Chapter 4 Chapter 4 Public Offering and Announcement
1. General1.1 Subject to Article (143) of the Commercial Companies Law, all publicity material released in the Kingdom of Bahrain relating to an issue of Debt Securities must be reviewed by the Agency before release and must not be released until the Agency has confirmed to the issuer that it has no further comments thereon.1.2 In addition, such publicity material must comply with all applicable statutory requirements. For these purposes, publicity material does not relate to an issue of Debt Securities if its purpose is the promotion of the issuer or its products or business and not the promotion of the Debt Securities to be issued.1.3 Moreover, circulation is permitted of documents of a marketing nature, such as the invitation or offering fax or electronic form and documents which consist of, or are drafts of, or relate to, agreements to be entered into in connection with the issue of the Debt Securities, provided that any obligations created thereunder to issue, subscribe, purchase or underwrite the Debt Securities are conditional on the offering approval being granted. Such documents will not be considered as falling within the scope of these Guidelines and need not be submitted for prior review.1.4 Any publicity material or announcement referring to a proposed offering by an applicant which is issued prior to the Agency's approval, such application shall state that the application has been or will be made to the Agency for the issuing and offering of and for permission to deal in the Debt Securities concerned. If no such statement is made, the application may be rejected by the Agency.1.5 The issuers must comply with the obligation to maintain confidentiality prior to the announcement of an issue.1.6 Issuers are also reminded that these requirements are not exhaustive and that an applicant for offering must also supply any further documents and information which the Agency may require in a particular case.1.7 No offering document may be issued until the Agency has confirmed to the issuer that it has no further comments thereon.
2. Announcement of Offering2.1 In the case of an offer for sale or an offer for subscription a formal notice stating the information set out in 2.2 below must be published in the newspapers and other forms of media in the prescribed period.2.2 In every case a formal notice stating the following information must be published in the newspapers and other forms of media not less than 5 calendar days before the starting of the offering or dealings commence:—(a) the name and country of incorporation or other establishment of the issuer;(b) the name and country of incorporation or other establishment of the guarantor, in the case of a guaranteed issue;(c) the amount and title of the Debt Securities for which the offering and listing is sought;(d) the address(es) at which copies of the offering document (if any) are available to the public;(e) the date of publication of the notice;(f) in the case of a private placement or selectively marketed securities, the names of the issuing houses involved in the placing;(g) a statement that application has been made to the Agency for the issuing and offering of and permission to deal in the Debt Securities;(h) a statement that the formal notice appears for information purposes only and does not constitute an invitation or offer to acquire, purchase or subscribe for Debt Securities;(i) the date upon which the offering of the Debt Securities are expected to commence; and(j) in the case of an offer for sale or an offer for subscription a statement that applications will only be considered on the basis of the offering document.2.3 Pursuant to Article (142) of the Commercial Companies Law, the issuer must make sufficient copies of the offering document available to the investors, free of charge, at the address(es) referred to in rule 2.2 (d) to satisfy investors' demand for a reasonable period (in the case of an offer for subscription or offer for sale, not being less than the offer period and, in every other case, not being less than 10 days) from the date on which the formal notice is published. In all cases where the offering document is published in the newspapers, it must be accompanied by a statement that copies of the offering document are available to the public at stated address(es) for a similar period.2.4 All offering documents published by a new applicant must be in printed form. However, a new applicant may, to the extent permitted under applicable laws and regulations and the new applicant's own constitutional documents, make additional copies available to the public in electronic format through publication of the offering document (together with the relative application form (if any)) on the new applicant's own website. In such case, the new applicant must confirm:(a) That the contents of the offering document and relative application form (if any) in electronic format are identical with the contents of the offering document and application form (if any) in printed form; and(b) That the offering document and relative application form (if any) are also available in printed form and addresses of the locations where they are available.2.5 Any supplemental offering documents or subsequent amendments to the offering document are also made available in both printed form and electronic format.
3. Subscription Procedures3.1 Subject to Articles (88) and (142) of the Commercial Companies Law, the subscription shall be open for a period not more than three months and if the issue is fully subscribed, then the issuer or underwriter has the right to close it.3.2 Subject to Articles (87), (88) and (142) of the Commercial Companies Law, subscription for the Debt Securities shall take place through one or more paying agents that are licensed to operate in Bahrain or through one of their branches or representatives abroad, through underwriters or such other institutions which shall be approved by the Agency. The subscription amount must be deposited with the paying agent(s) and all the proceeds shall be credited to an account in the name of the issuer.3.3 Subject to Articles (89) and (142) of the Commercial Companies Law, the application form shall be submitted to the paying agent(s) together with the requested amount. The receipt signed and issued by the paying agent(s) shall contain the name of the subscriber, his address, nationality, date of subscription, the number of securities subscribed and amount paid by him. The subscription shall be deemed finalized when the receipt has been issued and the subscriber shall not withdraw his subscription.3.4 Subject to Articles (95) and (142) of the Commercial Companies Law, every subscription that occurs contrary to the effective laws, may invoke the intervention of the court for a declaration of nullity of the offending action, within 30 calendar days of the date on which the subscription period is over.3.5 Subject to Article (144) of the Commercial Companies Law, if 50% or more of the Debt Securities offered for public subscription are covered during the specified period or any other period of extension of subscription, such subscription shall be deemed to have been completed, otherwise the issuer may either cancel the issue and refund the amount thereof to the subscribers or be satisfied with the number of subscribed Debt Securities and cancelling the balance.
4. Penalties Under This Chapter:4.1 Subject to Article (146) of the Commercial Companies Law, in case of violating the conditions and procedures prescribed in the applicable law with respect to the issue of Debt Securities and subscribing therefore, every interested party shall have the right to file an application with the court for rendering the subscription null and void and obliging the issuer to refund the Debt Securities in addition to claiming compensation for any damages suffered.4.2 As per Article (361) of the Commercial Companies Law, which states: "without prejudice to any severer penalty provided for in the Penalties Code or in any other law, imprisonment and a fine not less than five thousand Bahraini Dinars and not exceeding ten thousand Bahraini Dinars or either of these two penalties shall be imposed on:"(a) Any founder, manager or board member who has invited the public to subscribe for Debt Securities in contravention of the provisions of the Commercial Companies Law and this Chapter and whoever has offered these Debt Securities for subscription with his knowledge of this violation.4.3 As per Article (362) of the Commercial Companies Law, which states: "without prejudice to any severer penalty provided for in the Penalties Code or in any other law, a fine not exceeding five thousand Bahraini Dinars shall be imposed on:"(a) Any person who has issued Debt Securities, subscription receipts, interim certificates or has offered them for trading in contravention of the provisions of the Commercial Companies Law and this Chapter.