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  • CFP-1.4 CFP-1.4 Client Money

    • CFP-1.4.1

      Crowdfunding platform operators must hold client money, securities or other client assets, separate from its own and are not subject to any lien or other restrictions. Client money must be kept in a client bank account with a retail bank in the Kingdom of Bahrain. Licensees must designate a separate bank account (or sub-account) for each crowdfunding offer. Licensees must establish systems and controls for handling of securities, money or other assets, including maintaining up-to-date records of client assets held.

      Added: April 2022

    • CFP-1.4.2

      Crowdfunding platform operators must appoint their external auditors or independent third-party audit firm to perform an audit on client assets and the licensee’s procedures for handling client assets. The objectives of the audit must include:

      (a) Ensuring that client assets are properly segregated and not comingled with the licensee’s own assets (as per Paragraph CFP-1.4.1);
      (b) The licensee has established and implemented adequate internal control procedures and systems to ensure client assets are always segregated;
      (c) Client assets are not used for purposes other than for crowdfunding arrangements; and
      (d) Fraud risks are adequately controlled and mitigated.
      Added: April 2022

    • CFP-1.4.3

      Funds raised must be released to the issuer within one business day of registering the shares in the share register. In case of financing-based crowdfunding, the money must be released to the borrower within one business day of the completion of fund raising. In all cases, client money may only be released if the criteria for raising the funds has been met i.e. the minimum amount required in the offering statements has been met and there has not been any material adverse change to the crowdfunding offer.

      Added: April 2022

    • CFP-1.4.4

      Crowdfunding platform operators must have mechanisms in place to refund the money to lenders/investors within 7 working days if:

      (a) due to any reason the crowdfunding offer is withdrawn by the platform;
      (b) the subscription amount is less than the minimum required in accordance with the offering statement; or
      (c) the offer is oversubscribed, and the platform does not allow oversubscription.
      Added: April 2022