PCD-4.1 PCD-4.1 General Requirements
PCD-4.1.1
SPVs are subject to the consolidation, deduction, risk weighting and
qualifying holdings rules and regulations mentioned in this Module and Chapter CM-5.Amended: April 2014
Amended: January 2011
October 2010PCD-4.1.2
All locally incorporated banks 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: April 2014
October 2010PCD-4.1.2A
For purposes of Paragraph PCD-4.1.2, 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: April 2014PCD-4.1.3
The CBB requires any
Bahraini conventional bank licensee associated with an SPV to confirm the following points in any request for approval under Paragraph PCD-4.1.2:(a) The purpose of the SPV;(b) The nature of the relationship between theBahraini 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 theBahraini 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) Whether the bank is providing any guarantees, warranties or financial/liquidity support of any kind to the SPV.Amended: April 2014
Amended: April 2011
October 2010PCD-4.1.4
Where the SPV is consolidated into the accounts of a locally incorporated 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.
October 2010PCD-4.1.5
Where a locally incorporated 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 the SPV. All locally incorporated 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.
Amended: April 2014
October 2010
