts). The investment account holders and the Islamic bank generally participate in the returns on the invested funds. Unrestricted participating investment bonds and any other accounts that are of similar nature are equivalent to unrestricted investment accounts.

      • [ V ]

        • VaR

          An estimate expressed as a monetary value of the probability of losses on a portfolio of financial instruments based on a statistical analysis of historical market price trends, correlations, and volatilities.

        • Variation Margin

          A clearing member or client funded collateral posted on a daily or intraday basis, to a CCP based upon price movements of their transactions.

          Added: October 2018

      • [ W ]

        • Warrants

          Warrants are instruments that confer an entitlement to subscribe for shares, debenture and government and public securities. The rights conferred must be rights to 'subscribe' for the relevant investments. This means that they are rights to acquire the investments directly from the issuer of the investments and by way of the issue of new investments.

        • Wholesale banks

          Deleted: July 2017

        • Wholesale Funding

          Deposits and obligations that are raised from non-natural persons (i.e. legal entities, including sole proprietorships and partnerships).

          Added: October 2018

        • Without delay

          The phrase 'without delay' means, ideally, within a matter of hours of a designation by the United Nations Security Council or its relevant Sanctions Committee (e.g. the 1267 Committee, the 1988 Committee, the 1718 Sanctions Committee or the 1737 Sanctions Committee). For the purposes of S/RES/1373(2001), the phrase 'without delay' means upon having reasonable grounds, or a reasonable basis, to suspect or believe that a person or entity is a terrorist, one who finances terrorism or a terrorist organisation. In both cases, the phrase 'without delay' should be interpreted in the context of the need to prevent the flight or dissipation of funds or other assets which are linked to terrorists, terrorist organisations, those who finance terrorism, and to the financing of proliferation of weapons of mass destruction, and the need for global, concerted action to interdict and disrupt their flow swiftly.

          Added: October 2019

      • [ Y ]

        • Yield curve

          The graphic depiction of the relationship between the yield on bonds of the same credit quality but over different maturities.

        • Yield to maturity (YTM)

          The percentage rate of return paid on a bond, note, or other fixed income security if the investor buys and holds it to its maturity date. The calculation for YTM is based on the coupon rate, length of time to maturity, and market price. It assumes that coupon interest paid over the life of the bond will be reinvested at the same rate.

          Amended: January 2015

    • List of Circulars

      • Licensing and Authorisation Requirements (LR)

        Circular Ref Date of Issue Module Ref. Circular Subject
        5/77 8 Mar 1977 LR B-1.1, LR 3.3 Permitted Business Transactions with Residents
        OG/16/90 10 Jan 1990 LR 2.3, LR 3.3 'no subject'
        OG/192/98 16 Jun 1998 LR 4 Financial Trust Regulation
        no reference Apr 1981 LR 5 Precious Metals and Commodities

      • High Level Controls (HC)

        Circular Ref Date of Issue Module Ref. Circular Subject
        EDBS/.../04
        (Consultative Paper)
        24 Feb 2004 HC 1 High Level Controls Requirements for Banks—Enhancing Corporate Governance
        BC/23/99 8 Nov 1999 HC 1 'Enhancing Corporate Governance in Banking Organisations'
        BC/904/95 24 Jul 1995 HC 1.6 Notification to, and approval from the Agency for certain matters
        ODG/329/03 10 Sep 2003 HC 1.6 Corporate Governance Reporting
        BC/11/98 27 Jul 1998 HC 2 Terms and Definitions Applying to the Management of Banks and Financial Institutions
        BC/8/00 24 May 2000 HC 2 Controllers of, and holdings and transfers of significant ownership or controlling interests in, Agency licensees
        BC/13/99 15 Jun 1999 HC 3 Compliance, Risk Management and Internal Controls
        BMA/1287/94 6 Nov 1994 HC 4 Foreign Exchange, Securities and Other Dealers

      • Business and Market Conduct (BC)

        Circular Ref Date of Issue Module Ref. Circular Subject
        EDBC/73/96 1 May 1996 BC 1.1 Explanatory note on the promotion of Banking and Financial Products offered in/from Bahrain by Means of Incentives etc.
        BS.C7/91/442 10 Sep 1991 BC 1.1 Promotion of Banking Services
        85/25 2 May 1985 BC 2 Code of Conduct for Foreign Exchange Dealers and Brokers
        83/5 10 Apr 1983 BC 3 Disclosure of Information about Individual Accounts
        BC/14/98 2 Sep 1998 BC 4.1 Savings Accounts
        BS.C7/90/34 31 Jan 1990 BC 4.2 Dinar Certificates of Deposits
        EDBO/51/02 2 Apr 2002 BC 4.3 Charges to Customers
        BC/5/00 8 Mar 2000 BC 4.4 Accounts held for Clubs and Societies in Bahrain
        BS.D(111)/94/1507 24 Sep 1994 BC 4.5 Fees on Current Accounts
        BC/2/01 3 Mar 2001 BC 4.6 Brokerage Fees in Bahrain
        ODG/145/92 18 Aug 1992 BC 4.7 New or expanded products and facilities in the Retail Banking Field
        EDBO/46/03 8 Apr 2003 BC 4.8 Inheritance—Financial Procedures
        EDBO/27/96 25 Sep 1996 BC 5.1 Regulation Relating to a Penalty System for "Dishonoured Cheques"
        OG/399/94 28 Nov 1994 BC 5.2 Returned Cheques
        EDBO/49/01 6 May 2001 BC 5.3 Penalty Charges on Returned Cheques
        BC/8/98 24 May 1998 BC 6.1 Off-site ATMs
        EDBO/45/02 13 Mar 2002 BC 6.2 GCC ATM Network Charges

      • Capital Adequacy (CA)

        Circular Ref Date of Issue Module Ref. Circular Subject
        ODG/50/98 11 Sep 1998 CA 1CA 9 Market Risk Capital Regulations
        BC/07/02 26 Jun 2002 CA 1.4 Review of PIR by External Auditors
        OG/78/01 20 Feb 2001 CA 2.5 Monitoring of Capital Adequacy
        BC/01/98 10 Jan 1998 CA 2.5 Risk Asset Ratio

      • Credit Risk Management (CM)

        Circular Ref Date of Issue Module Ref. Circular Subject
        BC/117/95
        (partial)
        1 Feb 1995 CM 1CM 2 Risk Management
        2 OG/127/01 18 Mar 2001 CM 2.3 Developing a Sound Credit Culture
        BC/1/01
        (partial)
        8 May 2001 CM 4.2 IAS 39
        EDBC/1/95 26 Aug 1995 CM 4.3 Re: Provisioning Policies of Branches of Foreign Banks in Bahrain
        OGD/27/88 9 Feb 1988 CM 4.4 Provisions Against Country Debt
        BC/1/01
        (partial)
        8 May 2001 CM 4.4 IAS 39
        BC/12/01 26 Nov 2001 CM 5 The Monitoring and Control of Large Exposures of Banks Licensed by the Agency
        EDBC/128/96 4 Aug 1996 CM 6 Staff Loans
        OG/45/88 13 Mar 1988 CM 7.1 Write-Off—Credit Facility
        BC/7/01
        (partial)
        23 Oct 2001 CM 7.1 Audited Financial Statement of Locally Incorporated Banks for the Year Ending 31 December 2001 and Subsequent Years.
        BC/8/01 22 Oct 2001 CM 7.1 Audited Financial Statement of Branches of Foreign Banks for the (partial) Year Ending 31 December 2001 and Subsequent Years.
        OG/50/92
        (partial)
        4 Mar 1992 CM 8.1CM 8.2 Consumer Finance
        OG/73/02 17 Feb 2002 CM 8.1CM 8.2 Duty to Display Current Effective Rate of Interest
        BC/3/98 21 Feb 1998 CM B-2 Basel Committee on Banking Supervision Framework for the Evaluation of Internal Controls Systems

      • Operational Risk Management (OM)

        Circular Ref Date of Issue Module Ref. Circular Subject
        BS/9/03 14 Sep 2003 OM 1 Operational Risk Management
        ODG/162/03 21 May 2003 OM 2 Outsourcing
        BC/9/98 16 Jun 1998 OM 3 Electronic Money and Electronic Banking Activities
        BC/6/02 24 Jun 2002 OM 3 Risk Management Principles for Electronic Banking
        ODG/347/03 28 Sep 2003 OM 4.2 Succession Planning

      • Financial Crimes (FC)

        Circular Ref Date of Issue Module Ref. Circular Subject
        BC/17/97 10 Nov 1997 FC B-1 Money Laundering
        OG/308/89 14 Oct 1989 FC B-1 Money Laundering
        EDBC/6/01 14 Oct 2001 FC 1, FC 4FC 7 Re: Money Laundering Regulation
        BC/1/02 27 Jan 2002 FC 3 FATF Special Recommendations on Terrorism Financing
        BC/3/00 5 Mar 2000 FC 4.4 Re: Accounts for Charity Organisations
        OG/423/01 1 Oct 2001 FC 8 UN Security Council Resolution 1373 (2001)

      • BMA Reporting Requirements (BR)

        Circular Ref Date of Issue Module Ref. Circular Subject
        BC/7/01
        (partial)
        23 Oct 2001 BR 1.1 Audited Financial Statement of Locally Incorporated Banks for the Year Ending 31 December 2001 and Subsequent Years.
        no reference
        (partial)
        Apr 1981 BR 1.1 Precious Metals and Commodities
        BC/3/02 13 Mar 2002 BR 1.1 Additional Public Disclosure Requirements Amended Version – 2002
        ODG/329/03 10 Sep 2003 BR 1.1 Corporate Governance Reporting
        BC/8/01
        (partial)
        23 Oct 2001 BR 1.2 Audited Financial Statement of Branches of Foreign Banks for the Year Ending 31 December 2001 and Subsequent Years.
        EDBC/1/95 26 Aug 1995 BR 1.2 Re: Provisioning Policies of Branches of Foreign Banks in Bahrain
        BC/1/99
        (partial)
        22 Feb 1999 BR 2.1 Enhancing Bank Transparency
        ODG/50/98
        (partial)
        11 Sep 1998 BR 3.1, BR 5.2 BR Market Risk Capital Adequacy Regulations
        BC/07/02 26 Jun 2002 BR 3.1, BR 3.2 Review of PIR by External Auditors
        BC/06/00 26 Apr 2000 BR 3.1, BR 3.2 BMA—Prudential Returns
        BC/12/01
        (partial)
        26 Nov 2001 BR 3.1, BR 5.1 The Monitoring and Control of Large Exposures of Banks Licensed by the Agency
        ER/118/98 2 Feb 1998 BR 3.3, BR 4.1 Revised Statistical Returns
        ER/247/98 22 Mar 1998 BR 3.3, BR 4.1 Revised Statistical Returns
        OG/89/88 30 Jun 1988 BR 4.2 Reserve Balances
        BMA/751/93
        (partial)
        8 Jul 1993 BR 4.3 Directors' Interest in the Shares of, and the Unaudited Quarterly Financial Statements of, Locally Incorporated Banks Quoted on the Bahrain Stock Exchange.
        BC/904/95
        (partial)
        24 Jul 1995 BR 5.1 Notification to, and approval from the Agency for certain matters
        BC/309/94 28 Mar 1994 BR 5.1 Management Personnel
        BMA/1287/94
        (partial)
        6 Nov 1994 BR 5.1 Foreign Exchange, Securities and Other Dealers
        BC/13/99
        (partial)
        15 Jun 1999 BR 5.1 Compliance, Risk Management and Internal Controls
        EDBC/6/01
        (partial)
        14 Oct 2001 BR 5.1 Re: Money Laundering Regulation
        EDBC/73/96
        (partial)
        1 May 1996 BR 5.1 Explanatory note on the promotion of Banking and Financial Products offered in/from Bahrain by Means of Incentives etc.
        BMA(4)/91/832 22 Oct 1991 BR 5.1. Specimen Signatures
        OG/45/88 13 Mar 1988 BR 5.2 Write-Off—Credit Facility
        ODG/145/92 18 Aug 1992 BR 5.3 New or expanded products and facilities in the Retail Banking Field
        BC/3/00 5 Mar 2000 BR 5.3 Re: Accounts for Charity Organisations
        BC/03/99 27 Feb 1999 Appendix New Prudential Information Returns

      • Public Disclosure Requirements (PD)

        Circular Ref Date of Issue Module Ref. Circular Subject
        EDBC/14/96 17 Jan 1996 PDB-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")

      • Compensation (CP)

        Circular Ref Date of Issue Module Ref. Circular Subject
        OG/423/93 28 Nov 1993 CP 1CP 2 Deposit Protection Scheme (the "Scheme")
        OG/425/94 21 Dec 1994 CP 2.4 Deposit Protection

    • CBB Reporting Forms

      • LR: LR: Licensing Requirements

        • Appendix OM-1: Appendix OM-1: Operational Risk Management

          Please download the Form in PDF format.

          • Appendix LR-1: Annual License Fee Form (ALF)

            Please download the Form in PDF format.

          • Appendix LR-2: Direct Debit Authorisation Form

            Please download the Form in PDF format.

        • [Deleted]

          Deleted: October 2011

          • [Deleted]

            Deleted: October 2011

        • BC: Business and Market Conduct

          • Appendix BC 1: List of Dishonoured Cheques

            Please download the Form in PDF format.

        • FC: Financial Crime

          • Appendix FC 2: Suspicious Transaction Report (STR)

            [Deleted in July 2016]

            Deleted: July 2016

          • Appendix FC 4: MLRO Form

            [Deleted in July 2016]

            Deleted: July 2016

        • BR: CBB Reporting Requirements

          • Appendix BR 2: Statistical Returns

            Please download the Form in Excel format.

          • Appendix BR 5: — PIR Bahraini Conventional Banks

            Please download the Form in Excel format.

          • Appendix BR 5A: — PIR Overseas Conventional Banks

            Please download the Form in Excel format.

          • Appendix BR 8: Quarterly Report on Overseas Banking Subsidiaries and Branches

            Please download the Form in PDF format.

          • Appendix BR 9: External Auditor's PIR Review Letter

            Please download the Form in PDF format.

          • Appendix BR 10: Board and Committee Meetings

            Please download the Form in PDF format.

          • Appendix BR 11: Connected Counterparty Exposures

            Please download the Form in Excel format.

          • Appendix BR 13: Appointed Experts Report

            Please download the Form in PDF format.

          • Appendix BR-14: Details of Remuneration Paid

            Please download the Form in PDF format.

          • Appendix BR-15: Details of Remuneration for Top 12 Employees

            Please download the Form in PDF format.

          • Appendix BR-16: Eligible Accounts Report for the Deposits Protection Scheme

            Please download the Form in PDF format.

          • Appendix BR-19 Large Exposures Report

            Please download the Form in PDF format.

          • Appendix BR-20 Guidelines for Completion of Supplementary Information Form

            Please download the Guidelines in PDF format.

          • Appendix BR-21: Information required for Annual and Interim Financial Review

            Please download the document in Excel format.

          • Appendix BR-22: Continuous Professional Development Form (CPD)

            Please download the Form in PDF format.

          • Appendix BR-23: Liquidity Coverage Ratio (LCR)

            Please download the Form in Excel format.

          • Appendix BR-24: Net Stable Funding Ratio (NSFR)

            Please download the Form in Excel format.

        • EN: EN: Enforcement

          • Appendix EN 1: Enforcement

            Please download the Form in PDF format.

        • OM: Operational Risk Management

    • CBB Authorization Forms

      • LR: Licensing and Authorisation Requirements

        • Form 1: Application for a License

          Please download the Form in PDF format.

        • [Deleted]

          Deleted: April 2011

        • Form 2: Application for Authorisation of Controller

          Please download the Form in PDF format.

        • Form 3: Application for Approved Person Status

          Please download the Form in PDF format.

    • Supplementary Information

      • HC: HC: High-level Controls

        • Appendix HC-(i) Agreed-upon Procedures re Compliance with HC-5 (Remuneration)

          Please download the Form in PDF format.

      • GR: GR: General Requirements

        • Appendix GR-1: Application for Transfer of Business

          Please download the Form in PDF format.

      • BC: Business and Market Conduct

        • Appendix BC 2: CBB Control List for Dishonored Cheques

          Please download the Form in PDF format.

        • Appendix BC 3: CBB List of abusers of cheques — active

          Please download the Form in PDF format.

        • Appendix BC 4: CBB List of abusers of cheques — inactive

          Please download the Form in PDF format.

        • Appendix BC 5: Market Terminology — Foreign Currency and Deposit Market

          Please download the Form in PDF format.

        • Appendix BC 6: Proposed Scale of Brokerage Fees

          Please download the Form in PDF format.

        • Appendix BC 7: Caps on Fees and Charges for Standard Services Provided to Individuals Applicable to Retail Banks From 01/May/2018

          Please download the Form in PDF format.

      • CA: Capital Adequacy

        • Appendix CA-1 Minority interest illustrative example

          Please download the Appendix in PDF format.

        • Appendix CA-2 Treatment of counterparty credit risk and cross-product netting

          Please download the Appendix in PDF format.

        • Appendix CA-3 The 15% of common equity limit on specified items

          Please download the Appendix in PDF format.

        • Appendix CA-4 Capital treatment for failed trades and non-DvP transactions

          Please download the Appendix in PDF format.

        • Appendix CA-5 Overview of Methodologies for the Capital Treatment of Transactions Secured by Financial Collateral under the Standardised Approach

          Please download the Appendix in PDF format.

        • Appendix CA-6 Illustrative IRB Risk Weights

          Please download the Appendix in PDF format.

        • Appendix CA-7 Supervisory Slotting Criteria for Specialised Lending

          Please download the Appendix in PDF format.

        • Appendix CA-8 Illustrative Examples: Calculating the Effect of Credit Risk Mitigation under the Supervisory Formula

          Please download the Appendix in PDF format.

        • Appendix CA-9 Mapping of Business Lines

          Please download the Appendix in PDF format.

        • Appendix CA 10: Basel II — Operational Risk — Standardized approach — Calculation of capital charge

          Please download the Form in PDF format.

        • Appendix CA 11: Worked example of maturity method of calculating general interest rate risk

          Please download the Form in PDF format.

        • Appendix CA 12: Worked example of duration method of calculating general interest rate risk

          Please download the Form in PDF format.

        • Appendix CA 13: Worked example of maturity ladder approach for calculating commodities risk

          Please download the Form in PDF format.

        • Appendix CA 14: Worked example of delta-plus method of calculating options risk

          Please download the Form in PDF format.

        • Appendix CA 15: Supervisory Framework for the Use of "Backtesting" in Conjunction with the Internal Models Approach to Market Risk Capital Requirements

          Please download the Form in PDF format.

        • Appendix CA 16: Table for Mapping Notations of ECAIs

          Please download the Form in PDF format.

        • Appendix CA 17: Calculation of risk weighted amount of an investment subject to fair value treatment

          Please download the Form in PDF format.

        • Appendix CA 18: Bahrain Sovereign and Public Sector Entities Eligible for Zero Risk Weighting

          Please download the Form in PDF format.

        • Appendix CA 19: Stress Testing Guidance for the Correlation Trading Portfolio

          Please download the Appendix in PDF format.

        • Appendix CA 20: Supplementary Schedules to Calculate Capital Charges under the Standardised Approach for Market Risk

          Please download the Appendix in Excel format.

        • Appendix CA-21: Investments in Commercial Entities

          Please download the Appendix in PDF format.

        • Appendix CA-22: Comprehensive Example of Deductions

          Please download the Appendix in PDF format.

        • Appendix CA-23: Comprehensive Example of Deductions and T2 2% Cap

          Please download the Appendix in PDF format.

      • CM: Credit Risk Management

        • Appendix CM 1: Sovereign Debt Provisioning Matrix

          Please download the Form in PDF format.

        • Appendix CM 2: Code of Best Practice on Consumer Credit and Charging

          Please download the Form in PDF format.

        • Appendix CM 3: Credit Reference Bureau Code of Practice

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        • Appendix CM-4: Regulation in respect of Close-Out Netting under a Market Contract

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      • FC: Financial Crime

        • Appendix FC 1: Amiri Decree Law No. 4

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        • Appendix FC-2A: Decree Law No. 54 (2006)

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        • Appendix FC-2B: Decree Law No. 58 (2006)

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        • Appendix FC 3: Guidelines for Detecting Suspicious Transactions

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        • Appendix FC 5: UN Security Council Resolution 1373 (2001)

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        • Appendix FC 6: Guidance Notes

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        • Appendix FC 7: UN Security Council Resolution 1267

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        • Appendix FC 8: Agreed-upon Procedures for testing Compliance with Module FC

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      • BR: CBB Reporting Requirements

        • Appendix BR 1: Instructions for Completion of Statistical Returns

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        • Appendix BR 3: Guidelines for Overseas Conventional Banks

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        • Appendix BR 4: Guidelines for Completion of the Prudential Information Returns

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        • Appendix BR 12: Guidelines for Completion of Exposures to Connected Counterparties

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        • Appendix BR-17: Instructions for the Completion of the Eligible Accounts Report for the Deposits Protection Scheme

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        • Appendix BR-18: Requirements for Report on Private Placements

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      • PD PD Public Disclosure

        • Appendices PD-1 to PD-4 Composition of Capital Disclosure Requirements

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          Please download the 'Basel III common disclosure template to be used from 1 January 2019' in Word format.

          Please download the 'Common disclosure template to be used during the transition of regulatory adjustments' in Word format.

          Please download the 'Template for main features of regulatory capital instruments' in Word format.

        • Appendix PD-5 Instructions for Publication of Press Releases

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      • CP: Compensation

        • Appendix CP 1A: Certificate of Compensation

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        • Appendix CP 1B: Customer Acknowledgement and Waiver

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        • Appendix CP 2: Resolution No. [23] of 2009 in respect of Definition of Deposit

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