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  • 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 a subsidiary and for any major change (regardless of type and/or effect) to the bank’s strategy or corporate plan prior to implementation (See also Paragraph HC-1.2.6).

      Amended: July 2021
      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