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  • Managing Conflicts of Interests

    • CIU-1.5.15

      CIU operators must take reasonable steps to identify, manage and monitor conflicts of interest in order to prevent them from adversely affecting the interests of the CIU participants. In particular, the CIU operators must:

      (a) Segregate, within their own operating environment, tasks and responsibilities which may be regarded as incompatible with each other or which may potentially generate systematic conflicts of interest (e.g. using ‘information barriers’ or ‘Chinese walls’);
      (b) Clearly disclose the general nature or sources of conflicts of interest to the CIU participants before undertaking business on their behalf;
      (c) Ensure that arrangements with any connected parties are conducted at commercial terms (arm’s length basis) and that such relationships are disclosed in all documents distributed to CIU participants, except however, that no investments may be made by in a financial instrument issued by a connected party in excess of 20% of the net assets;
      (d) Not lend CIU assets to a relevant person of the CIU, except in a stock lending arrangement with a licensed bank in respect of any securities with aggregate value not exceeding 20% of the net assets of the CIU’s assets, provided that it is disclosed in the offering; and
      (e) Develop appropriate policies and procedures to identify and prevent or manage conflicts of interest internally and with third parties such as the custodian and fund administrator and make the policy available to CIU participants.
      Added: April 2022

    • CIU-1.5.16

      Notwithstanding CIU-1.5.15 (c), the custodian and /or the fund administrator of a Bahrain domiciled CIU must not be participants in the CIU in respect of which they are contractually engaged to offer custody and/or fund administration services as the case may be.

      Added: April 2022