UG UG Users' Guide
UG-A UG-A Introduction
UG-A.1 UG-A.1 Purpose
UG-A.1.1
The Bahrain Monetary Agency ("BMA"), in its capacity as the regulatory and supervisory authority for all financial institutions in Bahrain, issues regulations that licensees are legally obliged to comply with. These regulations are contained in the BMA Rulebook.
UG-A.1.2
The Rulebook is divided into 5 Volumes, covering different areas of financial services activity. Volume 2 (Islamic Banks) covers all Islamic banks licensed by the Agency. Conventional banks are covered in Volume 1, and representative offices of banks are covered in Volume 5, which will be issued in 2007.
UG-A.1.3
This Users' Guide provides guidance on:
(a) the status and application of the Rulebook, with specific reference to Volume 2 (Islamic Banks);(b) the structure and design of the Rulebook; and(c) its maintenance and version control.UG-A.2 UG-A.2 Regulation history
UG-A.2.1
This User's Guide — Module UG — was first issued in January 2005 together with the rest of Volume 2 (Islamic Banks). All subsequent changes to this Module are dated with the month and year at the base of the relevant page and in the Table of Contents: Chapter UG-3 of this Module provides further details on Rulebook maintenance and version control.
UG-1 UG-1 Rulebook status and application
UG-1.1 UG-1.1 Legal basis
UG-1.1.1
Volume 2 (Islamic Banks) of the BMA Rulebook is issued by BMA pursuant to Amiri Decree Law No. 23 of 1973 (the "BMA Law").
UG-1.2 UG-1.2 Status of provisions
UG-1.2.1
The contents of the Rulebook have the formal status either of Rules or Guidance.
UG-1.2.2
Rules have a binding effect. If a licensee breaches a Rule to which it is subject, it is liable to enforcement action by BMA and, in certain cases, criminal proceedings by the Office of the Public Prosecutor.
UG-1.2.3
Guidance is not binding. It is material that helps inform a particular Rule or set of Rules, or provides other general information. Where relevant, compliance with Guidance will generally lead the BMA to assess that the business has complied with the rule(s) to which the Guidance relates. Conversely, failure to comply with Guidance will generally be viewed by the BMA as tending to suggest breach of a Rule.
UG-1.2.4
The status of each paragraph within the Rulebook can be identified by its text format, as follows:
(a) Rules are in bold, font size 12. The paragraph reference number is also highlighted in a coloured box.(b) Guidance is in normal type, font size 11.UG-1.2.5
The Agency's interpretation of all Rules and Guidance in this Volume is final.
UG-1.3 UG-1.3 Application
UG-1.3.1
Rules and Guidance contained in Volume 2 of the BMA Rulebook apply to all Islamic licensed banks subject to the provisions of the BMA Law, except for representative offices of banks which are subject to the relevant requirements contained in Volume 5 (Specialised Firms) and conventional banks which are covered in Volume 1.
UG-1.3.2
Where relevant, individual sections of Volume 2 may identify which specific Rules and Guidance apply to particular types of banking licensee.
UG-1.4 UG-1.4 Effective date
UG-1.4.1
Version 1 of Volume 2 (Islamic Banks) of the BMA Rulebook was first issued in January 2005. It replaces all regulations previously issued with respect to Islamic banks.
UG-1.4.2
For reference, these superseded regulations are listed in the Rulebook, under the 'Regulation history' section of the appropriate Module in each Volume. The list includes the reference number of the previously superseded circular or regulation, its date and subject heading.
UG-2 UG-2 Rulebook structure and format
UG-2.1 UG-2.1 Rulebook structure
Rulebook Volumes
UG-2.1.1
The Rulebook is divided into 5 Volumes, covering different areas of financial services activity, as follows:
Volume 1 Conventional Banks Volume 2 Islamic Banks Volume 3 Insurance Volume 4 Investment Business Volume 5 Specialised Activities UG-2.1.2
Volume 5 (Specialised Activities), covers money changers; leasing firms; factoring firms; representative offices; and providers of ancillary services to the financial sector.
Rulebook contents (overview)
UG-2.1.3
Except for Volume 5, the basic structure of each Rulebook is the same. Each Volume starts with a contents page and User's Guide. Subsequent material is organised underneath the following headings:
(a) High Level Standards(b) Business Standards(c) Regulatory Reporting and(d) Enforcement and RedressUG-2.1.4
Volume 5 is organised by the category of specialised firm concerned.
UG-2.1.5
The material in Volumes 1–4 is contained in Modules, each covering a specific area of requirements (e.g. High-level Controls). In turn, each Module is divided into Chapters, Sections and Paragraphs, as detailed below.
UG-2.1.6
Each Volume has its own appendix Volume containing relevant reporting forms and a glossary.
UG-2.2 UG-2.2 Volume structure
Modules
UG-2.2.1
Rulebook Volumes are subdivided into Modules, arranged in groups according to their subject matter, underneath the headings listed in paragraph UG-2.1.3 above.
UG-2.2.2
Each Module in a Volume is referenced using a two-letter code which is usually a contraction or abbreviation of its title. These codes are used for cross-referencing within the text.
Chapters
UG-2.2.3
Each Module consists of chapters, categorised into two types:
(a) A standard introductory chapter (referenced with a letter: e.g. UG-A); andUG-2.2.4
The introductory chapter summarises the purpose of the Module, its history (in terms of changes made to its contents) and, where applicable, lists previously issued circulars and regulations that were replaced by the Rulebook Module.
Sections and paragraphs
UG-2.2.5
Chapters are further sub-divided into Sections (numbered consecutively after the Chapter number: e.g. FC-1.1, FC-1.2, FC-1.3 etc). In turn, Sections are sub-divided into Paragraphs (numbered consecutively after the Chapter and Section numbers: e.g. FC-1.1.1, FC-1.1.2, FC-1.1.3 etc.). Where appropriate, sub-section headings may be used, to guide the reader through a Section: sub-section headings are italicised and unnumbered, and act purely as an indicator (without limitation as to the status of the paragraphs that follow.
Table of contents
UG-2.2.6
Each Volume's contents page lists all the Modules contained within it (Part A), and the information contained in the relevant appendix Volume (Part B).
UG-2.2.7
The contents page of each Module lists the chapters, section and, in some Modules, sub-sections it contains, and the latest version number of each section in issue.
UG-2.3 UG-2.3 Format and page layout
Headers
UG-2.3.1
The top of each page in the Rulebook identifies the Volume, Module and Chapter in question. Each Module is a separate document. New Chapters start on a fresh page.
Footers
UG-2.3.2
The bottom of each page in the Rulebook (on the left hand side) identifies the Module in question, its section and page number. Page numbering starts afresh for each Section: the total number of pages in each respective Section is shown as well as the individual page number. The bottom right hand side shows an issue date. The Contents Page for each Module is given its own separate version number. In addition, the Contents page lists the latest issue date for each Section in that Module. The Contents page thus acts as a summary checklist of the current version in force for each section. Further explanation is provided in Section UG-3.1 below.
Defined terms
UG-2.3.3
Defined terms used in the Rulebook are underlined. Each Volume has its own glossary listing defined terms and giving their meaning. Definitions of terms used apply only to the Volume in question. It is possible for the same term to be used in a different Volume with a different meaning.
Cross-references
UG-2.3.4
Cross-references are highlighted in yellow. Two active cross-references are shown in Paragraph UG-2.3.5 below. Any cross-references given in a text state the Module code, followed by the numbering convention for the chapter and section being referred to. For example, the cross-reference FC-1.2.3 refers to the third Paragraph in the second Section of the first Chapter of the Financial Crimes Module. Many references will be quite general, referring to a Module or Chapter rather than a specific Paragraph.
Text format
UG-2.3.5
Each paragraph is assigned a complete reference to the Module, Chapter, and Section, as well as its own paragraph number, as explained in UG-2.3.4 above. The format of the paragraph reference and paragraph text indicates their status as either a Rule or Guidance, as explained in UG-1.2.4 above.
UG-3 UG-3 Rulebook maintenance and availability
UG-3.1 UG-3.1 Maintenance
Quarterly Updates
UG-3.1.1
Changes to the Rulebook are made quarterly. After the end of each calendar quarter, the BMA automatically reissues the contents page of each Module. Users can thus determine whether they have access to the latest version of these pages, by checking that they have those marked with the most recent date.
UG-3.1.2
The contents page of each Module lists the current version number of each Section. The Module contents pages thus act as a checklist for users to verify that they have the current requirements.
UG-3.1.3
Where changes to the regulations are required, then the affected pages are re-issued, alongside the contents pages for each Module. Where possible, only the relevant Section or Chapter is re-issued, rather than the whole Module.
UG-3.1.4
A summary of any changes made to a Module is included in the 'Regulation history' section of each Module. The table summarises the nature of the change made, the date of the change and the Module components affected.
UG-3.1.5
The updates are posted to the BMA website, together with a summary of changes for that quarter. Licensees are in addition e-mailed the summary of each quarter's changes. Hard-copy users are required to print off the updated pages from the website to incorporate in their Rulebook in order to keep it current. The website version of the Rulebook acts at all times as the definitive version of the Rulebook.
UG-3.2 UG-3.2 Rulebook availability and ordering details
UG-3.2.1
The Rulebook is available on the BMA website, on CD-ROM and in hard copy.
Ordering details
UG-3.2.2
Order forms for CD-ROMs and hard copies are included in an annexure to the Users' Guide (please refer to the end of this module).
UG-3.2.3
Please complete all relevant boxes on the order form, taking particular care to provide full contact and address details. The completed form should be sent (accompanied with the appropriate payment) to:
Rulebook Section
Rulebook Section — Licensing & Policy Directorate
Bahrain Monetary Agency
PO Box 27
Manama
Kingdom of Bahrain
Tel: + 973 - 17 54 7413
Fax: + 973 - 17 53 0228
E-mail: rulebook@bma.gov.bh.
Web: www.bma.gov.bhBMA Rulebook Order Form
INSTRUCTIONS Please complete all relevant boxes, taking particular care to provide full contact and address details. The completed form should be sent (accompanied with the appropriate payment) to:
Bahrain Monetary Agency
(Rulebook Section, Licensing & Policy Directorate)
PO Box 27
Manama
Kingdom of Bahrain
For enquiries, please contact:
Phone: +973 - 17 547 413
E-mail: rulebook@bma.gov.bhORDER REQUIREMENT Rulebook Volume Number Hard-Copy1:
number required (at BD 110 each)CD-ROM2:
number required (at BD 5 each)Cost: 1 — Parts A & B Conventional Banks 2 — Parts A & B Islamic Banks 3 — Parts A & B Insurance Licensees
(Due Oct 2004)4 — Parts A & B Investment Business Licensees (Due 2006) 5 — Parts A & B Specialised Licensees (Due 2006) POSTAGE The above prices include postage for delivery within the Kingdom of Bahrain. Postage for international orders will be charged at cost: please contact BMA (see above) for details of rates and delivery options. 1: Hard copy subscribers are provided the latest version of the Rulebook Volume(s) ordered, which they can keep up to date by printing off new or amended pages from the BMA website (www.bma.gov.bh).
2: CD-ROM subscribers are sent the latest available version of the complete Rulebook (i.e. the CDROM contains all Volumes that have been issued).Total Cost:
ADDRESS / PAYMENT DETAILS Name Institution (if applicable) Full Postal Address
Contact e-mail / telephone / fax E-mail:
Telephone:
Fax:Please remember to enclose your payment with the order Payment should be by cheque drawn on a Bahraini-licensed bank, payable in Bahraini Dinars. Cheques should be made out to "Bahrain Monetary Agency". Persons ordering from outside Bahrain should contact the BMA (see above) for postage rates and payment options.
