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  • CFP-A.1 CFP-A.1 Purpose and Scope

    • CFP-A.1.1

      This Module sets out the Central Bank of Bahrain’s (CBB) regulations applicable to financing-based and equity-based offers on crowdfunding platforms and to crowdfunding platform operators. Reward-based or donation-based crowdfunding models are excluded from the scope of this Module. The authorisation requirements for crowdfunding platform operators undertaking regulated ancillary services in the Kingdom of Bahrain are stipulated in the Authorisation Module (Module AU) of CBB Rulebook - Volume 5. Crowdfunding platform operators are also subject to ongoing provisions contained in this Module and the following modules of CBB Rulebook Volume 5:

      (a) Common Modules: Principles of Business Module, Auditors and Accounting Standards Module, Financial Crime Module, Enforcement Module (Modules PB, AA, FC and EN)
      (b) CBB Reporting Requirements Module (Module BR);
      (c) General Requirements Module (Module GR); and
      (d) High-Level Controls Module (Module HC).
      Added: April 2022

    • CFP-A.1.2

      Crowdfunding platform operator refers to a person licensed by the CBB to operate a platform through an online portal, on which funding to businesses (Person to Business – P2B) and (Business to Business – B2B) are allowed. Licensees may also host income producing real estate on the platform which can include both residential and commercial properties.

      Added: April 2022

    • CFP-A.1.3

      Crowdfunding generally involves the raising of funds usually through an online portal or other electronic media from a large number of people who make relatively small financial contributions to the fund raising. The CBB recognises both conventional and sharia complaint crowdfunding business models. The crowdfunding platform operator may operate either one or both of the following models:

      1. Financing-based crowdfunding: people or businesses (lenders) lend money to businesses (borrowers) hosted on the platform in return for interest/profit and repayment of principal over a pre-specified period.
      2. Equity-based crowdfunding: businesses (issuers) raise capital through issuance of ordinary shares, or other equity instruments like preferred shares, and people or business (investors) invest in these instruments in return for dividends, capital appreciation etc.
      Added: April 2022

    • CFP-A.1.4

      For the purposes of this Module, equity crowdfunding offers exclude financial instruments such as SAFE agreements (Simple Agreement for Future Equity) or similar products which has conversion features contingent on certain pre-determined conditions being met.

      Added: April 2022

    • Legal Basis

      • CFP-A.1.5

        This Module contains the CBB’s Directive, Regulation and Resolutions (as amended from time to time) applicable to crowdfunding platform operators under Volume 5 of the CBB Rulebook. It is issued under the powers available to the CBB under Articles 37 to 42, 44 to 48 and 180 of the Central Bank of Bahrain and Financial Institutions Law 2006 (‘CBB Law’).

        Added: April 2022