CP-A CP-A Introduction
CP-A.1 CP-A.1 Purpose
Executive Summary
CP-A.1.1
The purpose of this Module is to set out a summary of rules and regulations establishing a Deposits and Unrestricted Investment Accounts Protection Scheme (the 'Scheme') for compensating Eligible Depositors (as defined under Section CP-2.1) when the banks (referred to under Section CP-2.1) are unable, or are likely to be unable, to satisfy claims against them.
October 2012CP-A.1.2
The body established to operate and administer the compensation scheme is the Deposits and Unrestricted Investment Accounts Protection Board (the 'Board'). This Module describes the rules that would allow the Board to:
(a) Administer and implement the scheme; and(b) Establish rules of operation.October 2012CP-A.1.3
This Module also describes:
(a) Who is eligible for receiving compensation;(b) How the scheme will be funded;(c) Who the contributing banks are; and(d) What are contributing banks' responsibilities regarding the implementation of the scheme.October 2012Legal Basis
CP-A.1.4
The legal basis for this Module is the Regulation issued pursuant to CBB Resolution No.(34) for the year 2010 with respect to promulgating a regulation protecting deposits and unrestricted investment accounts, which in turn was issued pursuant to Article 188 of the Central Bank of Bahrain and Financial Institutions Law 2006 ('CBB Law'). The Regulation is applicable to all retail banks, conventional and Islamic.
October 2012CP-A.1.5
For an explanation of the CBB's rule-making powers and different regulatory instruments, see Section UG-1.1.
October 2012CP-A.2 CP-A.2 Key Requirements
CP-A.2.1
The Board is, subject to and in accordance with the terms and conditions of the Regulation, responsible for the activities set out under Paragraph CP-1.1.4.
October 2012CP-A.2.2
The Board will convene and be ready to carry out its duties if either of the events set out in Section CP-1.2 arise.
October 2012CP-A.2.3
The Scheme will apply to
Eligible Accounts (as defined in Paragraph CP-2.1.2) held with the Bahrain offices of retail banks which are licensed by the CBB.October 2012CP-A.2.4
Upon the convening of the Board in accordance with Section CP-1.2, the Board calculates the total amount of compensation to be paid under the Scheme in the case of the relevant bank, as well as the amount of compensation payable under the Scheme to each
Eligible Depositor of such relevant bank.October 2012CP-A.2.5
Upon receipt by the Board of confirmation from the (Lead) Mandated bank that the actions referred to in Section CP-2.4 have been completed, each
Eligible Depositor is sent a certificate in duplicate (included under Part B, Supplementary Information as Appendix CP-1A) by the Board informing suchEligible Depositor of the amount of compensation payable to him/her under the Scheme in respect of his/herEligible Account(s) with the relevant bank.October 2012CP-A.2.6
The CBB requires all conventional retail bank licensees referring (directly or indirectly) to the protection of
Deposits in related marketing materials and in general notices featured within banking halls and in account documentation, including Annual Reports, to prominently disclose the statement set out under Paragraph CP-2.5.1.October 2012CP-A.3 CP-A.3 Module History
CP-A.3.1
This Module was first issued in July 2004 by the BMA and updated in October 2007 to reflect the transfers of responsibilities to the CBB. Following the issuance of the Resolution No.(34) in respect of protecting Deposits and Unrestricted Investment Accounts in December 2010, the Module was amended in October 2012 to be in line with the new Regulation and to include previous requirements that were in place in the originally issued Module CP. 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 2012CP-A.3.2
The most recent changes made to this Module are detailed in the table below:
Summary of Changes
Module Ref. Change Date Description of Changes CP-A to CP-2 10/2012 Amendments due to the introduction of Resolution No.(34) of 2010. CP-2.3 04/2014 Added requirement for eligible accounts report for the deposits protection scheme. CP-2.1.4 10/2014 Corrected sentence structure. Evolution of the Module
CP-A.3.3
Prior to the development of the Rulebook, the CBB had issued various circulars representing regulations covering the operations and establishment of the Deposit Protection Scheme and the Deposit Protection Board. These circulars have now been consolidated into the Compensation Module. These circulars and their evolution into this Module are listed below:
Circular Ref. Date of Issue Module Ref. Circular Subject OG/423/93 28 Nov 1993 CP-1–CP-2 Deposit Protection Scheme (the "Scheme") OG/425/94 21 Dec 1994 CP-2.4 Deposit Protection October 2012Effective Date
CP-A.3.4
The contents of this Module were effective from their date of issuance.
October 2012CP-A.3.5
Capitalised terms used in this Module shall, save as the context requires otherwise, have the meanings ascribed to them in the Regulation.
October 2012CP-A.3.6
In the event of an inconsistency between the rules of this Module and the rules of the Regulation, the rules of the Regulation shall prevail.
October 2012