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  • Governance Requirements

    • CRA-15.2.2

      A digital token issuer must be headed by an effective Board. The size and composition of the Board should be commensurate with the size, nature and complexity of its business.

      Added: April 2023

    • CRA-15.2.3

      The Board is responsible for ensuring that the digital token issuer complies with the relevant provisions of the CBB Law, its regulations, resolutions and directives (including these Rules and other applicable Rules of the CBB Rulebook).

      Added: April 2023

    • CRA-15.2.4

      The Board has, both collectively and on an individual basis, an obligation to acquire and maintain sufficient knowledge and understanding of the digital token issuer’s business to enable them to discharge their duties.

      Added: April 2023

    • CRA-15.2.5

      The Board must:

      (a) Act honestly and in good faith in the best interests of the digital token issuer and token holders;
      (b) Exercise reasonable care, skill and diligence;
      (c) Exercise the powers it has diligently and in line with applicable laws and not misuse such powers;
      (d) Exercise its powers independently and without subordinating such powers to the will of others;
      (e) Monitor, on an ongoing basis, the execution of the functions delegated to the digital token issuer’s employees and be satisfied that they are performing their functions in accordance with their obligations;
      (f) Identify and manage the risks relating to the digital token issuer and its activities;
      (g) Monitor, on an ongoing basis, compliance with the relevant requirements of CBB Law, its regulations, resolutions and directives (including these Rules and other applicable Rules of the CBB Rulebook);
      (h) Avoid conflicts of interest in so far as it is possible and, where it is not, ensure – inter alia by way of disclosure and internal conflicts of interest management procedures – that investors are treated fairly;
      (i) Be responsible for the digital token issuer’s compliance with the AML/CFT requirements; and
      (j) Adopt a management structure commensurate with the digital token issuer’s size, complexity, structure and risk profile.
      Added: April 2023

    • CRA-15.2.6

      A digital token issuer must ensure that its appointed senior management employees:

      (a) Possess sufficient knowledge and expertise in the field of information technology, blockchain technology, digital tokens and their underlying technologies; and
      (b) Maintain sufficient knowledge and understanding of the digital token issuer’s business to enable them to discharge their function in a diligent manner.
      Added: April 2023

    • CRA-15.2.7

      Where a member of senior management leaves the organisation or is removed or replaced, such a change must be immediately disclosed to the digital token advisor and the digital token holders.

      Added: April 2023

    • CRA-15.2.8

      A digital token issuer must ensure that its Board and senior management are fit and proper, taking into account the following:

      (a) They are suitably qualified to assume the position including having the relevant experience and track record in managing the business and affairs of the digital token issuer;
      (b) They have not been disqualified to be a director by a court, regulator or any other competent authority;
      (c) There is no pending criminal charge against the person in any court of law, whether within or outside Bahrain, for an offence involving fraud, integrity, dishonesty or mismanagement of an entity;
      (d) They have not had any civil enforcement action initiated against them by any court of law or other competent authority, whether within or outside Bahrain;
      (e) They have not:
      (i) Been convicted, whether within or outside Bahrain, of an offence involving fraud, integrity, dishonesty other criminal conduct;
      (ii) Been convicted of an offence under the securities laws or any other laws within or outside Bahrain relating to the capital market;
      (iii) Contravened any provision of any law relating to a financial sector or companies in general, whether within or outside Bahrain involving dishonesty, incompetence, negligence, misconduct or malpractice;
      (iv) Engaged in any business practices appearing to the CBB to be deceitful, oppressive or otherwise improper, whether unlawful or not, or which otherwise reflect discredit in the method of conducting business;
      (v) Engaged in or has been associated with any other business practices or otherwise conducted himself in such a way as to cast doubt on his competence and soundness of judgement; or
      (vi) Engaged in or has been associated with any conduct that cast doubt on his/her ability to act in the best interest of investors, having regard to the reputation, character, financial integrity and reliability.
      Added: April 2023

    • CRA-15.2.9

      The digital token issuer, must submit a fit and proper declaration of its Board and senior management to:

      (a) The CBB at the time of submitting the application for offering of digital tokens; and
      (b) The digital token advisor for any subsequent appointment to its board or senior management.
      Added: April 2023