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  • EN-3 EN-3 Directions

    • EN-3.1 EN-3.1 BMA policy

      • EN-3.1.1

        The Agency may issue Directions to licensees or individuals under supervisory powers granted to it by the BMA Decree — Law No. 23 of 1973 ("BMA Law"). These powers are broad in nature, and effectively allow the Agency to issue whatever Directions it reasonably believes are required to achieve its statutory objectives.

      • EN-3.1.2

        The types of Directions that the Agency may issue in practice vary and will depend on the individual circumstances of a case. Generally, however, Directions require a licensee or individual to undertake specific actions in order to address or mitigate certain perceived risks. They may also include restrictions on a licensee's activities until those risks have been addressed — for instance, a ban on the acceptance of new customers.

      • EN-3.1.3

        The Agency is conscious of the powerful nature of a Direction and, in the case of a licensee, the fact that it subordinates the role of its Board and management on a specific issue. The Agency will carefully consider the need for a Direction, and whether alternative measures may not achieve the same end. Where feasible, the Agency will try to achieve the desired outcome through persuasion, rather than recourse to a Direction.

      • EN-3.1.4

        In considering whether to issue a Direction, the criteria taken into consideration by the Agency include the following:

        (a) the seriousness of the actual or potential contravention, in relation to the requirement(s) concerned and the risks posed to the licensee's customers, market participants and other stakeholders;
        (b) in the case of an actual contravention, its duration and/or frequency of the contravention; the extent to which it reflects more widespread weaknesses in controls and/or management; and the extent to which it was attributable to deliberate or reckless behaviour; and
        (c) the extent to which the Agency's supervisory objectives would be better served by issuance of a Direction as opposed to another type of regulatory action.

    • EN-3.2 EN-3.2 Procedure for issuing Directions

      • EN-3.2.1

        Proposals to issue Directions are carefully considered against the criteria listed in section EN-3.1. They require approval of an Executive Director or more senior official of the Agency, and include the statement "This is a formal Direction as defined in Chapter EN-3 of the BMA Rulebook".

      • EN-3.2.2

        The subject of the Direction will normally be given 10 business days from the Direction's date of issuance in which to make representations to the Agency concerning the actions required. This must be done in writing, and addressed to the issuer of the original notification. Should a representation be made, the Agency will make a final determination, again normally within 10 business days of the date of the representation. Where urgent action is required, the Agency may reduce the period allowed for representations.

      • EN-3.2.3

        In extreme circumstances, where the Agency believes that immediate action is required to prevent real damage to Bahrain's financial markets, its users or to customers of the licensee concerned, it may not be practical to allow a right of representation. In such cases, the Agency must state a justification for the withdrawal of the right to make representations.