EN-6.1 EN-6.1 BMA Policy
EN-6.1.1
The Agency may on a very selective basis impose financial penalties on licensees. Their use is generally limited to situations where major breaches of regulatory requirements have taken place and a licensee has failed to respond in an acceptable manner to the concerns expressed by the Agency. Financial penalties are thus normally preceded by the issuance of a Formal Notice and/or Direction.
EN-6.1.2
The level of financial penalty applied is determined by the nature of the contravention and the amount of additional supervisory attention and resources taken up by a licensee's behaviour. The maximum penalty, however, is capped at BD 20,000. The Agency intends that the impact of a penalty should derive more from its signaling effect than from the actual amount of money involved.
EN-6.1.3
As indicated in section EN-1.3, the Agency requires disclosure by licensees in their annual reports of any financial penalties served on them, together with a factual description of the reasons given by the Agency for applying the penalty. In addition, the Agency may publicise the issuance of a financial penalty notice, where there is a strong case that doing so would help achieve the Agency's supervisory objectives. In such instances, the Agency will usually allow the licensee concerned the opportunity to make representations to the Agency before a public statement is issued.
EN-6.1.4
Examples of the types of compliance failings that may lead to the serving of a financial penalty notice include (but are not limited to):
(a) Failures to address persistent delays and/or significant inaccuracies in regulatory reporting to the Agency;(b) Repeated failures to respond to formal requests for information from the Agency, within the deadlines set;(c) The submission of information to the Agency known to be false or misleading; and(d) Major failures in maintaining adequate systems and controls in accordance with the Agency's requirements, subjecting depositors and other customers to significant risk of financial loss.EN-6.1.5
In assessing whether to serve a financial penalty notice, the Agency takes into account the following criteria:
(a) the seriousness of the contravention, in relation to the requirement(s) concerned;(b) the duration and/or frequency of the contravention, and the extent to which it reflects more widespread weaknesses in controls and/or management;(c) the extent to which the contravention was deliberate or reckless;(d) the licensee's past compliance record and conduct following the contravention; and(e) the scope of any other action taken by the BMA or other regulators against the licensee, in response to the compliance failures in question.EN-6.1.6
The imposition of a financial penalty does not preclude the BMA from also using other enforcement measures to remedy the same violation (for instance, a Direction).
