• [ M ]

    • MDB

      A multilateral development bank, which refers to any bank or lending or development body established by agreement between, or guaranteed by, two or more countries, territories or international organizations, other than for purely commercial purposes.

      Added: October 2018

    • Major investment

      A major investment is defined as any acquisition or investment in the capital instruments of another entity by a Bahraini Islamic bank licensee which is equivalent to or more than 10% of the Bahraini Islamic bank licensee's consolidated total capital.

      Added: October 2016

    • Malus

      A malus is a feature of a remuneration arrangement that reduces the amount of a deferred bonus, so that the amount of the payout is less than the amount of the bonus award.

      Added: January 2014

    • Managing Shari'a compliant financial instruments

      Managing Shari'a compliant financial instruments means managing on a discretionary basis Shari'a compliant financial instruments on behalf of another person (see LR-1.3.27).

    • Managing Shari'a profit sharing investment accounts

      Managing a Shari'a profit sharing investment account means managing an account, portfolio or fund, whereby a sum of money is placed with the service provider on terms that a return will be made according to an agreed Shari'a compliant profit-sharing arrangement, based either on a mudaraba or musharaka partnership (see LR-1.3.21).

    • Market (as referred to in the definition of licensed exchange)

      "Market" means a place at which, or a facility (whether electronic or otherwise) by means of which, offers or invitations to sell, purchase or exchange securities or futures contracts (including options and derivatives) regularly made on a centralised basis, being offers or invitations that are intended or may reasonably be expected to result, whether directly or indirectly, in the acceptance or making, respectively, of offers to sell, purchase or exchange securities or futures contracts (whether through that place or facility or otherwise).

      Added: January 2011

    • Market risk

      The risk of loss in on- or off-balance-sheet positions arising from movements in market prices. The risks subject to the market risk capital requirement of Module CA are:

      (a) The risks pertaining to benchmark profit rate related instruments & equities in the trading book; and
      (b) Foreign exchange, commodities and inventory risks throughout the bank.
      Added: January 2015

    • Material Risk-Takers

      The following table provides a non-exhaustive list of examples of key positions that should be considered as material risk-takers:

      High-level category Suggested business lines
      Heads of significant business lines and any individuals within their control who have a material impact of the bank's risk profile Fixed income
      Foreign exchange
      Commodities
      Securitisation
      Sales areas
      Investment banking
      Commercial banking
      Equities
      Structured finance
      Lending
      Trading areas

      Banks should consider how the examples in the above table apply in relation to their own organisational structure.

      Added: January 2014

    • Memorandum of association

      The Memorandum of Association is the first constitutional document of a company containing fundamentals such as the name, the company's objects and powers, and its original share capital.

    • Mind and Management

      The presence of persons with executive authority to act on behalf of the bank and who have knowledge of the customers of the bank and their business, and the business of the bank where it acts as principal.

    • Minority interest

      Has the same meaning as used in IFRS.

      Added: January 2015

    • MLRO

      Money Laundering Reporting Officer of each bank as more particularly described in Chapter FC-4.

    • Money Laundering

      Means the activity constituting a criminal offence pursuant to Article 2 of the AML Decree Law No. 4 dated 29th January 2001 (see Appendix FC 1). More generally, money laundering refers to the process of hiding or disguising the true origin or ownership of the proceeds of criminal activities.

    • Money-market instruments

      Those classes of instruments which are normally dealt in on the money market.

    • Mudaraba

      A partnership in profit between capital and work. It may be conducted between investment account holders as providers of funds and the Islamic bank as a mudarib. The Islamic bank announces its willingness to accept the funds of investment amount holders, the sharing of profits being as agreed between the two parties, and the losses being borne by the provider of funds except if they were due to misconduct, negligence or violation of the conditions agreed upon by the Islamic bank. In the latter cases, such losses would be borne by the Islamic bank. A Mudaraba contract may also be concluded between the Islamic bank, as a provider of funds, on behalf of itself or on behalf of investment account holders, and business owners and other craftsmen, including farmers, traders etc. Mudaraba differs from what is known as speculation which includes an element of gambling in buying and selling transactions.

    • Mudaraba (Muqaradah) sukuk (bonds)

      These are investment sukuk that represent ownership of units of equal value in the Mudaraba equity and are registered in the names of holders on the basis of undivided ownership of shares in the Mudaraba equity and its returns according to the percentage of ownership of share. The owners of such sukuk are the rabbul-mal.

    • Murabaha

      Sale of goods with an agreed upon profit mark up on the cost. Murabaha sale is of two types. In the first type, the Islamic bank purchases the goods and makes them available for sale without any prior promise from a customer to purchase them. In the second type, the Islamic bank purchases the goods ordered by a customer from a third party and then sells these goods to the same customer. In the latter case, the Islamic bank purchases the goods only after a customer has made a promise to purchase them from the bank.

    • Musharaka

      A form of partnership between the Islamic bank and its clients whereby each party contributes to the capital of partnership in equal or varying degrees to establish a new project or share in an existing one, and whereby each of the parties becomes an owner of the capital on a permanent or declining basis and shall have his due share of profits. However, losses are shared in proportion to the contributed capital. It is not permissible to stipulate otherwise.

    • Musharaka sukuk

      These are investment sukuk that represent ownership of Musharaka equity. It does not differ from the Mudaraba sukuk except in the organization of the relationship between the party issuing such sukuk and holders of these sukuk, whereby the party issuing sukuk forms a committee from the holders of the sukuk who can be referred to in investment decisions.