• Reporting Requirements

    • BR BR CBB Reporting Requirements

      • BR-A BR-A Introduction

        • BR-A.1 BR-A.1 Purpose

          • Executive Summary

            • BR-A.1.1

              The purpose of this Module is to set out the Central Bank of Bahrain's (CBB') reporting requirements applicable to the banks as part of the CBB's on-going supervision activities.

              Amended: January 2011
              Amended: October 2010
              October 2007

            • BR-A.1.2

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

              (a) Principles of Business;
              (b) Public Disclosure;
              (c) Credit Risk Management;
              (d) Operational Risk Management;
              (e) Financial Crime;
              (f) Capital Adequacy;
              (g) High-Level Controls;
              (h) Business and Market Conduct; and
              (i) Audit Firms.
              Amended: October 2010
              October 2007

            • BR-A.1.3

              Unless otherwise stated, all reports referred to in this Module should be addressed to Banking Supervision Directorate of the CBB.

              Amended: October 2010
              October 2007

          • Legal Basis

            • BR-A.1.4

              This Module contains the CBB's Directive (as amended from time to time) relating to reporting requirements of the CBB and is issued under the powers available to the CBB under Article 38 of the Central Bank of Bahrain and Financial Institutions Law 2006 ('CBB Law'). The Directive in this Module is applicable to conventional bank licensees.

              Amended: January 2011
              October 2007

            • BR-A.1.5

              For an explanation of the CBB's rule-making powers and different regulatory instruments, see Section UG-1.1.

              October 07

        • BR-A.2 BR-A.2 Key Requirements

          • Power to Request Information

            • BR-A.2.1

              In accordance with Article 111 of the CBB Law, all licensed banks must provide all information that the CBB may reasonably request in order to discharge its regulatory obligations.

              Amended: October 2010

          • Regular Reporting — Annual Requirements

            • BR-A.2.2

              All Bahraini Conventional Banks Licensees in the Kingdom of Bahrain are required to submit to the CBB their annual audited financial statements (in compliance with the provisions set out under Section BR-1.1) no later than 3 months of the end of the bank's financial year. In addition, these banks are also required to submit supplementary information (as listed under Section BR-1.1) to the CBB.

              Amended: April 2019
              Amended: October 2010
              April 2008
              October 2007

            • BR-A.2.3

              All Bahrain branches of foreign banks are required to submit to the CBB their annual audited financial statements (in compliance with the provisions set out under Section BR-1.2) no later than the end of 3 months from the financial year end. In addition, these banks are also required to submit supplementary information (as listed under Section BR-1.2) to the CBB.

              Amended: April 2016
              Amended: October 2010
              October 2007

          • Regular Reporting — Semi-annual Requirements

            • BR-A.2.4

              All Bahrain retail branches of foreign banks are required to submit to the CBB their Balance Sheet and Profit and Loss Accounts (in compliance with the provisions set out under Section BR-2.1) no later than the end of 2 months from the reporting period end.

              Amended: April 2016
              Amended: April 2011
              Amended: October 2010
              October 2007

          • Regular Reporting — Quarterly Requirements

            • BR-A.2.5

              All Bahraini Conventional Banks Licensees in the Kingdom of Bahrain are required to submit to the CBB the following information on a quarterly basis:

              (a) PIR Forms and auditors reviews thereon (in accordance with the provisions set out under Section BR-3.1); and
              (b) Reviewed (unaudited) quarterly financial statements (in accordance with the provisions set out under Section BR-3.1).
              Amended: April 2019
              Amended: October 2011
              Amended: October 2010
              October 2007

            • BR-A.2.6

              All Bahrain branches of foreign banks are required to submit to the CBB PIR Forms (in accordance with the provisions set out under Section BR-3.2).

              Amended: July 2011
              Amended: October 2010
              October 2007

            • BR-A.2.7

              [This Paragraph was deleted July 2011].

          • Regular Reporting — Monthly Requirements

            • BR-A.2.8

              All banks licensed by the CBB in the Kingdom of Bahrain are required to submit to the CBB monthly statistical returns (as required under Section BR-4.1).

              Amended: January 2011
              Amended: October 2010
              October 2007

            • BR-A.2.8A

              All banks licensed by the CBB in the Kingdom of Bahrain are required to report monthly to the CBB of all payments and transfers of funds amounting to BD 3,000 or above from accounts held by the bank for charitable organisations registered in the Kingdom of Bahrain (as required under Paragraphs BR-4.1.5 and FC-1.6.4).

              Added: October 2011

            • BR-A.2.9

              All Bahraini Conventional Banks Licensees listed on the Bahrain Stock Exchange are required to report to the Capital Markets Supervision Directorate of the CBB, on a monthly basis, information relating to their Directors' interests in the shares of Bahraini Conventional Banks Licensees listed on the Bahrain Stock Exchange and submit exposures to connected counterparties to Banking Supervision Directorate (in accordance with the provisions set out under Section BR-4.3).

              Amended: April 2019
              Amended: October 2010
              October 2009
              October 2007

          • IIS Reporting Requirements

            • BR-A.2.9A

              All banks licensed by the CBB are required to complete online non-financial information related to their institution by accessing the CBB's institutional information system (IIS) (as required under Section BR-4A.1).

              Amended: April 2012
              Added: January 2011

          • Ad-hoc Reporting and Notification

            • BR-A.2.10

              All banks licensed by the CBB in the Kingdom of Bahrain are required to notify and report to the CBB on the following matters in Section BR-5.1:

              (a) Large exposures;
              (b) Changes in strategy and/or corporate plan;
              (c) Changes in management;
              (d) [This sub-paragraph was deleted in July 2019];
              (e) Appointment of a Compliance Manager/Officer;
              (f) Money laundering and suspicious transactions;
              (g) Promotion of financial products and services;
              (h) Authorised signatories;
              (i) Material losses through loan write-offs, fraud or other events; and
              (j) Material transfers of assets or liabilities; and
              (k) Enforcement actions imposed by host regulators on overseas subsidiaries and branches.
              Amended: October 2020
              Amended: July 2019
              Amended: October 2011
              Amended: October 2010
              April 2010
              October 2007

            • BR-A.2.11

              All Bahraini Conventional Banks Licensees are required to give the CBB immediate written notification of any actual breach by such bank of the minimum Risk Asset Ratio(s) (RAR) and to consult with the CBB prior to entering into any term borrowing arrangements (Section BR-5.2).

              Amended: April 2019
              Amended: April 2012
              Amended: October 2010
              October 2007

            • BR-A.2.12

              All retail banks licensed by the CBB in the Kingdom of Bahrain are required to notify the CBB on the introduction of new and expanded customers and products (Section BR-5.3).

              Amended: October 2011
              Amended: October 2010
              October 2007

            • BR-A.2.13

              Conventional bank licensees must clearly indicate the purpose of any communication addressed to the CBB. In cases of lack of response to such communication by the CBB, the licensee must not infer or assume implied acceptance, approval or acknowledgement of the contents of such communication.

              Added: October 2019

        • BR-A.3 BR-A.3 Module History

          • BR-A.3.1

            This Module was first issued in July 2004 by the BMA as part of the conventional principles volume. All regulations in this volume have been effective since this date. Any material changes that have subsequently been made to this Module are annotated with the calendar quarter date in which the change is made: UG-3 provides further details on Rulebook maintenance and version control.

            October 07

          • BR-A.3.2

            When the CBB replaced the BMA in September 2006, the provisions of this Module remained in force. Volume 1 was updated in October 2007 to reflect the switch to the CBB; however, new calendar quarter dates were only issued where the update necessitated changes to actual requirements.

            October 07

          • BR-A.3.3

            The most recent changes made to this Module are detailed in the table below:

            Summary of Changes

            Module Ref. Change Date Description of Changes
            BR-5.1.13 01/04/05 Notification of fraud.
            BR-5.1 01/10/05 New threshold for reporting of transfers by charities and prior approval of appointment of compliance officer /manager.
            BR-5.1.4 01/01/06 Addition of contact details to management information details.
            BR-3.3, BR-4.1 & BR-5.1.14 01/04/06 Revised statistical returns instructions and new notification requirement for material losses.
            BR-3.3 and BR-4.1 01/07/06 Submission of Form SR-6 is a monthly requirement.
            BR-4.1 01/07/06 Deletion of references to precious metals and commodities returns. Transfer of reserve requirements material from BR-4.2 to BR-4.1.
            BR-4.2 01/07/06 Deletion of reserve requirements material (moved to BR-4.1).
            BR-4.1.3 01/07/06 Revised date for submission of statistical forms
            BR-5.1.9 01/07/06 Minor changes reflecting change of Compliance Unit to Directorate
            BR-A.1 10/2007 New Rule BR-A.1.4 introduced categorising this Module as a Directive.
            BR-6 10/2007 New Rule allowing access to premises per the provisions of the CBB Law
            BR-A.2, BR-1.1, BR-4.1, BR-5.2 04/2008 New reporting deadlines, new 7% reserves ratio, new paragraph on reporting of write-offs
            BR-3.1.6 01/2009 New Agreed Upon Procedures report for PIR
            BR-1.1 01/2009 Enhanced guidance on supplementary information and references to annual financial statements
            BR-3.1 01/2009 Reference to consolidated and non-consolidated basis dropped as only 1 PIR form is required.
            BR-4.1.4b 07/2009 The minimum daily cash reserve balance with the CBB brought back to 5% from 7%.
            BR- A.2 and BR- 4.3.4 10/2009 New reporting arrangements for exposures to connected counterparties.
            BR-A.2.10 and BR-5.1.16 04/2010 Approval for material transfers of assets or liabilities
            BR-A.2.2 10/2010 Due date changed to 3 months to be consistent in the Rulebook.
            BR-1.1.3 10/2010 Required information updated to be consistent in the Rulebook.
            BR-1.2.5 10/2010 Wording changed to be consistent in the Rulebooks.
            BR-3.1.2 10/2010 Reference to legal entity deleted.
            BR-3.1.3 10/2010 Reference changed to be consistent with IAS and IFRS.
            BR-3.1.4 10/2010 Wording changed to be consistent in the Rulebook.
            BR-3.1.5 10/2010 Changed to Guidance.
            BR-A.2.4, BR-2.1.2 and BR-3.1.8 10/2010 Due date changed to 2 months to be consistent in the Rulebook.
            BR-3.2.5 and BR-5.1 10/2010 References corrected.
            BR 10/2010 Minor changes to formatting and spelling to be consistent in the Rulebook.
            BR-A.1.4 01/2011 Clarified legal basis.
            BR-A.2.9A 01/2011 Added reference to IIS Reporting Requirements
            BR-4A 01/2011 Added new Chapter on other reporting requirements and refer to IIS reporting requirements.
            BR-A.2.4 04/2011 Corrected order or wording.
            BR-1.1.3 04/2011 Added report on controllers required under paragraph GR-5.1.9.
            BR-1.2.3 and BR-3.1.10 04/2011 Clarified due date.
            BR-4.3.2 04/2011 Corrected reference to licensed exchange.
            BR-4.3.3 04/2011 Clarified reference to calendar days.
            BR-5.1.1, BR-5.1.2 and BR-5.1.3 04/2011 Clarified to whom Rules apply.
            BR-5.1.7 04/2011 Clarified due date for notification.
            BR-5.1.10 04/2011 Clarified reference to calendar days.
            BR-A.2.7, BR-3.3 and BR-4.1 07/2011 Clarified that all statistical returns must be filed monthly
            BR-1.1.3 (h) 07/2011 Deleted incorrect cross reference.
            BR-A.2.6 and BR-3.2.2 07/2011 Corrected reference for quarterly reporting by branches of foreign banks.
            BR-5.1.16 07/2011 Regulation under consultation.
            BR-5.1.17 07/2011 Added additional notification requirements.
            BR-A.2.5, BR-A.2.8A and BR-A.2.10 10/2011 Key requirements amended to reflect current reporting requirements.
            BR-A.2.12 10/2011 Clarified language to be in line with references in BR-5.3 and BC-4.7.
            BR-1.1.3 and BR-2.2 10/2011 Clarification of existing requirement for the Agreed Upon Procedures Report and setting a deadline for the submission of the report.
            BR-3.1.10 10/2011 This Paragraph was deleted as requirement is now part of Form PIR.
            BR-3.1.12 and BR-3.2.6 10/2011 New requirements for reporting of complaints in accordance with BC-9.7.1.
            BR-4.1.5 and BR-5.1.15 10/2011 Updated to reflect change in reporting requirement from ad-hoc to monthly.
            BR-6 10/2011 Updated Chapter to be consistent with other Volumes of the Rulebook.
            BR-6.1 and BR-6.4 01/2012 Added Sections to be consistent with other Volumes of the CBB Rulebook.
            BR-A.2.9A 04/2012 Corrected cross reference.
            BR-1.1.3 and BR-1.1.5 04/2012 Minor amendments.
            BR-1.2.3(d) and BR-1.2.3A 04/2012 Amended due date of head office's annual audited financial statements.
            BR-2.1.2 04/2012 Clarified what interim semi-annual statements are to be submitted by retail branches of foreign banks.
            BR-A.2.11 and BR-5.2.4 04/2012 Requirement for locally incorporated banks to consult with CBB prior to entering into any term borrowing arrangements.
            BR-5.1.4 and BR-5.1.5 04/2012 Paragraph BR-5.1.4 deleted and BR-5.1.5 amended as any changes to approved persons must receive CBB prior approval as per Paragraph LR-1A.1.23.
            BR-5.3.3 04/2012 Added cross reference to Section BC-6.1 on installation or removal of off-site ATM in Bahrain.
            BR-3.1.7 07/2012 Clarified the exemption status for requirements under Paragraph BR-3.1.6
            BR-5.1.11 07/2012 Added requirement to provide details of what authorised signatories are authorised to sign for.
            BR-4A.1.1 01/2013 Clarified deadline to update IIS.
            BR-1.1.3(i) and BR-1.1.3A 04/2013 Clarified due date for report on board meetings to be in line with Paragraph HC-1.3.8.
            BR-5.1.3 04/2013 Amended to clarify that CBB prior approval is required and also added requests for capital increases.
            BR-5.1.18 04/2013 Added requirement for CBB prior approval before exercising a call on a subordinated debt, in line with Paragraph CA-2.1.5A.
            BR-4A.2 07/2013 Added new Section on reporting requirements for internet security measures.
            BR-1.1.3(l), BR-1.2.3(f), BR-1.3, BR-4A.3 and BR-4A.4 01/2014 New reporting requirements added related to sound remuneration practices for banks.
            BR-4A.2.2 01/2014 Corrected cross reference.
            BR-5.1.7 01/2014 Added notification for any changes in financial instrument traders.
            BR-1.4 04/2014 Added requirement for all retail banks to submit the eligible accounts report for the deposits protection scheme.
            BR-2.2 04/2014 Added requirement for semi-annual report on private placements issued or promoted by banks.
            BR-5.1 04/2014 Amended notification requirements.
            BR-5.2 04/2014 Clarified Rules applicable to Bahraini conventional bank licensees pertaining to SPVs.
            BR-5.3.4 04/2014 Added notification requirement where retail banks receive funds from an NGO where no valid fund collection license was submitted.
            BR-1.3.1 07/2014 Changed due date for Details of remuneration paid report.
            BR-3.1.8A 07/2014 Added quarterly reporting requirements regarding interim financial statements as per 22 January 2014 ad hoc communication letter.
            BR-3.1.10 to BR-3.1.11A 07/2014 New quarterly reporting requirements added for details of large exposures and overseas subsidiaries and branches.
            BR-4A.3.1 07/2014 Noted exception to requirement to submit report on the bank's compliance with the remuneration rules.
            BR-1.1.3(e) 10/2014 Corrected terminology for reporting of restructured loans.
            BR-1.2.3 10/2014 Reference added to new reporting form Appendix BR-21 for non-performing and restructured loans.
            BR-2.3 10/2014 New Section added on semi-annual disclosure requirements for all branches of foreign banks.
            BR-3.1.8A 10/2014 Reference added to new form Appendix BR-20 for quarterly financial review.
            BR-5.1.18 and BR-5.2.8 10/2014 Clarified that this requirement applies to Bahraini conventional bank licensees, and not to all licensed banks.
            BR-2.1.3 01/2015 Corrected wording of Rule.
            BR-4A.2.1 01/2015 Clarified that Rule is applicable to all banks to be consistent with Section OM-6.2.
            BR-5.2.2 01/2015 Corrected cross reference and terminology.
            BR-5.2.7 to BR-5.2.11 01/2015 Rules and guidance transferred from Module PCD.
            BR-5.2.12 01/2015 Corrected cross reference.
            BR-2.2.4 04/2015 Amended deadline for submission of report on private placements to within three months of the reporting period.
            BR-3.1.7A 04/2015 Existing exemptions in respect of PIR review will cease as at 31st December 2014 for all Bahraini conventional bank licensees.
            BR-4A.3 07/2015 Amended Section to allow for CBB-approved consultancy firm to prepare report on the bank's compliance with the remuneration Rules outlined in Chapter HC-5.
            BR-A.2.3, BR-A.2.4, BR-1.1.2 and BR-1.2.2 04/2016 Clarified due date for financial statements.
            BR-1.1 04/2016 Added Rule regarding submission of draft year-end financial statements and attendance at CBB meeting with supervisory point of contact and external auditor.
            BR-1.1.3A 07/2016 Guidance provided on reporting requirements dealing with non-operational subsidiaries.
            BR-1.1.3B 07/2016 Paragraph renumbered.
            BR-1.1.5 07/2016 Requirements aligned with PD-1.2.6.
            BR-1.2.5 10/2016 Amended terminology of annual accounts
            BR-3.1.6 10/2016 Deleted repetition
            BR-1.1.3 04/2017 Added sub-paragraph (m) on CPD requirements.
            BR-1.2.3 04/2017 Added sub-paragraph (g) on CPD requirements.
            BR-4A.5 04/2017 Added a new Section on On-site Inspection Reporting.
            BR-1.1.3(k) 07/2017 Deleted sub paragraph (k) and relocated to BR-1.1.3C.
            BR-1.1.3B 07/2017 Amended wording of Paragraph.
            BR-1.1.3C 07/2017 Added new paragraph to amend submission deadline of agreed upon procedures report.
            BR-4A.4.1 07/2017 Amended submission deadline.
            BR-3.1.9A 10/2017 Added a new paragraph on submission of Largest Country Exposures.
            BR-1.2.3 07/2018 Amended Paragraph to clarify submission deadline.
            BR-5.1.7 07/2018 Deleted Paragraph.
            BR-1.1.3 10/2018 Added a new sub-paragraph (n) on the Financial Advice Programme/course.
            BR-1.2.3 10/2018 Added a new sub-paragraph (h) on the Financial Advice Programme/course.
            BR-1.1.3(e) 04/2019 Deleted sub-paragraph.
            BR-1.2.3(b) 04/2019 Deleted sub-paragraph.
            BR-2.3 04/2019 Deleted Section.
            BR Module 04/2019 Changed Locally incorporated to Bahraini Conventional Bank Licensees.
            BR-3.1.1 04/2019 Amended Paragraph.
            BR-3.1.7B 04/2019 Added a new Paragraph on Information required for Annual and Interim Financial Review.
            BR-3.2.5A 04/2019 Added a new Paragraph on Information required for Annual and Interim Financial Review.
            BR-A.2.10 07/2019 Deleted sub-paragraph (d).
            BR-4.3.5 07/2019 Added a new Paragraph on new form Appendix BR-23 for Liquidity Coverage Ratio (LCR) Reporting.
            BR-A.2.13 10/2019 Added a new Paragraph on licensees communications.
            BR-5.2.9 04/2020 Amended sub-paragraph (e).
            BR-5.2.9A 04/2020 Added a new Paragraph on SPV reporting.
            BR-5.2.9A 07/2020 Added a new sub-paragraph (c) on credit facilities granted to SPVs.
            BR-A.2.10 10/2020 Added a new sub-paragraph (k) on ad-hoc reporting and notification.

          • Effective Date

            • BR-A-3.4

              The contents in this Module are effective from the date shown at the foot of the page or from the date of changes shown in BR-A.3.3.

              October 07

      • BR-1 BR-1 Regular Reporting — Annual Requirements

        • BR-1.1 BR-1.1 Bahraini Conventional Banks Licensees

          • BR-1.1.1

            [This paragraph was deleted in April 2016.]

            Deleted: April 2016
            October 07

          • Annual Audited Financial Statements

            • BR-1.1.2

              All Bahraini Conventional Banks Licensees are required to submit to the CBB their annual audited financial statements within 3 months from the financial year end.

              Amended: April 2019
              Amended: April 2016
              Amended October 2010
              Amended January 2009
              Amended April 2008
              October 07

            • BR-1.1.2A

              All Bahraini Conventional Banks Licensees are required to submit to the CBB their draft year-end financial statements and must attend a meeting at the CBB with their supervisory point of contact (SPOC) and their external auditor to discuss such statements. The bank must obtain their audit committee's prior approval of the draft financial statements before submitting these to the CBB. Subsequent to the meeting with the CBB, the financial statements (subject to any adjustments) must be submitted to the Board for its approval and to the shareholders at the annual general meeting for ratification.

              Amended: April 2019
              Added: April 2016

          • Supplementary Information

            • BR-1.1.3

              In addition to the statements required in Paragraph BR-1.1.2, banks are also required to submit to the CBB the following information within 3 months of their financial year end:

              (a) The external auditors' management letter;
              (b) The audited accounts for the bank's ultimate holding company;
              (c) Audited financial statements of all subsidiaries (whether or not consolidated) and all overseas branches (including their accounting policies where these policies differ from those of the parent bank), along with their management letters;
              (d) The bank's group structure and the Bahrain office's internal organisation chart;
              (e) [This sub-paragraph was deleted in April 2019];
              (f) A list of subsidiaries, associated companies and affiliates of the bank, together with details of their locations and the amount of participation by the bank in these entities;
              (g) A reconciliation statement between the audited financial statements and the relevant prudential returns and monthly statistical returns;
              (h) [This Subparagraph was deleted in April 2013 and replaced with Paragraph BR-1.1.3B];
              (i) Report on controllers as required under Paragraph GR-5.1.9;
              (j) Any supplementary information required by the CBB;
              (k) [This Subparagraph was deleted in July 2017 and replaced with Paragraph BR-1.1.3C];
              (l) The remuneration agreed upon procedures as required under Paragraph BR-4A.3.1.
              (m) Report on the number of hours completed during the previous year in Continuous Professional Development (CPD) via CPD Form in Appendix BR-22 by the approved persons specifically board of directors and management as required under Paragraph TC-1.2.1.
              (n) Report listing the names of staff who attended the Financial Advice Programme/course; the names of staff who have successfully completed the courses; and members of staff who are required to undertake the course of study as required under Paragraph BC-11.1.1.
              Amended: April 2019
              Amended: October 2018
              Amended: July 2017
              Amended: April 2017
              Amended: July 2016
              Amended: October 2014
              Amended: January 2014
              Amended: April 2013
              Amended: April 2012
              Amended: October 2011
              Amended: July 2011
              Amended: April 2011
              Amended: October 2010
              January 2009
              October 07

            • BR-1.1.3A

              In instances where a bank has non-operational subsidiaries, the bank should contact its supervisory point of contact at the CBB to establish whether the requirements of Subparagraph BR-1.1.3(c) are applicable.

              Added: July 2016

            • BR-1.1.3B

              In accordance with Paragraph HC-1.3.8, banks must submit annually a report recording the board meetings held during the year. Such report must be submitted to the CBB, within 20 calendar days of the end of the reporting date, as an attachment to the year-end PIR. Reference should be made to Appendix BR-10, Board and Committee Meetings, under Part B/CBB Reporting Form of Volume 1 for a sample of such report.

              Amended: July 2017
              Amended: July 2016

            • BR-1.1.3C

              Banks are required to submit to the CBB an agreed upon procedures report concerning the annual disclosures required by Module PD, Section PD-1.3 and Chapter PD-6 (see also AU-3.2.3) within 4 months of their financial year end.

              Added: July 2017

          • Compliance

            • BR-1.1.4

              In addition to the provisions of Section AU-3.7, the audited financial statements or the annual report of these banks should be in full compliance with:

              (a) The International Financial Reporting Standards (IFRS); and
              (b) The disclosure requirements set out under Sections PD-1.2 and PD-1.3.
              Amended October 2010
              April 2008
              October 2007

          • Annual Report

            • BR-1.1.5

              Banks are reminded that they must submit a soft copy (electronic) of their full annual report to the CBB within 4 months of the end of their financial year (See PD-1.2.6).

              Amended: July 2016
              Amended: April 2012
              Amended: October 2010
              October 2009
              Added: January 2009

        • BR-1.2 BR-1.2 Branches of Foreign Banks

          • BR-1.2.1

            The content of this Section is applicable to branches (licensed by the CBB) of foreign banks.

            Amended: October 2010
            October 2007

          • Annual Audited Financial Statements

            • BR-1.2.2

              All branches, referred to under Paragraph BR-1.2.1, are required to submit to the CBB their annual audited financial statements of their Bahrain operations within 3 months from the financial year end. Such accounts must be prepared in a format agreed between the branch and its external auditor.

              Amended: April 2016
              Amended October 2010
              October 2007

          • Supplementary Information

            • BR-1.2.3

              In addition to the statements required in Paragraph BR-1.2.2, branches are also required to submit to the CBB within 3 months from their financial year end the following information:

              (a) The external auditor's management letter;
              (b) [This sub-paragraph was deleted in April 2019];
              (c) A reconciliation statement between the audited financial statements and the relevant prudential returns and monthly statistical returns;
              (d) [This Subparagraph was replaced by Paragraph BR-1.2.3A in April 2012];
              (e) A statement of provisions as set out in Paragraph BR-1.2.4, below; and
              (f) The remuneration agreed upon procedures as required under Paragraph BR-4A.3.1.
              (g) Report on the number of hours completed during the previous year in Continuous Professional Development (CPD) via CPD Form in Appendix BR-22 by the approved persons as required under Paragraph TC-1.2.1.
              (h) Report listing the names of staff who attended the Financial Advice Programme/course; the names of staff who have successfully completed the courses; and members of staff who are required to undertake the course of study as required under Paragraph BC-11.1.1.
              Amended: April 2019
              Amended: October 2018
              Amended: July 2018
              Amended: April 2017
              Amended: October 2014
              Amended: January 2014
              Amended: April 2012
              Amended: April 2011
              Amended October 2010
              October 2007

            • BR-1.2.3A

              Branches of foreign banks are also required to submit to the CBB the head office's Annual Report within 1 month of the date of publication and distribution by the head office.

              Added: April 2012

          • Provisions against Branch Assets in Head Office Books

            • BR-1.2.4

              If specific provisions against the assets of a branch are maintained in the books of its head office, the CBB should be advised on an annual basis and in writing (along with the information listed under Paragraph BR-1.2.3) of the amount of provisions set aside for the Bahrain branch's bad debts (and any other non-performing assets). For detailed guidance related to this subject, see Section CM-4.3.

              Amended October 2010
              October 2007

          • Compliance

            • BR-1.2.5

              The audited financial statements must be in full compliance with the International Accounting Standards (IAS) and International Financial Reporting Standards (IFRS).

              Amended October 2016
              Amended October 2010
              October 2007

        • BR-1.3 BR-1.3 All Banks

          • BR-1.3.1

            Banks must provide to the CBB details of total remuneration including the mix of fixed and variable remuneration as per Appendix BR-14. The report must be submitted annually and must be provided within 3 months of the financial year end.

            Amended: July 2014
            Added: January 2014

        • BR-1.4 BR-1.4 All Retail Banks

          • BR-1.4.1

            All conventional retail banks must submit to the CBB within two months of the financial year end, the eligible accounts report for the deposits protection scheme (Appendix BR-16) in accordance with the requirements of Paragraph CP-2.3.4B. Instructions for the completion of the report are included under Appendix BR-17.

            Added: April 2014

          • BR-1.4.2

            The report referred to under Paragraph BR-1.4.1 must be reviewed by the conventional retail bank's external auditor to confirm the accuracy of the data prior to its submission to the CBB (see Section AU-3.7).

            Added: April 2014

      • BR-2 BR-2 Regular Reporting — Semi-annual (Interim) Requirements

        • BR-2.1 BR-2.1 Retail Branches of Foreign Banks

          • BR-2.1.1

            The content of this Section is applicable only to retail branches (licensed by the CBB) of foreign banks.

            Amended October 2010
            October 2007

          • Financial Information

            • BR-2.1.2

              Branches (referred to under Paragraph BR-2.1.1) are required to submit to the CBB their reviewed semi-annual (interim) financial statements (in the same format as their Annual Audited Accounts) for their Bahrain operations within 2 months of the date of these statements.

              Amended: April 2012
              Amended: October 2010
              October 2007

          • Compliance

            • BR-2.1.3

              The statements mentioned under Paragraph BR-2.1.2 must be in compliance with the requirements set out under Section PD-2.1.

              Amended: January 2015
              Amended: April 2008
              October 07

        • BR-2.2 BR-2.2 Bahraini Conventional Bank Licensees

          • BR-2.2.1

            The content of this Section is applicable to all Bahraini Conventional Banks Licensees licensed by the CBB in the Kingdom of Bahrain.

            Amended: April 2019
            Added: October 2011

          • Compliance with Module PD

            • BR-2.2.2

              The financial statements mentioned under Paragraph BR-3.1.8 should be in compliance with the requirements set out under Section PD-3.1.

              Added: October 2011

            • BR-2.2.3

              In addition to the financial statements required in Paragraph BR-3.1.8, banks are also required to submit to the CBB the following information within two months of the end of the half-year:

              (a) A copy of the disclosures required by Paragraph PD-3.1.6; and
              (b) An agreed-upon procedures report concerning the completeness of disclosures required by Paragraph PD-3.1.6 (see also AU-3.2.4).
              Added: October 2011

          • Report on Private Placements

            • BR-2.2.4

              When acting as an issuer, promoter or manager of a private placement of securities, Bahraini conventional bank licensees must provide on a semi-annual basis to investors and the CBB a progress report on the private placement. The semi-annual reports are to be provided as of 30th June and 31st December and must be submitted to the investors and the CBB within three months of the reporting period.

              Amended: April 2015
              Added: April 2014

            • BR-2.2.5

              The reports referred to in Paragraph BR-2.2.4 are to be issued following the issuance or distribution of a PPM for the solicitation of funds from investors.

              Added: April 2014

            • BR-2.2.6

              The requirements for the report on private placements are in addition to any requirements outlined in Module OFS (Offering of Securities) under Volume 6 (Capital Markets).

              Added: April 2014

            • BR-2.2.7

              Bahraini conventional bank licensees may opt to issue the required report on a more frequent basis.

              Added: April 2014

            • BR-2.2.8

              The report required under Paragraph BR-2.2.4 must be issued for private equity purchases of existing companies as well as for real estate and other projects under development and must follow the requirements of Appendix BR-18 under Part B of Volume 1.

              Added: April 2014

        • BR-2.3 BR-2.3 [This Section was deleted in April 2019].

          • BR-2.3.1

            [This Paragraph was deleted in April 2019].

            Deleted: April 2019
            Added: October 2014

          • [This Subsection was deleted in April 2019].

            • BR-2.3.2

              [This Paragraph was deleted in April 2019].

              Deleted: April 2019
              Added: October 2014

      • BR-3 BR-3 Regular Reporting — Quarterly Requirements

        • BR-3.1 BR-3.1 Bahraini Conventional Bank Licensees

          • BR-3.1.1

            The content of this Section is applicable to all Bahraini Conventional banks licensed by the CBB in the Kingdom of Bahrain.

            Amended: April 2019
            Amended: October 2010
            October 2007

          • Prudential Information Returns

            • BR-3.1.2

              PIR Forms – All banks, referred to under Paragraph BR-3.1.1, must complete PIR forms (see Appendix BR-5), on a quarterly basis. This form is intended to be a financial report of the bank. Banks should therefore include on it all assets and liabilities of their head office and their branches in Bahrain and abroad and subsidiaries where applicable. Separate figures in respect of the head office or 'Bahrain operations' are not required.

              Amended October 2010
              January 09
              October 07

            • BR-3.1.3

              Please refer to the relevant International Accounting and Financial Reporting Standards for definitions, accounting and consolidation requirements applicable to subsidiaries.

              Amended October 2010
              January 09
              October 07

            • BR-3.1.4

              The forms referred to under Paragraphs BR-3.1.2 must be submitted to the CBB on a quarterly basis within 20 calendar days of the end of the reporting date.

              Amended October 2010
              October 2007

            • BR-3.1.5

              For guidance on completion of PIR, refer to guidelines under Appendix BR-4.

              Amended October 2010
              October 2007

            • BR-3.1.6

              The CBB requires all banks to request their external auditor to conduct a review of the prudential returns on a quarterly basis. The results of such review (in the form of an Agreed Upon Procedures report as shown in Appendix BR 9) must be submitted to the CBB no later than 2 months from the end of the subject quarter.

              Amended October 2016
              Amended October 2010
              January 09
              October 07

            • BR-3.1.7

              Banks which demonstrate to the satisfaction of the CBB that they have fulfilled all of the CBB's requirements with regard to Prudential Returns for at least two consecutive quarters may apply (in writing) to the CBB for an exemption from the review procedure set out in Paragraph BR-3.1.6 above. Such exemption may be withdrawn by the CBB at any time, should errors be detected.

              Amended: July 2012
              Amended: October 2010
              October 2007

            • BR-3.1.7A

              For Bahraini conventional bank licensees, all existing exemptions in respect of PIR review as at 31st December 2014 will cease.

              Added: April 2015

          • Information required for Annual and Interim Financial Review

            • BR-3.1.7B

              All banks, referred to under Paragraph BR-3.1.1 are required to complete Information required for Annual and Interim Financial Review Form which includes a list of non-performing and restructured loans (including name of customer, country, amount outstanding, net interest income for the period attributed to profit & loss and the reasons for attributing interest to income) at the end of each calendar quarter no later than 10 days (for Retail banks) and no later than 20 days (for Wholesale banks) of the date of the quarterly statements. The information must be provided in accordance with Appendix BR-20.

              Added: April 2019

          • Financial Information

            • BR-3.1.8

              All banks, referred to under Paragraph BR-3.1.1, are required to submit to the CBB reviewed (unaudited) quarterly financial statements (in the same format as their Annual Audited Accounts) on a quarterly basis (within 2 months of the date of these statements).

              Amended October 2010
              October 2007

            • BR-3.1.8A

              All Bahraini conventional bank licensees must submit to the CBB at least one week prior to the intended publication date and before their board of directors' meeting to discuss the interim financial statements, the following documents:

              (a) Draft interim financial statements; and
              (b) The quarterly financial review in accordance with Appendix BR-20.
              Amended: October 2014
              Added: July 2014

          • Compliance

            • BR-3.1.9

              The statements mentioned under Paragraph BR-3.1.8 should be in compliance with the requirements set out under Section PD-3.1.

              Amended: April 2011
              October 07

          • Largest Country Exposures

            • BR-3.1.9A

              All Bahraini conventional bank licensees must submit to the CBB details of their largest country exposures on a consolidated basis through Electronic Submission of Returns and Analysis of Data (ESRAD). This report must be submitted to the CBB within 20 calendar days of the end of the relevant quarter.

              Added: October 2017

          • Large Exposures Report

            • BR-3.1.10

              All Bahraini conventional bank licensees must submit to the CBB details of their large exposures in accordance with Appendix BR-19. This report must be submitted to the CBB within 20 calendar days of the end of the relevant quarter.

              Amended: July 2014
              Deleted: October 2011
              Amended: April 2011
              Amended October 2010
              October 2007

          • Overseas Banking Subsidiaries and Branches

            • BR-3.1.11

              All Bahraini conventional bank licensees must submit to the CBB details of their overseas banking subsidiaries and branches in accordance with Appendix BR-8. This report must be submitted to the CBB within one month of the end of the relevant quarter.

              Amended: July 2014
              Amended October 2010
              July 2009
              October 2007

          • Non-Banking Subsidiaries

            • BR-3.1.11A

              All Bahraini conventional bank licensees must submit to the CBB reviewed statement of financial position and income statement of their non-banking subsidiaries. If reviewed statements are unavailable, management accounts will be accepted by the CBB. These statements are to be submitted within one month of the end of the relevant quarter.

              Added: July 2014

          • Reporting of Complaints

            • BR-3.1.12

              In accordance with Paragraph BC-9.7.1, all banks must submit to the CBB Compliance Directorate, 20 days after the end of the quarter, a report on complaints.

              Added: October 2011

        • BR-3.2 BR-3.2 Branches of Foreign Banks

          • BR-3.2.1

            The content of this Section is applicable to branches (licensed by the CBB) of foreign banks.

            Amended: October 2010
            October 2007

          • Prudential Information Returns

            • BR-3.2.2

              All branches, referred to under Paragraph BR-3.2.1, are required by the CBB to complete PIR forms (see Appendix BR-5) in accordance with guidelines set out under Appendix BR-3.

              Amended: July 2011
              Amended: October 2010
              October 2007

            • BR-3.2.3

              These should be submitted to the CBB no later than 20 calendar days from the end of the said quarter.

              Amended: October 2010
              October 2007

            • BR-3.2.4

              The CBB requires all banks to request their external auditor to conduct a review of the prudential returns on a quarterly basis. The results of such review (in the form of a return review report) should be submitted to the CBB no later than 2 months from the end of the subject quarter. A bank may apply for exemption from this requirement provided that it meets the criteria set out under Paragraph BR-3.2.5 below.

              Amended: October 2010
              October 2007

            • BR-3.2.5

              Banks which demonstrate to the satisfaction of the CBB that they have fulfilled all of the CBB's requirements with regard to Prudential Returns for at least two consecutive quarters may apply (in writing) to the CBB for an exemption from the review procedure set out in Paragraph BR-3.2.4 above.

              Amended: October 2010
              October 2007

          • Information required for Annual and Interim Financial Review

            • BR-3.2.5A

              All branches, referred to under Paragraph BR-3.2.1 are required to complete Information required for Annual and Interim Financial Review Form which includes a list of non-performing and restructured loans (including name of customer, country, amount outstanding, net interest income for the period attributed to profit & loss and the reasons for attributing interest to income) for their Bahrain operations at the end of each calendar quarter no later than 10 days (for Retail branches) and no later than 20 days (for Wholesale branches) of the date of the quarterly statements. The information must be provided in accordance with Appendix BR-20.

              Added: April 2019

          • Reporting of Complaints

            • BR-3.2.6

              In accordance with Paragraph BC-9.7.1, all banks must submit to the CBB Compliance Directorate, 20 days after the end of the quarter, a report on complaints.

              Added: October 2011

        • BR-3.3 BR-3.3 [deleted]

          [This Section was deleted in July 2011].

          • BR-3.3.1 [deleted]

            Deleted: July 2011

          • [deleted]

            Deleted: July 2011

            • BR-3.3.2 [deleted]

              Deleted: July 2011

            • BR-3.3.3 [deleted]

              Deleted: July 2011

      • BR-4 BR-4 Regular Reporting — Monthly Requirements

        • BR-4.1 BR-4.1 All Licensed Banks

          • BR-4.1.1

            The content of this Section is applicable to all banks (or as stated otherwise) licensed by the CBB in the Kingdom of Bahrain.

            Amended: October 2010
            October 2007

          • Statistical Returns

            • BR-4.1.2

              All banks, referred to under Paragraph BR-4.1.1, are required to submit to the CBB (Financial Stability Directorate) the following monthly statistical returns:

              (a) Form SR-1 – 'Monthly Balance Sheet';
              (b) Form SR-2 – 'Monthly Classification of Deposits and Other Liabilities to Banks and Non-banks';
              (c) Form SR-3 – 'Monthly Balance Sheet by Country and Class of Customer';
              (d) Form SR-4 – 'Monthly Balance Sheet by Currency'; and
              (e) Form SR-5 – 'Monthly Classification of Loans and Advances to Domestic Non-banks'; and
              (f) Form SR-6 – Monthly Survey of BD Interest Rates on Deposits and Loans (applicable to retail banks only).

              (For instructions relating to the completion of the above mentioned returns, refer to Appendix BR-1 and for returns forms refer to Appendix BR-2).

              Amended: July 2011
              Amended: October 2010
              October 2007

            • BR-4.1.3

              The returns included in Appendix BR-2 should be submitted to the CBB in electronic form (Excel spreadsheet) via email to erdsr@cbb.gov.bh no later than the 10th of the month following the end of the relevant month. One printed copy should also be delivered to the Financial Stability Directorate by the same date.

              Amended: October 2010
              October 2007

          • Precious Metals and Commodities Returns

            • BR-4.1.4

              [This Paragraph deleted with effect from 1 July 2006].

              October 07

          • Reserve Requirements

            • BR-4.1.4A

              The Banking Services Directorate will calculate the reserve requirement of each conventional bank licensee bank on a monthly basis using the figures reported in the monthly statistical report, Form SR-2 (see Rule BR-4.1.2 above) and will notify each bank of its required reserve (if any).

              Amended: July 2011
              October 07

            • BR-4.1.4B

              The monthly reserve requirements will be calculated as 5% of the total of a conventional bank licensee's BD deposits from non-banks and the BD Certificates of Deposit that it has issued to customers.

              Amended July 2011
              Amended July 2009
              Amended April 2008
              October 07

            • BR-4.1.4C

              Reserve requirements, because of their scope of coverage (cf. Rule BR-4.1.4B), generally only apply to retail banks. They may apply, however, to wholesale banks, if they undertake on-shore business (cf. Section LR-1.2).

              Amended: July 2011
              October 07

          • Accounts for Charity Organisations

            • BR-4.1.5

              All banks, referred to under Paragraph BR-4.1.1, must report to the CBB all payments and transfers of funds amounting to BD 3,000 or above (or equivalent in other currencies) from accounts held by the bank for charitable organisations registered in the Kingdom of Bahrain (also see Paragraph FC-1.6.4). Such report must include details of amount transferred, account name and number, and beneficiary (name and location).

              Added: October 2011

        • BR-4.2 Full Commercial Banks [This Section deleted 07/2006]

        • BR-4.3 BR-4.3 Bahraini Conventional Bank Licensees

          • BR-4.3.1

            The content of this Section is only applicable to Bahraini Conventional Banks Licensees.

            Amended: April 2019
            October 07

          • Directors' Interests in the Shares of Locally Incorporated Banks Listed on the Bahrain Stock Exchange

            • BR-4.3.2

              All locally incorporated banks listed on a licensed exchange are required to report to the Capital Markets Supervision Directorate of the CBB the following information, on a monthly basis, relating to their Directors:

              (a) The number and type of interests of each Director in the shares (i.e. whether by shareholding, options etc.) of all such banks in which the respective Directors have interests in and the rights associated with such interests;
              (b) The date on which, and manner in which, such interests were acquired or disposed of (as the case may be);
              (c) The acquisition price paid, or disposal price received, for such interests; and
              (d) The person(s) from, or to, whom the interests in such shares were acquired or disposed (as the case may be).
              Amended: April 2011
              Amended: October 2010
              October 2007

            • BR-4.3.3

              The information required in Paragraph BR-4.3.2 above should be submitted to the CBB no later than 15 calendar days following the end of the relevant month.

              Amended: April 2011
              Amended: October 2010
              October 2007

          • Exposures to Connected Counterparties

            • BR-4.3.4

              All banks, referred to under Paragraph BR-4.3.1, are required to submit to the CBB their exposures to connected parties on a monthly basis on the fourth working day of the month.

              (For instructions relating to the reporting of the above mentioned exposures, refer to Appendix BR-12 and for the concerned reporting forms refer to Appendix BR-11).

              Amended: October 2010
              Adopted: October 2009

          • Liquidity Coverage Ratio

            • BR-4.3.5

              Bahraini conventional bank licensees must submit their "solo" LCR to the CBB within 7 calendar days following the month end, and their consolidated LCR within 14 calendar days following the month end (see Appendix BR-23) through Electronic Submission of Returns and Analysis of Data (ESRAD).

              Added: July 2019

      • BR-4A BR-4A Other Reporting Requirements

        • BR-4A.1 BR-4A.1 IIS Reporting Requirements

          • Institutional Information System (IIS)

            • BR-4A.1.1

              All banks licensed by the CBB are required to complete online non-financial information related to their institution by accessing the CBB's institutional information system (IIS). Banks must update the required information at least on a quarterly basis or when a significant change occurs in the non-financial information included in the IIS. If no information has changed during the quarter, the bank must still access the IIS quarterly and confirm the information contained in the IIS. Licensees must ensure that they access the IIS within 20 calendar days from the end of the related quarter and either confirm or update the information contained in the IIS.

              Amended: January 2013
              Added: January 2011

            • BR-4A.1.2

              Banks failing to comply with the requirements of Paragraph BR-4A.1.1 or reporting inaccurate information are subject to financial penalties or other enforcement actions as outlined in Module (EN) Enforcement.

              Added: January 2011

        • BR-4A.2 BR-4A.2 Internet Security Measures

          • BR-4A.2.1

            In accordance with Section OM-6.2, all banks providing internet banking services must regularly test their systems against security breaches and submit the vulnerability assessment report to the CBB.

            Amended: January 2015
            Amended: July 2014
            Added: July 2013

          • BR-4A.2.2

            The report referred to under Paragraph BR-4A.2.1 must be conducted in accordance with Section OM-6.2 and submitted to the CBB twice a year, within two months following the end of the month where the testing took place, i.e. for the June test, the report must be submitted at the latest by 31st August and for the December test, by 28th February.

            Amended: January 2014
            Added: July 2013

        • BR-4A.3 BR-4A.3 Compliance with Remuneration Rules under Module HC

          • BR-4A.3.1

            Unless specifically excluded in accordance with Paragraph AU-3.6.3, every conventional bank licensee must submit to the CBB within three months from the financial year-end, a report as to the bank's compliance with the remuneration Rules outlined in Chapter HC-5.

            Amended: July 2014
            Added: January 2014

          • BR-4A.3.1A

            Where a conventional bank licensee is not required to provide a report under Paragraph BR-4A.3.1, it must submit a notification to the CBB once it has been determined that it is excluded to file such report as per Paragraph AU-3.6.3.

            Added: July 2014

          • BR-4A.3.2

            The report required under Paragraph BR-4A.3.1 must be prepared by the bank's external auditor or a consultancy firm approved by the CBB.

            Amended: July 2015
            Added: January 2014

          • BR-4A.3.2A

            For a consultancy firm to be approved by the CBB for purposes of this Section, the conventional bank licensee should communicate with the CBB's supervisory point of contact for seeking the CBB's prior written approval.

            Added: July 2015

          • BR-4A.3.3

            The format of the Report required under Paragraph BR-4A.3.1 is included in Part B of the Rulebook as Appendix HC-(i), as part of the Supplementary Information.

            Amended: July 2015
            Added: January 2014

        • BR-4A.4 BR-4A.4 Remuneration of Top 12 Employees

          • BR-4A.4.1

            Banks must complete Appendix BR-15, details of their top 12 highly remunerated employees annually for each financial year. This report is to be completed by the bank within three months from the end of the period covered and kept at the bank's premises and provided to the CBB, upon request.

            Amended: July 2017
            Added: January 2014

        • BR-4A.5 BR-4A.5 Onsite Inspection Reporting

          • BR-4A.5.1

            For the purpose of onsite inspection by the CBB, conventional bank licensees must submit requested documents and completed questionnaires to the Inspection Directorate at the CBB three working days ahead of inspection team entry date.

            Added: April 2017

          • BR-4A.5.2

            Conventional bank licensees must review the contents of the draft Inspection Report and submit to the Inspection Directorate at the CBB a written assessment of the observations/issues raised within ten working days of receipt of such report. Evidentiary documents supporting management's comments must also be included in the response package.

            Added: April 2017

          • BR-4A.5.3

            Conventional bank licensees' board are required to review the contents of the Inspection Report and submit within one month, of the report issue date, a final response to such report along with an action plan addressing the issues raised within the stipulated timeline.

            Added: April 2017

          • BR-4A.5.4

            Banks failing to comply with the requirements of Paragraphs BR-4A.5.1 and BR-4A.5.2 are subject to date sensitive requirements and other enforcement actions as outlined in Module (EN) Enforcement.

            Added: April 2017

      • BR-5 BR-5 Ad-hoc Reporting and Notification

        • BR-5.1 BR-5.1 All Licensed Banks

          • BR-5.1.1

            The content of this Section is applicable to all banks, except as otherwise mentioned, (licensed by the CBB) in the Kingdom of Bahrain.

            Amended: April 2011
            Amended: October 2010
            October 2007

          • Large Exposures

            • BR-5.1.2

              Should any locally incorporated bank find that, for reasons outside its control or otherwise, it has an exposure to an individual counterparty (other than an exempt exposure) which results in it exceeding any of the limits set out under Chapter CM-5, this should be reported immediately to the CBB for its consideration, and action should be taken immediately to bring the exposure back within applicable limits as soon as possible.

              Amended: April 2011
              Amended: October 2010
              October 2007

          • Capital Increases, Changes in Strategy and Establishment of Subsidiaries/SPVs

            • BR-5.1.3

              [This Paragraph was moved to Section BR-5.2]

              Amended: April 2014
              Amended: April 2013
              Amended: April 2011
              Amended: October 2010
              October 2007

          • Current Management and Changes thereto

            • BR-5.1.4

              [This Paragraph was deleted in April 2012].

              Deleted: April 2012

            • BR-5.1.5

              The CBB must also be notified of any changes to the positions mentioned under Paragraph LR-1A.1.2 that may occur from time to time subject to observing the requirements set out in Section LR-1A.1. (See also Paragraph LR-1A.1.22).

              Amended: April 2014
              Amended: April 2012
              Amended: October 2010
              October 2007

            • BR-5.1.6

              For detailed rules and guidance on prior notification of appointment and changes in management inventory, refer to Chapters HC-1 and LR-1A.

              Amended: October 2010
              October 2007

          • Changes in Dealing Staff

            • BR-5.1.7

              [This Paragraph was deleted in July 2018].

              Deleted: July 2018

          • Appointment of a Compliance Manager/Officer

            • BR-5.1.8

              The appointment of a compliance manager/officer requires the CBB's prior approval (refer to Section LR-1A.1 for full details). The bank must outline how the compliance function fits into the bank's senior management reporting structure, and must give details of relevant reporting lines within the bank.

              Amended: April 2014
              Amended: October 2010
              October 2007

          • Money Laundering and Suspicious Transactions

            • BR-5.1.9

              The Money Laundering Reporting Officer (or his/her duly authorised delegate) must send a report to the Compliance Directorate of the CBB where he/she knows or has suspicions that a transaction might involve money laundering or terrorist financing, either due to the customer's economic standing or because it meets one of the examples of suspicious transactions described in Appendix FC-3.

              October 07

          • Promotion of Financial Products and Services Offered in/from Bahrain by Mean of Incentives etc.

            • BR-5.1.10

              The CBB should be sent copies of documentation relating to promotional schemes at least ten calendar days prior to their launch for information purposes. Refer to Chapter BC-1 for more details.

              Amended: April 2011
              Amended: October 2010
              October 2007

          • Authorised Signatories

            • BR-5.1.11

              In order to maintain an up-to-date record of authorised signatories of respective banks, the CBB requires all banks to submit to the bank's CBB supervisory point of contact a list of specimen signatures (and changes to it from time to time) of the officials authorised to sign on behalf of the concerned bank, together with, where appropriate, details of what they are authorised to sign for.

              Amended: July 2012
              Amended: October 2010
              October 2007

          • UN SCR 1373 (2001)

            • BR-5.1.12

              The CBB requires all banks to notify it immediately of any act that might contravene the provisions of UN Security Council Resolution 1373 (2001). Banks should refer to Chapter FC-8 for full details of this requirement.

              Amended: October 2010
              October 2007

          • Notification of Fraud or other Material Concerns

            • BR-5.1.13

              All banks must report immediately to the CBB any frauds, either attempted or realised, or any well-founded concerns about the integrity of individual Directors or members of management. This obligation to disclose extends to individual Board members and members of management: i.e. if a Director or member of management has reasonable grounds to believe that information that should have been reported to the CBB has not, then they have a duty to report the matter personally to the CBB. All such cases shall be treated in the strictest confidence by the CBB.

              Amended: October 2010
              October 2007

            • BR-5.1.14

              All banks must report immediately to the CBB any material losses as soon as the bank becomes aware of them. This notification requirement is separate from notifications for loan write-offs (see BR-5.2.3) or frauds (see above), but refers to losses caused by external events (e.g. falls in stock markets) or internal control failures. In this context 'material' would mean: a loss which exceeds 5% of net earnings in a given quarter; or a loss which reduces the bank's capital adequacy by more than 1%; or a loss which reduces total assets by more than 1%.

              Amended: October 2010
              October 2007

          • Accounts for Charity Organisations

            • BR-5.1.15

              [This requirement was moved in October 2011 to Paragraph BR-4.1.5 as it is a monthly requirement].

              Amended: October 2011
              Amended: October 2010
              October 2007

          • Business Transfers

            • BR-5.1.16

              All banks must refer to Section GR-4.1 on business transfer requirements.

              Amended: April 2014
              Amended: July 2011
              Added: April 2010

          • Other Notifications

            • BR-5.1.17

              Banks must inform the CBB, in writing, of the following:

              (a) Any material problems or changes encountered with an outsourcing provider (ref. OM-3.3.4);
              (b) Any proposed ownership changes (whether in terms of structure or identity of controllers) prior to the change taking place and any change in controllers as a result of circumstances outside the bank's knowledge and/or control (ref GR-5.1.7); and
              (c) Any dismissal or suspension of any staff in internal audit, risk management, AML, compliance function or internal Shari'a review of the bank. The notification must include the reason for the dismissal or suspension of such individual.
              Amended: April 2014
              Added: July 2011

            • BR-5.1.17A

              Should the CBB have a cause for concern following its review of the notification referred to under Subparagraph BR-5.1.17(c), it may investigate the matter and should it establish the existence of any irregularity, misconduct or unfair decisions, it may take enforcement action on the bank, including an adverse action on the fit and proper status of the person(s) responsible.

              Added: April 2014

          • Settlement of Subordinated Loan

            • BR-5.1.18

              [This Paragraph was moved to Paragraph BR-5.2.12.]

              Amended: October 2014

        • BR-5.2 BR-5.2 Bahraini Conventional Banks

          • BR-5.2.1

            The content of this Section is applicable to all Bahraini conventional bank licensees licensed by the CBB in the Kingdom of Bahrain.

            Amended: April 2014
            Amended: October 2010
            October 2007

          • Capital Adequacy

            • BR-5.2.2

              All banks, referred to under Paragraph BR-5.2.1, must give the CBB immediate written notification of any actual breach by such banks of the minimum capital adequacy ratio (CAR) in accordance with Section CA-1.2. Where such notification is given, the bank must also adhere to the additional notification and reporting requirements as set out under Section CA-1.2.

              Amended: January 2015
              Amended: October 2010
              October 2007

          • Write-offs

            • BR-5.2.3

              All banks must notify the CBB of any write-off of a credit facility in excess of BD100,000 (or equivalent in other currencies) and must obtain the CBB's prior approval for write-offs concerning certain parties connected to the concerned bank or other entities (see Section CM-7.1 for full details).

              Amended: July 2012
              Amended: April 2008
              October 07

          • Term Financing Commitments

            • BR-5.2.4

              All banks must consult with the CBB before they enter into any term borrowing facilities or programs which have any restrictive covenants in relation to the capital or activities of the bank (such as the capital adequacy ratio, capital amount, leveraging, compliance with certain regulatory requirements, etc). For the sake of expediting the CBB's reaction to such consultations, banks must submit the draft term sheet of the facility to the Banking Supervision director at the CBB responsible for the supervision of the concerned bank, before committing themselves to the concerned facility (or renewing it).

          • Capital Increases, Changes in Strategy and Establishment of Subsidiaries/SPVs

            • BR-5.2.5

              All Bahraini conventional bank licensees must obtain the CBB's prior written approval for the opening of any new place of business either in the Kingdom of Bahrain or abroad (this would include the establishment or acquisition of a subsidiary, new branches or representative offices). Bahraini conventional bank licensees should refer to Article 51 of the CBB Law 2006 for full details.

              Added: April 2014

            • BR-5.2.6

              All Bahraini conventional bank licensees must obtain the CBB's prior written approval for any proposed capital increase in any related SPV and for all major changes (regardless of type and/or effect) to strategy or corporate plan prior to implementation (See also Paragraph HC-1.2.6).

              Added: April 2014

            • BR-5.2.7

              All Bahraini conventional bank licensees must obtain the CBB's prior specific written approval if they intend to act as originator, sponsor or manager of a special purpose vehicle ('SPV'), or if they intend to participate in the creation of an SPV, or if they intend to acquire a holding of 20% or more of the equity capital of an SPV. All Bahraini conventional bank licensees must seek prior specific written CBB approval if they are appointed as nominee shareholders of SPVs or hold votes by proxy arrangement in SPVs on behalf of other investors.

              Amended: January 2015
              Added: April 2014

            • BR-5.2.9A

              In addition to the points noted in BR-5.2.9, Bahraini conventional bank licensees which are involved with SPVs in any of the relationships described in Paragraph BR-5.2.7 must:

              (a) Not allow the SPVs to give any type of financial guarantee, warranty or indemnity to the investors in the SPVs or any other counterparty, either directly or on behalf of the bank.
              (b) Ensure that there are no legal or other restrictions on the availability of financial and other information relevant to the SPV and access to its business premises and records.
              (c) Not provide any credit facilities to the SPVs and/or extend any financial/liquidity support and/or guarantees.
              Amended: July 2020
              Added: April 2020

            • BR-5.2.8

              For purposes of Paragraph BR-5.2.7, in order to avoid any delays and/or disruption in implementation of a Bahraini conventional bank licensee's plan in this context, the CBB should be approached as soon as possible, even at a very preliminary stage.

              Added: January 2015

            • BR-5.2.9

              The CBB requires any Bahraini conventional bank licensee associated with an SPV to confirm the following points in any request for approval under Paragraph BR-5.2.7:

              (a) The purpose of the SPV;
              (b) The nature of the relationship between the Bahraini conventional bank licensee and the SPV (i.e. originator, sponsor, manager, investor, controller etc.);
              (c) The proposed consolidation/accounting treatment of the SPV in relation to the Bahraini conventional bank licensee both for the PIR and the audited financial statements' purposes as agreed with its external auditor;
              (d) The availability of financial and other information relevant to the SPV and access to its business premises and records; and
              (e) The Bahraini conventional bank licensee is not providing any guarantees, warranties or financial/liquidity support of any kind to the SPV.
              Amended: April 2020
              Added: January 2015

            • BR-5.2.10

              Where the SPV is consolidated into the accounts of a Bahraini conventional bank, the bank must provide separate accounting information on the SPV to the CBB on a quarterly basis. Furthermore, the annual audited financial statements of all consolidated SPVs must be submitted to the CBB within 3 months of the year end of the concerned SPV.

              Added: January 2015

            • BR-5.2.11

              Where a Bahraini conventional bank has a controller or majority ownership relationship with an SPV, or acts as sponsor, the bank must obtain the prior written approval of the CBB for any changes to the capital, ownership, management or control of SPV. All Bahraini conventional banks must also notify the CBB of any material events in relation to the SPV. If necessary, the CBB may require that formal information exchange arrangements are put in place (e.g. a memorandum of understanding) if the SPV is located in a foreign jurisdiction and its activities are not supervised locally.

              Added: January 2015

          • Early Settlement of Capital Items

            • BR-5.2.12

              In accordance with Paragraph CA-2.1.6(e) and (g) and CA-2.1.10(e), Bahraini conventional bank licensees must seek the CBB's prior written approval before exercising a call on an additional Tier one or Tier two capital issue, partially or in full, prior to the end of its term.

              Amended: January 2015
              Added: October 2014

        • BR-5.3 BR-5.3 Retail Banks

          • BR-5.3.1

            The content of this Section is only applicable to retail banks licensed by the CBB in the Kingdom of Bahrain.

            Amended: October 2010
            October 2007

          • Introduction of New or Expanded Customer Products and Facilities

            • BR-5.3.2

              All banks, referred to under Paragraph BR-5.3.1, should notify the CBB of information relating to any new or expanded customer products and facilities in accordance with the requirements set out under Section BC-4.7.

              Amended: October 2010
              October 2007

          • Installation or Removal of Off-site ATM in Bahrain

            • BR-5.3.3

              In accordance with Section BC-6.1, all banks referred to under Paragraph BR-5.3.1, must seek the CBB's prior approval if it wishes to install or remove an off-site ATM in Bahrain.

              Added: April 2012

          • Funds Received from NGO where no Valid Funds Collection License

            • BR-5.3.4

              In accordance with Paragraph BC-4.11.3, retail banks must notify the CBB in instances where donated funds have been received by an NGO and no valid funds collection license was submitted.

              Added: April 2014

      • BR-6 BR-6 Information Gathering by the CBB

        • BR-6.1 BR-6.1 Power to Request Information

          • BR-6.1.1

            In accordance with Article 111 of the CBB Law, banks must provide all information that the CBB may reasonably request in order to discharge its regulatory obligations.

            Added: January 2012

          • BR-6.1.2

            Banks must provide all relevant information and assistance to the CBB inspectors and appointed experts on demand as required by Articles 111 and 114 of the CBB Law. Failure by banks to cooperate fully with the CBB's inspectors or appointed experts, or to respond to their examination reports within the time limits specified, will be treated as demonstrating a material lack of cooperation with the CBB which will result in other enforcement measures being considered, as described elsewhere in Module EN. This rule is supported by Article 114(a) of the CBB Law.

            Added: January 2012

          • BR-6.1.3

            Article 163 of the CBB Law provides for criminal sanctions where false or misleading statements are made to the CBB or any person /appointed expert appointed by the CBB to conduct an inspection or investigation on the business of the licensee or the listed licensee.

            Added: January 2012

          • Information Requested on Behalf of other Supervisors

            • BR-6.1.4

              The CBB may ask banks to provide it with information at the request of or on behalf of other supervisors to enable them to discharge their functions properly. Those supervisors may include overseas supervisors or government agencies in Bahrain. The CBB may also, without notifying a bank, pass on to those supervisors or agencies information that it already has in its possession.

              Added: January 2012

        • BR-6.2 BR-6.2 Access to Premises

          • BR-6.2.1

            In accordance with Article 114 of the CBB Law, all licensed banks must permit representatives of the CBB, or appointed experts, access, with or without notice, to any of its business premises in relation to the discharge of the CBB's functions under the relevant law.

            Amended: October 2011
            October 2007

          • BR-6.2.2

            A bank must take reasonable steps to ensure that its agents and providers under outsourcing arrangements permit such access to their business premises, to the CBB.

            Added: October 2011

          • BR-6.2.3

            A bank must take reasonable steps to ensure that each of its providers under material outsourcing arrangements deals in an open and cooperative way with the CBB in the discharge of its functions in relation to the bank.

            Added: October 2011

          • BR-6.2.4

            The cooperation that banks are expected to procure from such providers is similar to that expected of banks themselves.

            Added: October 2011

        • BR-6.3 BR-6.3 Accuracy of Information

          • BR-6.3.1

            Banks must take reasonable steps to ensure that all information they give the CBB is:

            (a) Factually accurate or, in the case of estimates and judgements, fairly and properly based after appropriate enquiries have been made by the bank; and
            (b) Complete, in that it should include anything of which the CBB would reasonably expect notice.
            Added: October 2011

          • BR-6.3.2

            If a bank becomes aware, or has information that reasonably suggests that it has or may have provided the CBB with information that was or may have been false, misleading, incomplete or inaccurate, or has or may have changed in a material way, it must notify the CBB immediately. The notification must include:

            (a) Details of the information which is or may be false, misleading, incomplete or inaccurate, or has or may have changed;
            (b) An explanation why such information was or may have been provided; and
            (c) The correct information.
            Added: October 2011

          • BR-6.3.3

            If the information in Paragraph BR-6.3.2 cannot be submitted with the notification (because it is not immediately available), it must instead be submitted as soon as possible afterwards.

            Added: October 2011

        • BR-6.4 BR-6.4 Methods of Information Gathering

          • BR-6.4.1

            The CBB uses various methods of information gathering on its own initiative which require the cooperation of banks:

            (a) Representatives of the CBB may make onsite visits at the premises of the bank. These visits may be made on a regular basis, on a sample basis, for special purposes such as theme visits (looking at a particular issue across a range of banks), or when the CBB has a particular reason for visiting a bank;
            (b) Appointees of the CBB may also make onsite visits at the premises of the bank. Appointees of the CBB may include persons who are not CBB staff, but who have been appointed to undertake particular monitoring activities for the CBB, such as in the case of appointed experts (refer to Section BR-6.5).
            (c) The CBB may request the bank to attend meetings at the CBB's premises or elsewhere;
            (d) The CBB may seek information or request documents by telephone, at meetings or in writing, including electronic communication;
            (e) The CBB may require banks to submit various documents or notifications, as per Chapter BR-5, in the ordinary course of their business such as financial reports or on the happening of a particular event in relation to the bank such as a change in control.
            Added: January 2012

          • BR-6.4.2

            When seeking meetings with a bank or access to the bank's premises, the CBB or the CBB appointee needs to have access to a bank's documents and personnel. Such requests will be made during reasonable business hours and with proper notice. There may be instances where the CBB may seek access to the bank's premises without prior notice. While such visits are not customary, the prospect of unannounced visits is intended to encourage banks to comply at all times with the requirements and standards imposed by the CBB as per legislation and Volume 1 of the CBB Rulebook.

            Added: January 2012

          • BR-6.4.3

            The CBB considers that a bank should:

            (a) Make itself readily available for meetings with representatives or appointees of the CBB;
            (b) Give representatives or appointees of the CBB reasonable access to any records, files, tapes or computer systems, which are within the bank's possession or control, and provide any facilities which the representatives or appointees may reasonably request;
            (c) Produce to representatives or appointees of the CBB specified documents, files, tapes, computer data or other material in the bank's possession or control as reasonably requested;
            (d) Print information in the bank's possession or control which is held on computer or otherwise convert it into a readily legible document or any other record which the CBB may reasonably request;
            (e) Permit representatives or appointees of the CBB to copy documents of other material on the premises of the bank at the bank's expense and to remove copies and hold them elsewhere, or provide any copies, as may be reasonably requested; and
            (f) Answer truthfully, fully and promptly all questions which representatives or appointees of the CBB reasonably put to it.
            Amended: July 2012
            Added: January 2012

          • BR-6.4.4

            The CBB considers that a bank should take reasonable steps to ensure that the following persons act in the manner set out in Paragraph BR-6.4.3:

            (a) Its employees; and
            (b) Any other members of its group and their employees.
            Amended: July 2012
            Added: January 2012

          • BR-6.4.5

            In gathering information to fulfill its supervisory duties, the CBB acts in a professional manner and with due regard to maintaining confidential information obtained during the course of its information gathering activities.

            Added: January 2012

        • BR-6.5 BR-6.5 Role of the Appointed Expert

          • Introduction

            • BR-6.5.1

              The content of this Chapter is applicable to all banks and appointed experts.

              Added: October 2011

            • BR-6.5.2

              The purpose of the contents of this Chapter is to set out the roles and responsibilities of appointed experts when appointed pursuant to Articles 114 or 121 of the CBB Law (see EN-7.1.1). These Articles empower the CBB to assign some of its officials or others to inspect or conduct investigations of banks.

              Added: October 2011

            • BR-6.5.3

              The CBB uses its own inspectors to undertake on-site examinations of licensees as an integral part of its regular supervisory efforts. In addition, the CBB may commission reports on matters relating to the business of licensees in order to help it assess their compliance with CBB requirements. Inspections may be carried out either by the CBB's own officials, by duly qualified appointed experts appointed for the purpose by the CBB, or a combination of the two.

              Added: October 2011

            • BR-6.5.4

              The CBB will not, as a matter of general policy, publicise the appointment of an appointed expert, although it reserves the right to do so where this would help achieve its supervisory objectives.

              Added: October 2011

            • BR-6.5.5

              Unless the CBB otherwise permits, appointed experts should not be the same firm appointed as external auditor of the bank.

              Added: October 2011

            • BR-6.5.6

              Appointed experts will be appointed in writing, through an appointment letter, by the CBB. In each case, the CBB will decide on the range, scope and frequency of work to be carried out by appointed experts.

              Added: October 2011

            • BR-6.5.7

              All proposals to appoint appointed experts require approval by an Executive Director or more senior official of the CBB. The appointment will be made in writing, and made directly with the appointed experts concerned. A separate letter is sent to the licensee, notifying them of the appointment. At the CBB's discretion, a trilateral meeting may be held at any point, involving the CBB and representatives of the licensee and the appointed experts, to discuss any aspect of the investigation.

              Added: October 2011

            • BR-6.5.8

              Following the completion of the investigation, the CBB will normally provide feedback on the findings of the investigation to the bank.

              Added: October 2011

            • BR-6.5.9

              Appointed experts will report directly to and be responsible to the CBB in this context and will specify in their report any limitations placed on them in completing their work (for example due to the bank's group structure). The report produced by the appointed experts is the property of the CBB (but is usually shared by the CBB with the firm concerned).

              Added: October 2011

            • BR-6.5.10

              Compliance by appointed experts with the contents of this Chapter will not, of itself, constitute a breach of any other duty owed by them to a bank (i.e. create a conflict of interest).

              Added: October 2011

            • BR-6.5.11

              The CBB may appoint one or more of its officials to work on the appointed experts' team for a bank.

              Added: October 2011

          • The Required Report

            • BR-6.5.12

              The scope of the required report will be determined and detailed by the CBB in the appointment letter. Commissioned appointed experts would normally be required to report on one or more of the following aspects of a bank's business:

              (a) Accounting and other records;
              (b) Internal control systems;
              (c) Returns of information provided to the CBB;
              (d) Operations of certain departments; and/or
              (e) Other matters specified by the CBB.
              Added: October 2011

            • BR-6.5.13

              Appointed experts will be required to form an opinion on whether, during the period examined, the bank is in compliance with the relevant provisions of the CBB Law and the CBB's relevant requirements, as well as other requirements of Bahrain Law and, where relevant, industry best practice locally and/or internationally.

              Added: October 2011

            • BR-6.5.14

              The appointed experts' report should follow the format set out in Appendix BR-13, in part B of the CBB Rulebook.

            • BR-6.5.15

              Unless otherwise directed by the CBB or unless the circumstances described in Section BR-6.5.19 apply, the report must be discussed with the Board of directors and/or senior management in advance of it being sent to the CBB.

              Added: October 2011

            • BR-6.5.16

              Where the report is qualified by exception, the report must clearly set out the risks which the bank runs by not correcting the weakness, with an indication of the severity of the weakness should it not be corrected. Appointed experts will be expected to report on the type, nature and extent of any weaknesses found during their work, as well as the implications of a failure to address and resolve such weaknesses.

              Added: October 2011

            • BR-6.5.17

              If the appointed experts conclude, after discussing the matter with the bank, that they will give a negative opinion (as opposed to one qualified by exception) or that the issue of the report will be delayed, they must immediately inform the CBB in writing giving an explanation in this regard.

              Added: October 2011

            • BR-6.5.18

              The report must be completed, dated and submitted, together with any comments by directors or management (including any proposed timeframe within which the bank has committed to resolving any issues highlighted by the report), to the CBB within the timeframe applicable.

              Added: October 2011

          • Other Notifications to the CBB

            • BR-6.5.19

              Appointed expertsmust communicate to the CBB, during the conduct of their duties, any reasonable belief or concern they may have that any of the requirements of the CBB, including the criteria for licensing a bank (see Module LR), are not or have not been fulfilled, or that there has been a material loss or there exists a significant risk of material loss in the concerned bank, or that the interests of customers are at risk because of adverse changes in the financial position or in the management or other resources of a bank. Notwithstanding the above, it is primarily the bank's responsibility to report such matters to the CBB.

              Added: October 2011

            • BR-6.5.20

              The CBB recognises that appointed experts cannot be expected to be aware of all circumstances which, had they known of them, would have led them to make a communication to the CBB as outlined above. It is only when appointed experts, in carrying out their duties, become aware of such a circumstance that they should make detailed inquiries with the above specific duty in mind.

              Added: October 2011

            • BR-6.5.21

              If appointed experts decide to communicate directly with the CBB in the circumstances set out in Paragraph BR-6.5.19, they may wish to consider whether the matter should be reported at an appropriate senior level in the bank at the same time and whether an appropriate senior representative of the bank should be invited to attend the meeting with the CBB.

              Added: October 2011

          • Permitted Disclosure by the CBB

            • BR-6.5.22

              Information which is confidential and has been obtained under, or for the purposes of, this chapter or the CBB Law may only be disclosed by the CBB in the circumstances permitted under the Law. This will allow the CBB to disclose information to appointed experts to fulfil their duties. It should be noted, however, that appointed experts must keep this information confidential and not divulge it to a third party except with the CBB's permission and/or unless required by Bahrain Law.

              Added: October 2011

          • Trilateral Meeting

            • BR-6.5.23

              The CBB may, at its discretion, call for a trilateral meeting(s) to be held between the CBB and representatives of the relevant bank and the appointed experts. This meeting will provide an opportunity to discuss the appointed experts' examination of, and report on, the bank.

              Added: October 2011

    • PD PD Public Disclosure

      • PD-A PD-A Introduction

        • PD-A.1 PD-A.1 Purpose

          • PD-A.1.1

            The purpose of this Module is to set out the detailed qualitative and quantitative public disclosure requirements and disclosure to shareholders that the banks should adhere to in order to enhance corporate governance and financial transparency through better public disclosure. Such disclosures also help to protect customers and facilitate market discipline.

            Amended October 2010
            April 2008

          • PD-A.1.2

            This Module provides support for certain other parts of the Rulebook, namely:

            (a) Principles of Business;
            (b) High-level Controls;
            (c) Audit Firms;
            (d) CBB Reporting Requirements;
            (e) Capital Adequacy;
            (f) Business and Market Conduct; and
            (g) Risk Management (i.e. market, credit, liquidity and operational).
            April 2008

          • PD-A.1.3

            This Module also provides support for certain aspects relating to disclosure requirements stipulated in the Central Bank of Bahrain and Financial Institutions Law (Decree No. 64 of 2006) and the Bahrain Commercial Companies Law (as amended).

            April 2008

          • PD-A.1.4

            The Central Bank of Bahrain's ('CBB') disclosure requirements (in this Module) vary according to whether the concerned bank is a Bahraini conventional bank licensee (PD-1 and PD-3) or a branch of a foreign bank (PD-2).

            Amended: July 2015
            Amended: January 2011
            April 2008

          • Legal Basis

            • PD-A.1.5

              This Module contains the CBB's Directive (as amended from time to time) relating to public disclosure and disclosure to shareholders and is issued pursuant to the powers available to the CBB under Article 38 of the Central Bank of Bahrain and Financial Institutions Law 2006 ('CBB Law'). It also incorporates the requirements of Article 62 of the CBB law with respect to the publication of financial statements. The Directive in this Module is applicable to all Bahraini conventional bank licensees (and branches of foreign banks where applicable).

              Amended: July 2015
              Amended: July 2012
              Amended: January 2011
              Amended October 2010
              April 2008

            • PD-A.1.6

              For an explanation of the CBB's rule-making powers and different regulatory instruments, see Section UG-1.1.

              April 2008

        • PD-A.2 PD-A.2 General Requirements

          • PD-A.2.1

            All Bahraini conventional bank licensees must have a formal disclosure policy as part of their overall communications strategy approved by the Board of Directors (and supported by documented procedures) that addresses the disclosures that the bank makes and the internal controls over the disclosure process. In addition, all Bahraini conventional bank licensees must carry out a regular review of the validity of their disclosures (in terms of scope and accuracy) as outlined in Sections BR-5.2 and AU-3.2.

            Amended: July 2015
            April 2008

          • PD-A.2.2

            All Bahraini conventional bank licensees are required to publish their annual audited, and reviewed quarterly financial statements per the rules set out in this Module and the CBB Law, Bahrain Commercial Companies Law (as amended), the Rulebook of the licensed exchange and Volume 6 (Capital Markets), where applicable. Such financial statements must always be prepared in accordance with International Financial Reporting Standards (IFRS). Listed banks must refer to Paragraph PD-A.2.6.

            Amended: July 2015
            Amended: October 2011
            Amended: January 2011
            Amended October 2010
            April 2008

          • PD-A.2.3

            The CBB requires that each bank maintain an up-to-date checklist of all applicable IFRS and also the disclosure requirements set out in this Module for full compliance purposes. Such checklists should be part of the bank's public disclosure procedures.

            Amended October 2010
            April 2008

          • PD-A.2.4

            The disclosure requirements specified in Chapters 1, 3 and 6 of this Module, which are in addition to those required by applicable accounting standards, must be reviewed by the bank's external auditor based upon agreed upon procedures (unless IFRS require that the concerned disclosures are audited). See also BR-1.1, BR-2.2 and AU-3.2 for more details.

            Amended: October 2011
            Amended: October 2010
            April 2008

          • PD-A.2.4A

            The disclosure requirements in this Module may be presented as an accompanying document or appendices to the Annual Report or in the Notes to the Financial Statements at the discretion of the concerned bank.

            October 2010

          • PD-A.2.5

            The external auditor must also review other statements in the Annual Report such as the Chairman's report to ensure that such statements are consistent with the audited financial statements and the disclosures required by this Module. All qualitative or descriptive disclosures in the Annual Report must be based upon and reflective of facts and actual practice by the bank (and be subject to the above review by the bank's external auditor).

            Amended October 2010
            April 2008

          • PD-A.2.6

            If situations arise where disclosures required in this Module are in conflict with those required under IFRS and/or any listing requirements issued by the CBB or a licensed exchange, listed banks should first follow the CBB's requirements as contained in Volume 6 (Capital Markets). In such situations, banks should explain any material differences between the accounting or other disclosures and the disclosure required in this Module. This explanation does not have to take the form of a line by line reconciliation, but should provide stakeholders with sufficient detail to make an objective assessment of the bank's financial and operational health. Moreover, a formal notification to the CBB is required in such a situation.

            Amended: July 2012
            Amended: October 2011
            Amended: January 2011
            Amended October 2010
            April 2008

          • PD-A.2.7

            A bank should decide which disclosures are relevant for it based on the materiality concept and subject to the concurrence of the bank's external auditor. For the bank's guidance, information would be regarded as material if its omission or misstatement could change or influence the assessment or decision of a user relying on that information for the purpose of making economic decisions.

            Amended October 2010
            April 2008

          • PD-A.2.8

            Non-compliance with these disclosure requirements is likely to lead to enforcement actions as outlined in Module EN (Enforcement).

            Amended: July 2015
            April 2008

          • PD-A.2.9

            The disclosures referred to in this Module must be made at the top consolidated level of a banking group (i.e. at the level of the parent bank in Bahrain). Disclosures related to individual banks within a banking group will be required where listing requirements or differing accounting requirements necessitate such separate disclosure.

            Amended: July 2015
            Amended October 2010
            April 2008

          • PD-A.2.10

            With effect from 30th June 2015, Bahraini conventional bank licensees must follow a 3-step approach to provide a full reconciliation of all regulatory capital elements back to the published financial statements.

            Added: July 2015

          • PD-A.2.10A

            The 3-step approach is not based on a common template because the starting point for reconciliation, the bank's reported balance sheet, may vary slightly in composition from bank to bank. Full details of the reconciliation process and associated disclosures are provided in Appendix PD-2.

            Added: July 2015

          • PD-A.2.11

            With effect from 30th June 2015, Bahraini conventional bank licensees must use a common template to provide a description of the main features of regulatory capital instruments issued. Full details are provided in Appendix PD-3.

            Added: July 2015

          • PD-A.2.12

            With effect from 30th June 2015, Bahraini conventional bank licensees must disclose the full terms and conditions of all outstanding regulatory capital instruments on their website.

            Added: July 2015

          • PD-A.2.13

            With effect from 30th June 2015, Bahraini conventional bank licensees must use a modified version of the post 1 January 2019 template mentioned in Paragraph PD-A.2.15 below until 31 December 2018. This template is established to disclose the components of capital that are benefiting from the transitional arrangements. The template and accompanying notes are provided in Appendix PD- 4.

            Added: July 2015

          • PD-A.2.14

            [This Paragraph has been left blank]

            Added: July 2015

          • PD-A.2.15

            With effect from 1 January 2019, Bahraini conventional bank licensees must use a common template (set out in Appendix PD-1) to report the breakdown of their regulatory capital when the transition period for the phasing-in of deductions ends. The template is designed to disclose all regulatory adjustments, including amounts falling below thresholds for deduction, and thus enhance consistency and comparability in the disclosure of the elements of capital between banks and across jurisdictions.

            Added: July 2015

        • PD-A.3 PD-A.3 Proprietary and Confidential Information

          • PD-A.3.1

            Proprietary information encompasses information (for example on products or systems), that if shared with competitors would render a licensed bank's investment in these products/systems less valuable, and hence would undermine its competitive position. Information about customers is often confidential, in that it is provided under the terms of a legal agreement or counterparty relationship. This has an impact on what banks should reveal in terms of information about their customer base, as well as details on their internal arrangements, for instance methodologies used, parameter estimates, data etc.

            April 2008

          • PD-A.3.2

            [This Paragraph was deleted in April 2016.]

            Deleted: April 2016
            Amended: July 2015
            Amended October 2010
            April 2008

        • PD-A.4 PD-A.4 Module History

          • PD-A.4.1

            This Module was first issued in July 2004 as part of the conventional principles volume. Any material changes that have subsequently been made to this Module are annotated with the calendar quarter date in which the change was made: Chapter UG-3 provides further details on Rulebook maintenance and version control.

            October 2010

          • PD-A.4.2

            The most recent changes made to this Module are detailed in the table below:

            Module Ref. Change Date Description of Changes
            PD-5 Jan 2005 New Internet Disclosure rules.
            PD-4.1 Jul 2005 Small definition change to consumer loans.
            PD-2.1, PD-3.1 Jan 2006 Revised notification requirements for disclosures.
            PD-3.1 April 2006 Specific requirements to disclose changes in shareholders' equity.
            PD-1 & PD-3 Jan 2008 New Disclosures required by Basel II
            PD-A.2.1, 2.6, 2.9, PD-1.2.3, PD-1.3.4(b) Apr 2008 Small guidance changes to assist in disclosures
            PD 10/2010 Various minor amendments to ensure consistency in CBB Rulebook.
            PD-1.3.8 10/2010 Additional items for disclosure added to be in line with Corporate Governance Code.
            PD-6 10/2010 New Chapter added to deal with corporate governance disclosure to shareholders.
            PD-A.1.5 01/2011 Clarified legal basis.
            PD-A.2.2, PD-A.2.6, PD-1.3.36 and PD-1.4.1 01/2011 Changes made to reflect new reference to licensed exchange.
            PD-A.4.3 04/2011 Corrected cross reference.
            PD-1.1.1 04/2011 Corrected reference to the Rulebook of the licensed exchange.
            PD-1.2, PD-2.1.4, PD-2.1.5, PD-3.1.4, PD-3.1.5 and PD-5.1.1 04/2011 Clarified requirements for due date.
            PD-A.2.2, PD-A.2.6 and PD-1.3.36 (c). 10/2011 Reference added to Volume 6 (Capital Markets).
            PD-A.2.4 10/2011 Clarification of existing requirement for the Agreed Upon Procedures Report and setting a deadline for the submission of the report.
            PD-1.5 10/2011 Added a new Section on Press Release of Annual Results.
            PD-3.1.3 10/2011 Amended Subparagraph to be consistent with other Volumes of the Rulebook.
            PD-1.3 01/2012 Changes in respect of July 2009 and February 2011 amendments to Basel II.
            PD-1.3.8 01/2012 Amended corporate governance disclosure in annual report.
            PD-3.1.4 01/2012 Added requirement to include statement of comprehensive income.
            PD-6.1.1 01/2012 Amended disclosure requirements to shareholders.
            PD-1.1.1 04/2012 Expanded the scope of this Chapter to also apply to retail branches of foreign banks.
            PD-1.2.3 04/2012 Clarified financial statements that must be disclosed by locally incorporated banks.
            PD-1.2A 04/2012 Added requirements for annual audited financial statements of retail branches of foreign banks.
            PD-1.3.8 (x) 04/2012 Clarified nature of disclosure in relation to Module HC.
            PD-2.1.2 04/2012 Clarified what interim semi-annual statements are to be disclosed by retail branches of foreign banks.
            PD-3.1.4 04/2012 Clarified quarterly disclosure requirements.
            PD-3.1.6 04/2012 Clarified deadline for disclosing additional semi-annual disclosures.
            PD-5.1.1 04/2012 Paragraph deleted as it repeats contents of Paragraph PD-3.1.4.
            PD-A.1.5 07/2012 Added reference to Article 62 of the CBB Law.
            PD-A.2.6 07/2012 Clarified priority of Rule to follow where there is a conflict.
            PD-1.3.8 07/2012 Clarified content of disclosure on corporate governance.
            PD-4.4 07/2012 New Section added on press release concerning financial statements.
            PD-1.3.8 10/2012 Amended the requirement for banks to maintain a website under (bb).
            PD-4.1 10/2012 This Section was deleted and requirements are now included in Section BC-4.3.
            PD-4.2 10/2012 Clarified title of this Section.
            PD-1.3.21 07/2013 Corrected typo.
            PD-1.3.36 07/2013 Added reference to Volume 6 (Capital Markets).
            PD-1.3.8 to PD-1.3.8F 01/2014 Additional disclosure requirements related to sound remuneration practices.
            PD-1.3.8C, PD-1.3.8F and PD-1.3.8G 07/2014 Amended disclosure requirements pertaining to remuneration.
            PD-1.3.8B(o) 04/2015 Clarified that disclosure rule under this Subparagraph only applies for approved persons and material risk takers.
            PD-A.2, PD-A.3, PD-B.1, PD-1.1, PD-1.2, PD-1.3, PD-1.4, PD-3.1, PD-4.2, PD-4.3 07/2015 New disclosures required by Basel III and alignment related changes for Deposit and URIA Protection scheme and disclosures relating to approved persons
            PD-A.3.2 04/2016 Aligned with change made to Volume 2.
            PD-1.2.6 04/2016 The annual report must be submitted as a soft copy to the CBB.
            PD-1.3.8 04/2016 Paragraph restructured and clarified to eliminate certain redundancies.
            PD-1.3.33 and PD-1.3.33A 04/2016 Operational risk disclosure requirements aligned with Volume 2 requirements for consistency purposes.
            PD-3.1.6 04/2016 Due date changed to 2 months to be aligned with requirements under Paragraph BR-2.2.3.
            PD-5.1.3 04/2016 Guidance paragraph deleted as requirements included under Paragraph PD-5.1.2.
            PD-1.3.1 07/2017 Amended paragraph cross-reference.
            PD1.2A.2 07/2018 Amended Paragraph on 'Publication of Annual Audited Financial Statements' time frame.
            PD-1.3.37 10/2019 Amended Paragraph on disclosure of financial penalties of Bahraini banks.
            PD-1.3A 10/2019 Added a new Section on disclosures requirements pertaining to branches of foreign banks.

          • Effective Date

            • PD-A.4.3

              The contents in this Module are effective from July 2004 or from the effective date of the summary of changes as shown in the table in paragraph PD-A.4.2. Changes to Chapter PD-6 are effective 1st January 2011.

              Amended: April 2011
              Amended October 2010
              April 2008

      • PD-B PD-B General Guidance and Best Practice

        • PD-B.1 PD-B.1 [This Chapter was deleted in July 2015.]

          Deleted: July 2015

          • Basel Committee on Banking Supervision: Various papers

            [This Section was deleted in July 2015]

            Deleted: July 2015

            • PD-B.1.1

              [This Paragraph was deleted in July 2015.]

              Deleted: July 2015
              April 2008

            • PD-B.1.2

              [This Paragraph was deleted in July 2015.]

              Deleted: July 2015
              April 2008

            • PD-B.1.3

              [This Paragraph was deleted in July 2015.]

              Deleted: July 2015
              April 2008

      • PD-1 PD-1 Annual Disclosure Requirements

        • PD-1.1 PD-1.1 Introduction

          • PD-1.1.1

            The purpose of this Chapter is to set out the CBB's requirements relating to the disclosure of information in the annual audited financial statements and the Annual Report of all Bahraini conventional banks as well as for retail branches of foreign banks. This Chapter also refers to the Bahrain Commercial Companies Law (as amended) and the Rulebook of the licensed exchange relating to public disclosure and reporting requirements.

            Amended: July 2015
            Amended: April 2012
            Amended: April 2011
            Amended October 2010
            April 2008

          • PD-1.1.2

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

            (a) Approved person means any person occupying a controlled function as outlined in Section LR-1A.1;
            (b) 'Interest in the shares' shall include, but not be limited to, direct and/or indirect ownership of such shares, the right of voting associated with such shares, the right to receive dividends payable on such shares, and/or any right, regardless of the form thereof, to purchase (or otherwise acquire an interest in) such shares at any time;
            (c) 'Audited financial statements' refers to the financial statements required under International Financial Reporting Standards; and
            (d) 'Annual Report' refers to the document which contains the full audited financial statements and accompanying notes as well as any accompanying commentary by the senior officials of the bank.
            Amended: July 2015
            Amended October 2010
            April 2008

        • PD-1.2 PD-1.2 Requirements for Annual Audited Financial Statements and Annual Report for Bahraini Conventional Banks

  • Publication of Annual Audited Financial Statements

    • PD-1.2.3

      Banks must publish extracts from their audited annual financial statements in one Arabic and one English daily newspaper within 2 months of the end of the financial year. The newspaper disclosures may be edited, but must include at a minimum the statement of financial position (balance sheet), the statements of income, cash flow and changes in equity and where applicable, the statement of comprehensive income. The newspaper disclosures must also be placed on the bank's website within one week of publication.

      Amended: April 2012
      Amended: April 2011
      Amended October 2010
      April 2008

    • PD-1.2.4

      The newspaper disclosures should include a reference to the fact that the published figures "have been extracted from financial statements audited by XYZ auditors, who expressed an unqualified opinion on (dated report)". Banks must disclose in full any audit qualifications or matter of emphasis paragraphs contained within the auditor's opinion. The auditor's opinion must be made in accordance with the International Standards on Auditing as established by the International Federation of Accountants.

      April 2008

    • PD-1.2.5

      Banks must submit a copy of the newspaper extracts from their annual audited financial statements to the CBB within two business days of publication in the concerned newspapers. The copy must be accompanied by a letter clearly showing on which date and in which publications the statements were published.

      Amended: April 2011
      April 2008

  • Submission of Annual Report

    • PD-1.2.6

      All Bahraini conventional bank licensees must submit a soft copy (electronic) of their annual report to the CBB, including the full disclosures and appendices prescribed in this Chapter within 4 months of the end of the bank's financial year.

      Amended: April 2016
      Amended: July 2015
      Amended: April 2011
      Amended October 2010
      Amended October 2009
      April 2008

    • PD-1.2.7

      Banks are also required to place the annual report with full disclosures and appendices on their website (see also PD-1.3.8(h)) within one week of submission to the CBB.

      Amended: July 2015
      Amended: April 2011
      Amended October 2010
      April 2008

  • PD-1.2A PD-1.2A Requirements for Annual Audited Financial Statements Retail Branches of Foreign Banks

    • Submission of Annual Audited Financial Statements

      • PD-1.2A.1

        All retail branches of foreign conventional banks must submit their annual audited financial statements to the CBB within 3 months of the end of the bank's financial year (as required by Article 62 of the CBB Law).

        Added: April 2012

    • Publication of Annual Audited Financial Statements

      • PD-1.2A.2

        Banks must publish extracts from their audited annual financial statements in one Arabic and one English daily newspaper within 3 months of the end of the financial year. The newspaper disclosures may be edited, but must include at a minimum the statement of financial position (balance sheet), the statements of income, cash flow, and where applicable, of comprehensive income.

        Amended: July 2018
        Added: April 2012

  • PD-1.3 PD-1.3 Disclosures in the Annual Report for Bahraini Conventional Banks

    • Introduction

      • PD-1.3.1

        Banks (referred to under Paragraph PD-1.2.6 — hereafter referred to as "banks") should provide timely information which facilitates market participants' assessment of them. The disclosure requirements set out in this Section must be included in the Annual Report either as an Appendix or in the Notes to the Audited Financial Statements at the discretion of the concerned bank. The disclosures should be addressed in clear terms and with appropriate details to help achieve a satisfactory level of bank transparency.

        Amended: July 2017
        April 2008

      • PD-1.3.2

        The disclosure requirements listed in Paragraphs PD-1.3.4 to PD-1.3.35 below follow the requirements of Basel II Pillar 3 and are in addition to, or in some cases serve to clarify, the disclosure requirements of IFRS.

        Amended October 2010
        April 2008

      • PD-1.3.3

        If a bank is not able to achieve full compliance with the requirements stated in this Chapter, a meeting should be held with the relevant Banking Supervision Director at the CBB in the presence of the concerned external auditor to discuss the reasons for such non-compliance prior to the finalisation of the annual report. It is the responsibility of the bank to call for such meetings.

        Amended October 2010
        April 2008

    • Scope of Application — Qualitative Disclosures

      • PD-1.3.4

        The following information must be disclosed in relation to the parent bank (in Bahrain) and its banking and financial institution subsidiaries:

        (a) The full legal name of the top corporate entity in the group to which the disclosure requirements apply;
        (b) [This Paragraph has been deleted and replaced with Paragraph PD-1.3.12]; and
        (c) Any restrictions on the transfer of funds or regulatory capital within the group (e.g. large exposure or exchange control regulations or covenants over the repayment of capital or the payment of dividends).
        Amended: July 2015
        Amended: April 2011
        Amended October 2010
        April 2008

      • Scope of Application — Quantitative Disclosures

        • PD-1.3.5

          The aggregate amounts (current book value) of the bank's total interests in insurance entities, which are risk-weighted rather than deducted from capital, as well as their name, their country of incorporation or residence, and the proportion of voting power in these entities must be disclosed (in relation to the parent bank). In addition, banks must disclose the quantitative impact on regulatory capital of using this method versus the deduction method.

          Amended: July 2015
          Amended: April 2011
          Amended October 2010
          April 2008

        • PD-1.3.6

          [This Paragraph was deleted in July 2015.]

          Deleted: July 2015
          Amended October 2010
          April 2008

    • Financial Performance and Position

      • PD-1.3.7

        The following information should be included:

        (a) Discussion of the main factors that influenced the bank's financial performance for the year, explaining any differences in performance between the current year and previous years and the reasons for such differences, and discussing factors that will have a significant influence on the bank's future financial performance;
        (b) Basic quantitative indicators of financial performance (e.g. ROAE, ROAA, NIM, cost-to-income ratios) for the past 5 years;
        (c) A discussion of the impact of acquisitions of new businesses and discontinued business and unusual items; and
        (d) A discussion of any changes in the capital structure and their possible impact on earnings and dividends.
        Amended: April 2011
        Amended October 2010
        April 2008

    • Corporate Governance and Transparency

      • PD-1.3.8

        The following information relating to corporate governance must be disclosed in the annual report:

        (a) Information about the Board structure (e.g. the size of the Board, Board committees, function of committees and membership showing executive, non-executive and independent members, number and names of independent board members), and the basic organisational structure (lines of business structure and legal entity structure);
        (b) Information about the profession, business title, and experience in years of each Board member and the qualifications and experience in years of all senior managers;
        (c) Descriptive information on the managerial structure, including:
        (i) Committees (see w) below for detailed disclosure requirements relating to various types of committees);
        (ii) Segregation of duties;
        (iii) Reporting lines; and
        (iv) Responsibilities;
        (d) Descriptive information on the performance-linked incentive structure for approved persons (including but not limited to remuneration policies, executive compensation and stock options);
        (e) Nature and extent of transactions with related parties (as defined by IFRS — see also PD-1.3.23(d));
        (f) Approval process for related party transactions;
        (g) Information about any changes in the structures (as mentioned in Subparagraphs PD-1.3.8(a) to PD-1.3.8(c) above) from prior periods;
        (h) The communications strategy approved by the Board (including the use of the bank's website) which should undertake to perform at least the following:
        (i) The disclosure of all relevant information to stakeholders on a timely basis in a timely manner; and
        (ii) The provision of at least the last five years of financial data on the bank's website;
        (i) Distribution of ownership of shares by nationality;
        (j) Directors' and senior managers' trading of the bank's shares during the year, on an individual basis;
        (k) Distribution of ownership of shares by directors and senior managers, on an individual basis;
        (l) Distribution of ownership of shares by size of shareholder;
        (m) Ownership of shares by government;
        (n) The Board's functions — rather than a general statement (which could be disclosed simply as the Board's legal obligations under various laws) the 'mandate' of the Board should be set out;
        (o) The types of material transactions that require Board approval;
        (p) [This Subparagraph was deleted in April 2016 and requirements are now included in Subparagraph (a)];
        (q) Board terms and start date for each term for each director;
        (r) What the board does to induct, educate and orient new directors;
        (s) Election system of directors and any termination arrangements;
        (t) [This Subparagraph was deleted in April 2016 and requirements moved to Subparagraph (w)];
        (u) [This Subparagraph was deleted in April 2016 and requirements moved to Subparagraph (w)];
        (v) Whether the board has adopted a written code of ethical business conduct, and if so the text of that code and a statement of how the board monitors compliance;
        (w) Minimum number of Board committee meetings compared with the actual dates and number of board and committee meetings, individual attendance of each director and the work of committees and any significant issues arising during the period;
        (x) Reference to Module HC and any amendments subsequently made by the CBB, including explanation and nature of any non-compliance with Module HC in accordance with Paragraph HC-A.1.8;
        (y) Review of internal control processes and procedures;
        (z) Directors responsibility with regard to the preparation of financial statements;
        (aa) Board of Directors — whether or not the board, its committees and individual directors are regularly assessed with respect to their effectiveness and contribution;
        (bb) Bahraini conventional bank licensees must maintain a website. Overseas conventional bank licensees must provide a link on their website in Bahrain to the website of their parent bank;
        (cc) Aggregate remuneration paid to board members;
        (dd) Key features and objectives of the remuneration policy of the bank for board members and senior management as well as the frequency of review of the remuneration structure and the extent to which the policy is applicable to foreign subsidiaries and branches; and
        (ee) Aggregate remuneration paid to senior management.
        Amended: April 2016
        Amended: July 2015
        Amended: January 2014
        Amended: October 2012
        Amended: July 2012
        Amended: April 2012
        Amended: January 2012
        Amended: April 2011
        Amended October 2010
        April 2008

      • PD-1.3.8A

        With regards to corporate governance, banks are subject to additional disclosure requirements on corporate governance, whereby such disclosure are for the benefit of shareholders (See Chapter PD-6).

        October 2010

    • Additional Disclosure Requirements Pertaining to Remuneration

      • PD-1.3.8B

        In addition to the remuneration related disclosure included under Paragraph PD-1.3.8, the following qualitative and quantitative information pertaining to remuneration practices and policies covering the following areas must be disclosed in the annual report:

        (a) The name, composition and mandate of the main body overseeing remuneration;
        (b) Whether external consultants' advice has been sought and by whom in the bank and in what areas of the remuneration process the consultants have been involved;
        (c) The independence of remuneration for staff in risk management, internal audit, operations, financial controls, AML, internal shari'a review/audit and compliance functions;
        (d) The risk adjustment methodologies;
        (e) The link between remuneration and performance;
        (f) The long-term performance measures (deferral, malus, clawback);
        (g) The types of remuneration (cash/equity, fixed/variable);
        (h) Whether the remuneration committee reviewed the bank's remuneration policy during the past year, and if so, an overview of any changes that were made;
        (i) A discussion of how the bank ensures that approved persons engaged in risk management, internal audit, operations, financial controls, AML, internal shari'a review/audit and compliance functions are remunerated independently of the business units they oversee;
        (j) Description of the ways in which the current and future risks are taken into account in the remuneration processes. Disclosures must include:
        (i) An overview of the key risks that the bank takes into account when implementing remuneration measures;
        (ii) An overview of the nature and type of the key measures used to take account of these risks, including risks difficult to measure;
        (iii) A discussion on the ways in which these measures affect remuneration; and
        (iv) A discussion of how the nature and type of these measures have changed over the past year and reasons for the change, as well as the impact of changes on remuneration;
        (k) Description of the ways in which the bank seeks to link performance during a performance measurement period with levels of remuneration. Disclosures must include:
        (i) An overview of main performance metrics for bank, top-level business lines and individuals;
        (ii) A discussion of how amounts of individual remuneration are linked to bank-wide and individual performance; and
        (iii) A discussion of the measures the bank will in general implement to adjust remuneration in the event that performance metrics are weak1;
        (l) Description of the ways in which the bank seeks to adjust remuneration to take account of longer term performance. Disclosures must include:
        (i) A discussion of the bank's policy on deferral and vesting of variable remuneration and, if the fraction of variable remuneration that is deferred differs across employees or groups of employees, a description of the factors that determine the fraction and their relative importance; and
        (ii) A discussion of the bank's policy and criteria for adjusting deferred remuneration before vesting and after vesting through clawback arrangements;
        (m) Description of the different forms of variable remuneration that the bank utilises and the rationale for using these different forms. Disclosures must include:
        (i) An overview of the forms of variable remuneration offered (i.e. cash, shares and share-linked instruments and other forms2); and
        (ii) A discussion of the use of the different forms of variable remuneration and, if the mix of different forms of variable remuneration differs across employees or group of employees, a description of the factors that determine the mix and their relative importance;
        (n) Number of meetings held by the main body overseeing remuneration during the financial year and aggregate remuneration paid to its members;
        (o) Number and total amount of remuneration for approved persons and material risk takers for the financial year split into fixed and variable remuneration;
        (p) Number and total amount of variable remuneration awarded during the financial year, split into cash, shares and share-linked instruments and other;
        (q) Number and total amount of guaranteed bonuses awarded during the financial year;
        (r) Number and total amount of sign-on awards made during the financial year;
        (s) Number and total amount of severance payments made during the financial year, and highest such award to a single person;
        (t) Total amount of outstanding deferred remuneration, split into cash, shares and share-linked instruments and other forms; and
        (u) Total amount of deferred remuneration awarded during the financial year, paid out and reduced through performance adjustments.

        1 This should include the bank's criteria for determining weak performance metrics.

        2 A description of the elements corresponding to other forms of variable remuneration must be provided.

        Amended: July 2015
        Amended: April 2015
        Amended: July 2014
        Added: January 2014

      • PD-1.3.8C

        The disclosure of remuneration practices must cover approved persons and material risk-takers and must be broken down as follows:

        (a) Members of the board of directors;
        (b) Approved persons in business lines;
        (c) Approved persons in risk management, internal audit, operations, financial controls, internal Shari'a review/audit, AML and compliance functions; and
        (d) Material risk-takers not falling under categories (a) to (c).
        Amended: July 2014
        Added: January 2014

      • PD-1.3.8D

        Disclosure requirements for items under Subparagraph PD-1.3.8B (n) to (u) must be provided for the current as well as for the previous financial year.

        Added: January 2014

      • PD-1.3.8E

        Disclosure requirements for items under Subparagraph PD-1.3.8B (o) and (p) may be presented in a table format split between members of the Board and other approved persons, as well as material risk-takers.

        Added: January 2014

      • PD-1.3.8F

        For purposes of Paragraph PD-1.3.8E, the table referred to should be completed separately for:

        (a) Members of the board of directors;

        Total value of remuneration awards for the current fiscal year Unrestricted
        Fixed remuneration  
             •  Sitting Fees x
             •  Other (please specify) x
        (b) Approved persons in business lines;
        (c) Approved persons in risk management, internal audit, operation, financial controls, internal Shari'a review/audit, AML and compliance functions; and
        (d) Material risk-takers not falling under categories (a) to (c).


        Total value of remuneration awards for the current fiscal year Unrestricted Deferred
        Fixed remuneration    
             •  Cash-based x x
             •  Shares and share-linked instruments x x
             •  Other x x
        Variable remuneration    
             •  Cash-based x x
             •  Shares and share-linked instruments x x
             •  Other x x
        Amended: July 2014
        Added: January 2014

      • PD-1.3.8G

        In instances where a bank has no approved persons or material risk-takers whose remuneration is in excess of BD100,000 as per Paragraph HC-5.4.2, the disclosure requirements under Subparagraphs PD-1.3.8B(f), (g), (l), (m), (t) and (u) are not required.

        Added: July 2014

    • Capital Structure — Qualitative Disclosures

      • PD-1.3.9

        All banks must disclose on their website summary information on the terms and conditions of the main features of all outstanding regulatory capital instruments listed below in Paragraphs PD-1.3.10 and PD-1.3.11, including innovative, complex or hybrid capital instruments. Full details of the required disclosures are given in Appendix PD-3.

        Amended: July 2015
        Amended October 2010
        April 2008

    • Capital Structure — Quantitative Disclosures

      • PD-1.3.10

        From 30th June 2015 until 31st December 2018, all banks must disclose with separate disclosures of individual items as detailed in Appendix PD-4 the following items:

        (a) The amount of Tier One Capital;
        (b) The amount of Tier Two Capital; and
        (c) Required capital ratios and buffers
        Amended: July 2015
        Amended: April 2011
        Amended October 2010
        April 2008

      • PD-1.3.11

        From 1st January 2019, the disclosures referred to under Paragraph PD-1.3.10, must be made in accordance with Appendix PD-1.

        Amended: July 2015
        April 2008

      • PD-1.3.12

        From 30th June 2015, all banks must disclose a full reconciliation of all regulatory capital elements back to the balance sheet in the audited financial statements as required under Appendix PD-2.

        Amended: July 2015
        Amended October 2010
        April 2008

      • PD-1.3.13

        [This Paragraph was deleted in July 2015.]

        Amended: July 2015
        April 2008

    • Capital Adequacy

      • PD-1.3.14

        All banks must present a summary discussion of the bank's approach to assessing the adequacy of capital to support current and future activities both on a risk-based capital basis (i.e. as in Chapters CA-1 and CA-2).

        Amended: July 2015
        April 2008

      • PD-1.3.15

        All banks must disclose the regulatory capital requirements for credit risk by the following categories:

        (a) Standard portfolios subject to the standardised approach, disclosed separately for each standard portfolio (see Paragraph PD-1.3.20); and
        (b) Securitisation exposures.
        Amended: July 2015
        Amended: April 2011
        Amended October 2010
        April 2008

      • PD-1.3.16

        [This Paragraph has been left blank].

        Amended: July 2015
        Amended: April 2011
        Amended October 2010
        April 2008

      • PD-1.3.17

        All banks must disclose their capital requirements for market risk under:

        (a) The standardised approach; or
        (b) The internal models approach (trading book) as applicable.
        Amended: July 2015
        Amended: April 2011
        Amended October 2010
        April 2008

      • PD-1.3.18

        All banks must disclose their capital requirements for operational risk under:

        (a) The basic indicator approach; or
        (b) The standardised approach (as applicable).
        Amended: July 2015
        Amended: April 2011
        Amended October 2010
        April 2008

      • PD-1.3.19

        All banks must disclose their total and Tier One Capital Ratios on the following basis:

        (a) For the top consolidated group in Bahrain; and
        (b) For all significant bank subsidiaries (i.e. whose regulatory capital amounts to over 5% of group consolidated regulatory capital whether on a stand-alone or sub-consolidated basis).
        Amended: July 2015
        Amended: April 2011
        Amended October 2010
        April 2008

      • PD-1.3.20

        In Paragraphs PD-1.3.15 and PD-1.3.26, the expression "standard portfolio" refers to the major categories of credit portfolios (a to i below) identified in Sections CA-3.2, CA-3.3 and CA-5.2 (standardised approach only):

        (a) Sovereign portfolio (including claims on international organisations and claims on multilateral development banks (MDBs);
        (b) Public Sector Entities (PSEs) Portfolio;
        (c) Banks Portfolio (including claims on securities/investment business firms eligible for treatment as banks — such firms are not eligible for the concessionary risk weighting treatment for certain claims under 3 months maturity);
        (d) Corporate Portfolio;
        (e) Regulatory retail portfolio (including claims on small business eligible for 75% risk weight);
        (f) Residential Retail Portfolio (qualifying for 35% risk weight only); and
        (g) Equity portfolio (contains all equities held in the banking book. Portfolios a – f must not contain any holdings of equities. The equity portfolio contains all holdings of equities which are risk-weighted at 100% or 150% and which are not consolidated in or deducted from the Tier One and Two capital of the bank).
        Amended: April 2011
        Amended October 2010
        April 2008

    • Risk: General Qualitative Disclosure Requirements

      • PD-1.3.21

        All banks must describe their risk management objectives and policies for each separate risk area below and provide information on whether or not strategies used have been effective throughout the reporting period. The strategies, processes and internal controls (including internal audit) must be described for each area below including the structure and organisation of the relevant risk management function, and the scope and nature of risk reporting systems and policies for hedging/mitigating risk and strategies for monitoring the continuing effectiveness of hedges/mitigants. There are also certain specific disclosures for each of these areas in addition to the general qualitative disclosures required by this Paragraph:

        (a) Credit Risk (see also PD-1.3.22PD-1.3.27);
        (b) Securitisation (see also PD-1.3.28PD-1.3.29);
        (c) Market Risk (see also PD-1.3.30PD-1.3.31);
        (d) Operational Risk (see also PD-1.3.32PD-1.3.33);
        (e) Equity Risk in the Banking Book (see also PD-1.3.34); and
        (f) Banking Book interest rate risk (see also PD-1.3.35).
        Amended: July 2013
        Amended: April 2011
        Amended October 2010
        April 2008

    • Credit Risk — Qualitative Disclosures

      • PD-1.3.22

        All banks must make the general qualitative disclosures outlined in PD-1.3.21 above, as well as those below:

        (a) Definition of past due and impaired credit facilities (for accounting purposes);
        (b) Description of the approaches for specific and collective impairment provisions and statistical methods used (where applicable);
        (c) The names of External Credit Assessment Institutions (ECAIs) used for the purpose of assigning risk weights to assets;
        (d) The types of exposure for which each ECAI is used; and
        (e) The process used to transfer ECAI public issue ratings onto comparable (loan) assets in the banking book.
        Amended: April 2011
        Amended October 2010
        April 2008

    • Credit Risk — Quantitative Disclosures

      • PD-1.3.23

        All banks must disclose the following:

        (a) Total gross credit exposures (gross outstanding before any risk mitigation) plus average gross exposures over the period broken down by major types of credit exposure (as outlined under IFRS) into funded and unfunded exposures. Where the period end position is representative of the risk positions of the bank during the period, average gross exposures need not be disclosed. Banks must state that average gross exposures have not been disclosed for this reason. Where average amounts are disclosed in accordance with an accounting standard or other requirement which specifies the calculation method to be used, that method should be followed. Otherwise, the average exposures should be calculated using the most frequent interval that an entity's systems generate for management, regulatory or other reasons, provided that the resulting averages are representative of the licensed bank's operations. The basis used for calculating averages needs to be stated;
        (b) Geographic distribution of exposures, broken down into significant areas by major types of credit exposure. Geographical areas may be individual countries, or groups of countries. Banks may define the geographical area according to how they manage the concerned areas internally. The criteria used to allocate exposures to particular geographical areas should be specified;
        (c) Distribution of exposures by industry or counterparty type, broken down by major types of credit exposure, broken down by funded and unfunded exposure;
        (d) Intra-group transactions including exposures to related parties, and whether such transactions have been made on an arm's length basis;
        (e) Lending to highly leveraged and other high risk counterparties (as defined in PD-1.3.24) must be separately disclosed as an individual category;
        (f) Banks must disclose concentrations of risk to individual counterparties where the exposure is in excess of the 15% individual obligor limit. These disclosures do not require the disclosure of the name of the counterparty;
        (g) Residual contractual maturity breakdown (see PD-1.3.24(a)) of the whole credit portfolio, broken down by major types of credit exposure;
        (h) By major industry or counterparty type:
        •   Amount of impaired loans/facilities and past due loans/facilities (see PD-1.3.24);
        •   Specific and collective impairment provisions (see PD-1.3.24);
        •   Charges for specific impairment provisions and charge-offs (write-offs) during the period; and
        •   Reconciliation of changes in provisions for loan impairment.
        (i) Amount of past due loans, separately broken down by significant geographic areas, including the amounts of specific and collective impairment provisions related to each geographical area (see PD-1.3.23(b) for definition of geographical area);
        (j) Aggregate quantitative information about all outstanding credit facilities at year end not included in h) above that have been restructured (according to the definition in the PIR instructions) during the period including:
        •   The balance of any restructured credit facilities;
        •   The magnitude of any restructuring activity;
        •   The impact of restructured credit facilities on provisions and present and future earnings; and
        •   The basic nature of concessions on all credit relationships that are restructured, including loans, derivatives and other on- and off-balance sheet activities.
        If full repayment is expected, the restructured credit need not be disclosed in this section after satisfactory performance for a period of six months in accordance with the modified terms; and
        (k) Quantitative information concerning obligations with respect to recourse transactions (i.e. where the asset has been sold, but the bank retains responsibility for repayment if the original counterparty defaults or fails to fulfil their obligations). Information must include the amount of assets sold and any expected losses.
        Amended: April 2011
        Amended October 2010
        April 2008

      • PD-1.3.24

        For Paragraph PD-1.3.23, the following notes are provided for interpretative guidance:

        a) Banks must follow the residual maturity groupings currently followed under IFRS 7 (Guidance application B11), but they must also extend the periods to include 5-10 years, 10-20 years, and 20 years and over (where the banks have exposures or liabilities of such maturity);
        b) In PD-1.3.23(h), banks must provide an ageing of past due loans on the following basis:
        •   Ageing schedule (over 3 months, over 1 year and over 3 years) of past due loans and other assets; and
        •   Breakdown by relevant counterparty type and geographic area;
        c) For specific, collective and other impairment provisions, the portion of collective impairment provisions not allocated to specific geographical areas should be shown separately;
        d) The reconciliation of changes in provisions should show specific and collective impairment provisions separately; and
        e) "Highly leveraged and other high risk counterparties" follow the categorisation given in the Basel Committee Paper of March 2001, entitled "Review of issues relating to Highly Leveraged Institutions (HLIs)" which described HLIs as having the following characteristics:
        •   They are subject to little or no regulatory oversight;
        •   They are generally subject to very limited disclosure requirements and are not subject to rating by credit reference agencies; or
        •   HLIs often take on significant leverage, where leverage is the ratio between risk, expressed in some common denominator, and capital.
        Amended: January 2011
        Amended October 2010
        April 2008

    • Credit Risk Disclosures for Portfolios Subject to the FIRB Approach

      • PD-1.3.25

        [This Paragraph was deleted in July 2015.]

        Deleted: July 2015
        Amended: April 2011
        Amended October 2010
        April 2008

    • Credit Risk Mitigation: Disclosure Requirements

      • PD-1.3.26

        (a) For credit Risk Mitigation, all banks must make the qualitative disclosures required by PD-1.3.21 and PD-1.3.22, and also the following disclosures (with regard to credit risk mitigation):
        (i) Policies and processes for, and an indication of the extent to which, the bank makes use of on- and off-balance sheet netting;
        (ii) Policies and processes for collateral valuation and management;
        (iii) A description of the main types of collateral taken by the bank;
        (iv) The main types of guarantor/credit derivative counterparty and their credit worthiness; and
        (v) Information about (market or credit) risk concentrations within the credit risk mitigation taken;
        (b) All Bahraini conventional bank licensees must disclose for each standard portfolio described in PD-1.3.20 or PD1.3.25(g), the total exposure (after on- or off-balance sheet netting) that is covered by eligible financial collateral after the application of haircuts;
        (c) All Bahraini conventional bank licensees must disclose the total exposure (after on- or off-balance sheet netting where applicable) that is covered by eligible guarantees or credit derivatives (see CA-4) for each separately disclosed standard portfolio (Standardised approach banks see PD-1.3.20); and
        (d) For exposures after risk mitigation subject to the standardised approach, banks must disclose the amount of exposure (rated and unrated) in each standard portfolio after risk mitigation, as well as any exposures which are deducted.
        Amended: July 2015
        Amended: April 2011
        Amended October 2010
        April 2008

    • Disclosures Related to Counterparty Credit Risk (CCR)

      • PD-1.3.27

        All Bahraini conventional bank licensees must make the following disclosures regarding counterparty credit risk:

        (a) The general qualitative disclosures (PD-1.3.21 and PD-1.3.22) with respect to derivatives and CCR, including:
        •   Discussion of methodology used to assign economic capital and credit limits for counterparty credit exposures;
        •   Discussion of policies for securing collateral and establishing credit reserves; and
        •   Discussion of the impact of the amount of collateral the bank would have to provide if given a credit rating downgrade.
        (b) Gross positive fair value of contracts, netting benefits, netted current credit exposures, collateral held (including type: e.g. cash, government securities, etc.), and net derivatives credit exposure. Also measures for exposure at default or exposure amount under the Standard Method or Current Exposure Method, whichever is applicable, and the notional value of credit derivative hedges, and the distribution of current credit exposure by type of credit exposure (e.g. interest rate contracts, FX contracts, equity contracts, commodity contracts, etc.); and
        (c) Credit derivative transactions which create exposures to CCR (notional value), segregated between use for the institution's own credit portfolio, as well as in its intermediation activities, including the distribution of the credit derivative products used, broken down further by protection bought and sold within each product group.
        Amended: July 2015
        Amended: April 2011
        Amended October 2010
        April 2008

    • Securitisation — Qualitative Disclosure Requirement

      • PD-1.3.28

        All Bahraini conventional bank licensees must disclose the following qualitative information with respect to securitisation activities:

        (a) The general qualitative disclosure requirement (PD-1.3.21) with respect to securitisation (including synthetics), including a discussion of:
        •   The bank's objectives in relation to its securitisation activities, including the extent to which these activities transfer credit risk of the underlying securitised exposures away from the bank to other parties, and including the type of risks assumed and retained with re-securitisation activity. For example, where a bank is particularly active in the market of a senior tranche of re-securitisations of mezzanine tranches related to securitisations of residential mortgages, it should describe the structure of re-securitisations (e.g. senior tranche of mezzanine tranche of residential mortgage); this description should be provided for the main categories of re-securitisation products in which the bank is active;
        •   The nature of other risks (e.g. liquidity risk) inherent in securitised assets;
        •   The roles played by the bank in the securitisation process (for example, is the bank the originator of the underlying risks, is it an investor, is it a servicer, is it a provider of credit enhancement, is it a sponsor of an asset-backed commercial paper facility, is it a liquidity provider, or is it a swap provider?) and an indication of the bank's involvement in each of them; and
        •   A description of the processes in place to monitor changes in the credit and the market risk of securitisation exposures (for example how the behaviour of the underlying assets impacts securitisation exposures) including how these processes differ for re-securitisation exposures;
        •   A description of the bank's policy governing the use of credit risk mitigation to mitigate the risks retained through securitisation and re-securitisation exposures; and
        •   The regulatory capital approaches (e.g. Ratings Based Approach, Internal Assessment Approach or Supervisory Formula Approach) that the bank follows in its securitisation activities, including the types of securitisation exposures to which each approach applies;
        (b) A list of:
        •   The types of SPVs that the bank, as a sponsor, uses to securitise third-party exposures. The bank must indicate whether it has exposure to these SPVs, either on or off-balance sheet;
        •   Affiliated entities that the bank manages or advises and that invest in the securitisation exposures that the bank has securitised or in SPVs that the bank sponsors.
        (c) A summary of the bank's accounting policies for securitisation activities, including:
        •   Whether transactions are treated as sales or financings;
        •   Recognition of gain on sale;
        •   Methods and key assumptions (including inputs) applied in valuing retained interests, including any changes since the last report and the impact of such changes differentiating between securitisation and re-securitisation exposures; and
        •   Changes in methods and key assumptions from the previous period and the impact of the changes;
        •   Treatment of synthetic securitisations if not covered by other accounting policies (e.g. derivatives);
        •   How exposures intended to be securitised (e.g. in subsidiary, associate or SPV or on balance sheet) are valued and whether they are recorded in the banking book or the trading book; and
        •   Policies for recognising liabilities on the balance sheet for arrangements that could require the bank to provide financial support for securitised assets;
        (d) In the banking book, the names of ECAIs used for securitisations and the type of securitisation exposure for which each agency is used.
        (e) Description of the IAA process. The description should include:
        •   Structure of the internal assessment process and relation between internal assessment and external ratings, including information on ECAIs referenced in PD-1.3.28(d) above;
        •   Use of internal assessments other than for IAA capital purposes;
        •   Control mechanisms for the internal assessment process including discussion of independence, accountability, and internal assessment process review;
        •   The exposure type (such as credit cards, home equity , auto and securitisation exposures detailed by underlying type and security type (e.g. RMBS, CMBS, ABS, CDOs) to which the internal assessment process is applied; and
        •   Stress factors used for determining credit enhancement levels, by exposure type (see above for description of "exposure type").
        (f) An explanation of significant changes to any of the quantitative information (e.g. amounts of assets intended to be securitised, movement of assets between banking book and trading book) since the last reporting date.
        Amended: July 2015
        Amended: January 2012
        Amended: April 2011
        Amended October 2010
        April 2008

      • PD-1.3.28A

        Securitisation exposures include, but are not restricted to securities, liquidity facilities, protection provided to securitisation positions, other commitments and credit enhancements such as I/O strips, cash collateral accounts and other subordinated assets. A bank would generally be considered a sponsor if it, in fact or substance, manages or advises a securitisation programme, places securities into the market, or provides liquidity and/ or credit enhancements. The programme may include, for example, ABCP Conduit Programmes and structured investment vehicles. SPVs may include money market mutual funds, and personal and private trusts.

    • Securitisation — Quantitative Disclosure Requirement for Banking Book

      • PD-1.3.29

        All Bahraini conventional bank licensees must disclose the following quantitative information with respect to securitisation activities:

        (a) The total outstanding exposures securitised by the bank and subject to the securitisation framework (broken down into traditional and synthetic), by exposure type. These should be categorised under bands such as credit cards, home equity, etc. Also banks must separately report any securitisation transactions for the year of inception where they do not retain any exposure. Banks should also clearly identify securitisations where they are acting purely as sponsors;
        (b) Securitisations broken down by exposure type showing:
        •   The amount of impaired or past due assets securitised; and
        •   Losses recognised by the bank during the current period by exposure type;
        (c) The total amount of outstanding exposures intended to be securitised, by exposure type. The aggregate amount of securitisation exposures retained or purchased, broken down by exposure type;
        (d) Summary of current year's securitisation activity, including the amount of exposures securitised (by exposure type) and recognised gain or loss on sale by asset type;
        (e) Aggregate amount of:
        •   On- balance sheet securitisation exposures retained or purchased broken down by exposure type; and
        •   Off- balance sheet securitisation exposures broken down by exposure type;
        (f) •   Aggregate amount of securitisation exposures retained or purchased and the associated capital charges, broken down between securitisation and re-securitisation exposures and further broken down into a meaningful number of risk weight bands for each regulatory capital approach used (e.g. SA, RBA, IAA and SFA);
        •   Exposures that have been deducted entirely from Tier 1 capital, credit enhancing I/Os deducted from total capital, and other exposures deducted from total capital should be disclosed separately by exposure type;
        (g) For securitisations subject to the early amortisation treatment, the following items should be disclosed by underlying asset type:
        •   The aggregate drawn exposures attributed to the seller's and investors' interests;
        •   The aggregate (standardised) capital charges incurred by the bank against its retained shares of the drawn balances and undrawn lines; and
        •   The aggregate (standardised) capital charges incurred by the bank against the investors. shares of drawn balances and undrawn lines; and
        (h) Aggregate amount of re-securitisation exposures retained or purchased broken down according to:
        •  Exposures to which credit risk mitigation is applied and those not applied; and
        •   Exposures to guarantors broken down according to guarantor credit worthiness categories or guarantor name.
        Amended: July 2015
        Amended: January 2012
        Amended: April 2011
        Amended October 2010
        April 2008

    • Securitisation – Quantitative Disclosure for Trading Book

      • PD-1.3.29A

        (a) The total amount of outstanding exposures securitised by the bank and defined under the securitisation framework (broken down into traditional/synthetic) by exposure type, separately for securitisations of third-party exposures for which the bank acts only as sponsor;
        (b) The total amount of outstanding exposures intended to be securitised broken down by exposure type;
        (c) Summary of current period's securitisation activity, including the total amount of exposures securitised (by exposure type), and recognised gain or loss on sale by exposure type;
        (d) Aggregate amount of exposures securitised by the bank for which the bank has retained some exposures and which is subject to the market risk approach (broken down into traditional/synthetic), by exposure type;
        (e) Aggregate amount of:
        •   On-balance sheet securitisation exposures retained or purchased broken down by exposure type; and
        •   Off-balance sheet securitisation exposures broken down by exposure type;
        (f) Aggregate amount of securitisation exposures retained or purchased separately for:
        •   Securitisation exposures retained or purchased subject to Comprehensive Risk Measure for specific risk; and
        •   Securitisation exposures subject to the securitisation framework for specific risk broken down into a meaningful number of risk weight bands for each regulatory capital approach (e.g. SA, RBA, SFA and concentration ratio approach).
        (g) Aggregate amount of:
        •   The capital requirements for the securitisation exposures subject to Comprehensive Risk Measure, broken down into appropriate risk classifications (e.g. default risk, migration risk and correlation risk).
        •   The capital requirements for the securitisation exposures (re-securitisation or securitisation), subject to the securitisation framework broken down into a meaningful number of risk weight bands for each regulatory capital approach (e.g. SA, RBA, SFA and concentration ratio approach).
        •   Securitisation exposures that are deducted entirely from Tier 1 capital, credit enhancing I/Os deducted from total capital, and other exposures deducted from total capital should be disclosed separately by exposure type.
        (h) For securitisations subject to the early amortisation treatment, the following items by exposure type for securitised facilities:
        •   The aggregate drawn exposures attributed to the seller's and investors' interests;
        •   The aggregate capital charges incurred by the bank against its retained (i.e. the seller's) shares of the drawn balances and undrawn lines; and
        •   The aggregate capital charges incurred by the bank against the investor's shares of drawn balances and undrawn lines.
        (i) Aggregate amount of re-securitisation exposures retained or purchased broken down according to:
        •   Exposures to which credit risk mitigation is applied and those not applied; and
        •   Exposures to guarantors broken down according to guarantor credit worthiness categories or guarantor name.
        Amended: July 2015
        Added: January 2012

    • Market Risk Disclosures for Banks using the Standardised Approach

      • PD-1.3.30

        Banks using the standardised approach must disclose the following items:

        (a) The general qualitative disclosure requirements for market risk (PD-1.3.21), identifying the portfolios covered by the standardised approach;
        (b) The capital requirements for:
        •   Interest rate risk (separate disclosures are required for securitisation exposures in PD-1.3.29 and PD-1.3.29A);
        •   Equity position risk;
        •   Foreign exchange risk; and
        •   Commodity risk;
        on an end period basis, as well as showing the maximum and minimum values during the period for each category of market risk shown above; and
        (c) The disclosures under PD-1.3.30 (b) above must be followed by detailed quantitative information about the nature and extent of interest-rate sensitive assets and liabilities and off-balance sheet exposures (e.g. breakdown of fixed and floating rate items and the net interest margin earned, and the duration and effective interest rate of assets and liabilities). These disclosures should be by each portfolio identified in PD-1.3.30 (a), showing their related gains and losses. Also, the effect on the value of assets, liabilities and capital for a 200bp change in interest rates should be disclosed.
        Amended: July 2015
        Amended: January 2012
        Amended: April 2011
        Amended October 2010
        April 2008

    • Market Risk Disclosures for Banks Using the Internal Models Approach (IMA) for Trading Portfolios

      • PD-1.3.31

        All banks using internal models for their trading portfolios must disclose the following:

        (a) The general qualitative disclosure requirement (PD-1.3.21) for market risk identifying the portfolios covered by the IMA. In addition, a discussion of the extent of, and methodologies for, compliance with the "Prudent valuation guidance" for positions held in the trading book (see Section CA-8.2);
        (b) An explanation and articulation of the internal criteria on which the bank's internal capital adequacy assessment is based. It should include a description of the methodologies used to achieve a capital adequacy assessment that is consistent with the soundness standards;
        (c)
        •   A description of the models used for each portfolio covered by the IMA, including assumptions used in calculating (e.g. confidence level, holding period, etc.);
        •   A description of stress testing applied to each IMA portfolio; and
        •   A description of the approach used for back-testing/validating the accuracy and consistency of the internal models and modelling processes;
        (d) A disclosure of the scope of model acceptance by the CBB;
        (e) For the incremental risk capital charge and the comprehensive risk capital charge the methodologies used and the risks measured through the use of internal models. Included in the qualitative description should be:
        • The approach used by the bank to determine liquidity horizons;
        • The methodologies used to achieve a capital assessment that is consistent with the required soundness standard; and
        • The approaches used in the validation of the models;
        (f) Summarised quantitative information about price-related market risk to equity and commodity markets where banks use the IMA. These disclosures should include the magnitude of the exposure on a weekly or monthly basis (during the reporting period);
        (g) For trading portfolios under the IMA:
        •   The high, mean and low VaR values over the reporting period and period-end;
        •   The high, mean and low stressed VaR values over the reporting period and period-end;
        •   The high, mean and low incremental and comprehensive risk capital charges over the reporting period and period-end; and
        •   A comparison of VaR estimates with actual gains/losses experienced by the bank, with analysis of important "outliers" in back-test results;
        (h) A presentation of the overall daily profits or exposures for aggregate market risk over the reporting period. At an absolute minimum, summarised aggregate quantitative information relating to monthly VaR results should be presented, giving an overview of the extent of market risk-related activities;
        (i) Information showing the actual performance of the VaR models for the period, giving the number of times actual losses exceeded VaR estimates; and
        (j) Summarised quantitative information for significant concentrations of foreign exchange exposure by currency, broken down by hedged and unhedged exposures.
        Amended: July 2015
        Amended: January 2012
        Amended: April 2011
        Amended October 2010
        April 2008

    • Operational Risk Disclosures

      • PD-1.3.32

        All banks must disclose the general qualitative disclosures (PD-1.3.21) and also the approach(es) for operational risk which the bank employs to control such risk, and disclosures of any issues considered to be individually significant.

        April 2008

    • Operational Risk Qualitative Disclosures

      • PD-1.3.33

        The following additional qualitative disclosures (to Paragraph PD-1.3.21) should be made for operational risk:

        (a) Policies to incorporate operational risk measures into the management framework — for example budgeting, target-setting, and performance review and compliance;
        (b) Policies and processes:
        (i) To help track loss events and potential exposures;
        (ii) To report to these losses, indicators and scenarios on a regular basis; and
        (iii) To review the reports jointly by risk and line managers;
        (c) Policies on the loss mitigation process via contingency planning, business continuity planning, staff training and enhancement of internal controls, as well as business processes and infrastructures; and
        (d) A statement of how banks manage and control operational risks arising from pending legal actions.
        Amended: April 2016
        April 2008

    • Operational Risk Quantitative Disclosures

      • PD-1.3.33A

        The following quantitative disclosures should be made for operational risk:

        (a) The calculation of the capital charge or RWA equivalent for operational risk;
        (b) Indicators of operational risk exposures, such as gross income; and
        (c) Material legal contingencies including pending legal actions and a discussion and estimate of the potential liabilities.
        Added: April 2016

    • Disclosure Requirements for Equity Positions in the Banking Book

      • PD-1.3.34

        All banks must make the following disclosures for any equities held in the Banking Book:

        (a) The general qualitative disclosure requirement (PD-1.3.21) with respect to equity risk, including:
        •   Differentiation between holdings on which capital gains are expected and those taken under other objectives including for relationship and strategic reasons; and
        •   Discussion of important policies covering the valuation and accounting of equity holdings in the banking book. This includes the accounting policies and valuation methodologies used, including key assumptions and practices affecting valuation as well as significant changes in these practices;
        (b) The types and nature of investments, including the amount that can be classified as quoted on an active market or privately held;
        (c) The cumulative realised gains (or losses) arising from sales or liquidations in the reporting period;
        (d) Total unrealised gains and losses recognised in the balance sheet but not through the P&L;
        (e) Any unrealised gains and losses included in Tier One and Tier Two capital; and
        (f) Capital requirements broken down by appropriate equity groupings, consistent with the methodology, as well as the aggregate amounts and type of equity investments subject to any supervisory transition or grandfathering provisions regarding regulatory capital requirement.
        Amended: April 2011
        Amended October 2010
        April 2008

    • Disclosures Concerning Interest Rate Risk in the Banking Book (IRRBB)

      • PD-1.3.35

        All banks must make the following disclosures concerning interest rate risk in the banking book:

        (a) The general qualitative disclosure requirement (PD-1.3.21), outlining the nature of IRRBB and key assumptions, including assumptions concerning loan prepayments and the behaviour of deposits without a fixed maturity, and the frequency of IRRBB measurement; and
        (b) The increase (or decline) in earnings or economic value (or relevant measure used by management) for upward and downward rate shocks according to management's method for measuring IRRBB, broken down by currency (where applicable).
        Amended: April 2011
        Amended October 2010
        April 2008

    • Compliance

      • PD-1.3.36

        The Annual Report must include a declaration by the external auditor that it did not come across any violations of the requirements below during the course of its audit work that would have any material negative impact on the financial position of the bank:

        (a) The Bahrain Commercial Companies Law (as amended);
        (b) The CBB Law where a violation might have had a material negative effect on the business of the bank or on its financial position;
        (c) The Regulations and Directives issued by the CBB, including Volume 6 (Capital Markets); and
        (d) The Rulebook of the licensed exchange and associated Resolutions, Rules and Procedures.
        Amended: July 2013
        Amended: January 2012
        Amended: October 2011
        Amended: April 2011
        Amended: January 2011
        Amended October 2010
        April 2008

      • PD-1.3.37

        The Annual Report must disclose the amount of any penalties paid to the CBB during the period of the report together with a factual description of the reason(s) given by the CBB for the penalty (see Section EN-1.3). Bahraini conventional bank licensees which fail to comply with this requirement will be required to make the disclosure in the annual report of the subsequent year and will be subject to an enforcement action for non-disclosure.

        Amended: October 2019
        Amended: October 2010
        April 2008

  • PD-1.3A PD-1.3A Disclosures in the Annual Audited Financial Statements Report for Branches of Foreign Banks

    • PD-1.3A.1

      All branches of foreign bank licensees must disclose in their annual audited financial statements the amount of any penalties paid to the CBB during the period of the report together with a factual description of the reason(s) given by the CBB for the penalty (see Section EN-1.3). Branches which fail to comply with this requirement will be required to make the disclosure in the annual audited financial statements of the subsequent year and will be subject to an enforcement action for nondisclosure.

      Added: October 2019

  • PD-1.4 PD-1.4 Additional Disclosure in the Annual Audited Financial Statements of Banks Listed on a Licensed Exchange

    • PD-1.4.1

      The content of this Section is applicable only to Bahraini conventional bank licensees listed on a licensed exchange.

      Amended: July 2015
      Amended: January 2011
      April 2008

    • PD-1.4.2

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

      April 2008

    • — Interests of Approved Persons

      • PD-1.4.3

        Without prejudice to any other requirement of Bahrain law (or any other direction of the CBB), the Directors' Report Section of the annual report of banks should contain details of the interests of approved persons in the shares of such banks. Such details should include:

        (a) Total interests in the shares of such banks by individual persons mentioned above; and
        (b) Changes in such interests from the previous financial year to the current financial year.
        Amended: July 2015
        Amended October 2010
        April 2008

      • PD-1.4.4

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

        Amended: July 2015
        April 2008

  • PD-1.5 PD-1.5 Press Release on Annual Results

    • PD-1.5.1

      Where a bank chooses to issue a narrative press release in conjunction with or in relation to the publication of its audited annual financial statements as required under Paragraph PD-1.2.3, the press release must indicate the net income for the last quarter.

      Added: October 2011

  • PD-2 PD-2 Semi-Annual Disclosure Requirements

    • PD-2.1 PD-2.1 Disclosure by Retail Branches of Foreign Banks

      • PD-2.1.1

        The content of this Section is applicable only to retail bank branches (licensed by the CBB) of foreign banks.

        Amended October 2010
        April 2008

      • PD-2.1.2

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

        (a) A statement of financial position (balance sheet),
        (b) A statement of income;
        (c) A statement of cash flow; and
        (d) Where applicable, a statement of comprehensive income.
        Amended: April 2012
        Amended: October 2010
        April 2008

      • PD-2.1.3

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

        Amended October 2010
        April 2008

      • PD-2.1.4

        The statements referred to under Paragraph PD-2.1.2 must be published in one local newspaper within 2 months from the statements' date.

        Amended: April 2011
        Amended October 2010
        April 2008

      • PD-2.1.5

        Banks must submit a newspaper copy of the statements (referred to under Paragraph PD-2.1.2) to the CBB within two business days of publication. The copy should be accompanied by a letter clearly showing on which date and in which publication(s) the statements were published.

        Amended: April 2011
        Amended October 2010
        April 2008

  • PD-3 PD-3 Quarterly Disclosure Requirements

    • PD-3.1 PD-3.1 Publication of Reviewed (Unaudited) Quarterly Financial Statements for Bahraini Conventional Banks

      • PD 3.1.1

        The content of this section is only applicable to Bahraini conventional bank licensees licensed by the CBB.

        Amended: July 2015
        Amended October 2010
        April 2008

      • PD 3.1.2

        Banks must prepare reviewed (unaudited) quarterly financial statements in accordance with IFRS for the first three quarters of their financial year.

        April 2008

      • PD 3.1.3

        Banks' unaudited quarterly financial statements must be reviewed by their external auditor who must also make a statement regarding the results of such review. Such review and statement should be made in accordance with the applicable International Standard on Review Engagements.

        Amended: October 2011
        Amended: October 2010
        April 2008

      • PD 3.1.4

        Extracts from the reviewed quarterly financial statements (including at a minimum the statement of financial position (balance sheet), the statements of income, cash flow, and changes in equity and, where applicable the statement of comprehensive income must be published in one Arabic and one English daily newspaper widely available in Bahrain and on the bank's website within 45 calendar days of the end of the quarter to which such statements relate. (See Paragraph PD-5.1.2 for non-listed Bahraini conventional wholesale banks).

        Amended: July 2015
        Amended: April 2012
        Amended: January 2012
        Amended: April 2011
        Amended October 2010
        April 2008

      • PD 3.1.5

        Banks must submit a newspaper copy of the statements (referred to under Paragraph PD-3.1.4) to the CBB within two business days of publication. The copy should be accompanied by a letter clearly showing on which date and in which publication(s) the statements were published.

        Amended: July 2015
        Amended: April 2011
        Amended October 2010
        April 2008

      • PD-3.1.5A

        Banks must publish the disclosures required by Appendices PD-1 to PD-4 (as mentioned in Section PD-A.2) on their website in accordance with the deadline required under Paragraph PD-3.1.4.

        Added: July 2015

      • Additional Requirements for Semi Annual Disclosures

        • PD 3.1.6

          In addition to the requirements of paragraphs PD-3.1.1 to PD-3.1.5 above, banks must make all the quantitative disclosures required by section PD-1.3 with their half-yearly financial statements on their website, within 2 months of the end of the half-yearly financial statements, but the qualitative disclosure requirements of the Paragraphs listed below may be dispensed with at the option of the bank in their half-yearly statements:

          (a) PD-1.3.7 (a) to (b);
          (c) PD-1.3.14;
          (d) PD-1.3.21PD-1.3.22;
          (e) PD-1.3.26 (a);
          (f) PD-1.3.27 (a);
          (g) PD-1.3.28 (a) to (c);
          (h) PD-1.3.30 (a);
          (i) PD-1.3.31 (a) to (d);
          (j) PD-1.3.34 (a); and
          (k) PD-1.3.35 (a).
          Amended: April 2016
          Amended: July 2015
          Amended: April 2012
          Amended: January 2011
          Amended October 2010
          April 2008

        • PD-3.1.7

          Banks must retain an ongoing archive of all applicable public disclosures required by Sections PD-1 and PD-3, including the required appendices on their website. This archive must contain historical data (as required depending upon implementation date) for a minimum period of five years.

          Added: July 2015

    • PD-3.2 PD-3.2 Special Arrangements for Newly-Established Banks

      • PD 3.2.1

        Newly-established banks are not required to follow the publication requirements of section PD-3.1 for the first three quarters of their operation or until the commencement of their second financial year of operation (whichever period is the longer).

        April 2008

      • PD 3.2.2

        After the above period has expired, all newly-established Bahraini conventional bank licensees must follow the publication requirements of Section PD-3.1. Newly-established banks must follow the requirements for annual reporting.

        Amended: July 2015
        April 2008

  • PD-4 PD-4 Other Public Disclosure Requirements

    • PD-4.1 PD-4.1 [This Section was deleted in October 2012 and requirements are now included in Section BC-4.3]

      • PD-4.1.1

        [This Paragraph was deleted in October 2012]

        Deleted: October 2012

      • [Deleted]

        • PD-4.1.2

          [This Paragraph was deleted in October 2012]

          Deleted: October 2012

        • PD-4.1.3

          [This Paragraph was deleted in October 2012]

          Deleted: October 2012

        • PD-4.1.4

          [This Paragraph was deleted in October 2012]

          Deleted: October 2012

        • PD-4.1.5

          [This Paragraph was deleted in October 2012]

          Deleted: October 2012

      • [Deleted]

        • PD-4.1.6

          [This Paragraph was deleted in October 2012]

          Deleted: October 2012

        • PD-4.1.7

          [This Paragraph was deleted in October 2012]

          Deleted: October 2012

    • PD-4.2 PD-4.2 Disclosure to Commercial Customers of Base Rate of Interest on Overdrafts and Short-Term Loans

      • PD-4.2.1

        The content of this Section is applicable to all retail banks licensed by the CBB.

        Amended October 2010
        April 2008

      • PD-4.2.2

        The CBB requires all retail banks to display, by a conspicuous notice, their base rate of interest on BD overdrafts and short-term revolving facilities (see also Paragraph BC-4.3.14).

        Amended: July 2015
        Amended October 2010
        April 2008

      • PD-4.2.3

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

        April 2008

      • PD-4.2.4

        Retail banks must display a list of current charges including any standard charges and commissions that will be applied by the bank to individual services and transactions. See Section BC-4.3 for further details.

        Amended: July 2015
        April 2008

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

      • PD-4.3.1

        The content of this Section is applicable to all retail banks licensed by the CBB.

        Amended October 2010
        April 2008

      • PD-4.3.2

        The CBB requires all retail banks referring (directly or indirectly) to the protection of deposits in related marketing materials and in general notices featured within banking halls and in account documentation, including the annual report, to prominently disclose the following statement:

        •   'Deposits held with [name of conventional bank licensee] in the Kingdom are covered by the Regulation Protecting Deposits and Unrestricted Investment Accounts issued by the Central Bank of Bahrain in accordance with Resolution No (34) of 2010'.
        Amended: July 2015
        Amended October 2010
        April 2008

      • PD-4.3.3

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

        Amended October 2010
        April 2008

      • PD-4.3.4

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

        Amended October 2010
        April 2008

      • PD-4.3.5

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

        April 2008

    • PD-4.4 PD-4.4 Press Releases Concerning Financial Statements

      • PD-4.4.1

        The content of this Section is applicable to all Bahraini conventional bank licensees.

        Amended: July 2015
        Added: July 2012

      • PD-4.4.2

        Conventional bank licensees must obtain the CBB's prior approval before issuing any press releases regarding interim or annual financial statements. Conventional bank licensees must not publish or cause to be published, any media statements until such times as CBB approval has been granted.

        Added: July 2012

      • PD-4.4.3

        In implementing Rule PD-4.4.2, the CBB will provide the conventional bank licensee with a written decision within two business days of the receipt of request for approval.

        Added: July 2012

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

    • PD-5.1 PD-5.1 Publication and Disclosure of Financial Results

      • Existing Requirements

        • PD-5.1.1

          [This Paragraph was deleted in April 2012].

          Deleted: April 2012

      • Criteria for Application for Disclosure via the Internet

        • PD-5.1.2

          Non-listed Bahraini conventional wholesale banks may apply to the CBB to disclose their quarterly financial statements via the internet. If a bank wishes to cease disclosure of quarterly financial statements via the local press, it must satisfy the following criteria:

          (a) The bank has no shareholders resident in Bahrain;
          (b) The bank has no customers resident in Bahrain. Customers include borrowers, depositors, investment account holders or persons from whom the bank earns fees or commissions. 'Customers' in this context would not include other banks, but would include Bahraini corporations, the Government of Bahrain and its agencies, and private individuals (whether high net worth or not); and
          (c) The bank does not market itself in any way to residents of Bahrain. In particular, the bank should not market funds or other financial products to residents, even if the bank has no on balance sheet assets or liabilities arising from Bahraini residents.
          Amended: July 2015
          Amended October 2010
          April 2008

        • PD-5.1.3

          [This Paragraph was deleted in April 2016.]

          Deleted: April 2016
          Amended October 2010
          April 2008

  • PD-6 PD-6 Corporate Governance Disclosure to Shareholders

    • PD-6.1 PD-6.1 General Requirements

      • PD-6.1.1

        In addition to the corporate governance disclosure required under Paragraph PD-1.3.8, banks must also disclose to their shareholders the following information:

        (a) Names of shareholders owning 5% or more and, if they act in concert, a description of the voting, shareholders' or other agreements among them relating to acting in concert, and of any other direct and indirect relationships among them or with the bank licensee or other shareholders;
        (b) Information on the directorships held by the directors on other boards;
        (c) [This Subparagraph was deleted in January 2012];
        (d) [This Subparagraph was deleted in January 2012];
        (e) [This Subparagraph was deleted in January 2012];
        (f) Audit fees charged by the external auditor;
        (g) Non-audit services provided by the external auditor and fees;
        (h) Reasons for any switching of auditors and reappointing of auditors; and
        (i) Conflict of Interest — any issues arising must be reported, in addition describe any steps the board takes to ensure directors exercise independent judgment in considering transactions and agreements in respect of which a director or executive officer has a material interest.
        Amended: January 2012
        October 2010