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  • CIU-A.1 CIU-A.1 Scope and Purpose

    • CIU-A.1.1

      Module CIU (Collective Investment Undertakings) sets out the Central Bank of Bahrain’s regulatory framework governing collective investment undertakings (‘CIUs’) that are domiciled in the Kingdom of Bahrain (‘Bahrain domiciled CIUs’). It also prescribes requirements relating to CIUs that are domiciled in an overseas jurisdiction (‘overseas domiciled CIUs’) and offered to investors within or from the Kingdom of Bahrain.

      Added: April 2022

    • CIU-A.1.2

      Module CIU constitutes the CBB’s Directive relating to CIUs and it is issued under the powers available to the CBB under Article 38 of the Central Bank of Bahrain and Financial Institutions Law 2006 (‘CBB Law’). Module CIU is applicable to all CBB licensees and other relevant persons mentioned in the Module.

      Added: April 2022

    • CIU-A.1.3

      A CIU is defined as a scheme or arrangement, the sole object of which is the collective investment of funds raised from the public or through private placements in accordance with a defined investment policy, the purpose or effect of which is to enable the participants to receive profits or income out of the investments. The definition of CIUs includes closed-ended funds as well as open-ended funds.

      Added: April 2022

    • CIU-A.1.4

      The following are excluded from the scope of this Module:

      a) A contract of insurance, insurance linked investment products or investments managed as part of a takaful contract;
      b) Unrestricted investment accounts offered by Islamic bank licensees;
      c) Unilateral arrangements for a licensee to hold or manage assets on a discretionary or non-discretionary basis;
      d) Arrangements entirely between bodies corporate who are members of the same group, or entirely between family members or between the corporate body and its own shareholders;
      e) Pension, annuity and other employee benefit schemes organised and managed for the benefit of employees or for another corporate body;
      f) Structured products which do not represent collective pooling interests under a pre-defined investment policy;
      g) Cash savings schemes;
      h) Overseas domiciled exchange traded funds which are listed securities;
      i) Equity-based and financing-based crowdfunding offers;
      j) Securities issued by Special Purpose Vehicles in connection with direct participation of investors into private equity which is subject to requirements of OFS Module of the CBB Rulebook – Volume 6;
      k) Securities issuance by Special Purpose Vehicles as part of a securitisation of structure including sukuk; and
      l) The issue of securities and raising of capital by companies publicly or through private placements for the purpose of raising capital for financing the operations of the company which fall under the CBB Rulebook – Volume 6, Offering of Securities Module (Module OFS).
      Amended: October 2022
      Added: April 2022

    • CIU-A.1.5

      Bahrain domiciled CIUs may be established under the various legal forms which may include the following:

      (a) A CIU established by way of a contract (“contractual CIU”) between the operator and the investors; or
      (b) A trust established under the Legislative Decree No. 23 of 2016 in Respect of Trusts; or
      (c) A cell within a Protected Cells Company established pursuant to Legislative Decree No. 22 of 2016 in respect to Protected Cells Companies; or
      (d) Investment Limited Partnership established pursuant to Law No. 18 of 2016 in Respect to Investment Limited Partnerships; or
      (e) A Bahraini Shareholding Company (closed) established under the Bahrain Commercial Companies Law.
      Added: April 2022

    • CIU-A.1.6

      Module CIU distinguishes between CIUs that are classified as retail CIUs, which may be offered to all types of investors, and exempt CIUs, which may only be offered to accredited investors. Retail CIUs are subject to more restrictive investment rules, aimed at protecting the general retail investor. Private Investment Undertakings (PIUs) may only be offered ultra-high net-worth investors.

      Added: April 2022

    • CIU-A.1.7

      Module CIU distinguishes between authorisation and notification depending on the type of CIU as follows:

      Bahrain domiciled retail CIUs Authorisation
      Bahrain domiciled exempt CIUs Notification
      Overseas domiciled retail CIUs Authorisation
      Overseas domiciled exempt CIUs Notification
      Private Investment Undertakings (PIUs) Notification
      Added: April 2022

    • CIU-A.1.8

      For the purposes of Paragraph CIU-A.1.7, the authorisation process involves a review of the application and the related documentation by the CBB and an approval/rejection. Notification would involve submission of information/documents for the purpose of CBB’s monitoring.

      Added: April 2022