SIO-12 Change in Substantial Shareholding, Control & Business Transfer
SIO-12.1 Change in Substantial Shareholding
SIO-12.1.1
Any person or persons, acting in concert who intends to acquire, directly or indirectly, shares in a stablecoin issuer by virtue of which the person(s) would, if the acquisition is carried out, become a substantial shareholder of the stablecoin issuer , must obtain the approval of the CBB, prior to entering into an agreement with the stablecoin issuer.
Added: July 2025SIO-12.1.2
In Paragraph SIO-12.1.1 “substantial shareholder” means a person who alone or together with his associates:
(a) Holds not less than 5% of the shares in the stablecoin issuer; or(b) Is in a position to control not less than 5% of the votes in the stablecoin issuer.Added: July 2025SIO-12.1.3
Any person applying for approval under Paragraph SIO-12.1.1 must submit to the CBB a written application along with supporting documents that sets out:
(a) The name of the applicant;(b) In the case where the applicant is a company:
(i) Its place of incorporation;(ii) Its substantial shareholders;(iii) Its directors and chief executive officer; and(iv) Its principal business.(c) In the case where the applicant is a natural person:
(i) Person’s nationality;(ii) Person’s occupation; and(iii) Details regarding directorship in company;(d) List of all the companies in which the applicant has a substantial shareholding;(e) The percentage of shareholding and voting power that the applicant has in the stablecoin issuer;(f) The percentage of shareholding and voting power the applicant is seeking to have in the stablecoin issuer;(g) The reasons for making the application;(h) The mode and structure, as appropriate, under which the increase in shareholding would be carried out;(i) Information relating to the financing of the proposed acquisition;(j) Whether the applicant will seek representation on the board of directors of the stablecoin issuer; and(k) Any other information that may facilitate the determination of the CBB as to whether the applicant is a fit and proper person for the purposes of Paragraph SIO-12.1.5 (a).Added: July 2025SIO-12.1.4
The CBB may require the applicant to furnish it with such information or documents as the CBB considers necessary in relation to the application and the applicant shall furnish such additional information or documents as required by the CBB.
Added: July 2025SIO-12.1.5
The CBB may approve an application made under Paragraph SIO-12.1.1 of this Module if the CBB is satisfied that:
(a) The applicant is a fit and proper person to be a substantial shareholder;(b) Having regard to the applicant’s likely influence, the stablecoin issuer will or will continue to conduct its business prudently and in compliance with the provisions of this Module; and(c) It would not be contrary to the interests of the public to do so.Added: July 2025SIO-12.1.6
Where the CBB, based on its assessment, concludes that the proposed acquisition is not in the interest of the market, it shall reject the application and notify the applicant and provide reasons for its decision.
Added: July 2025SIO-12.2 Business Transfer
SIO-12.2.1
A stablecoin issuer must seek prior written approval from the CBB before transferring any of its business to a third party.
Added: July 2025SIO-12.2.2
The CBB’s approval to transfer business will only be given where:
(a) The transfer of business will not damage or otherwise prejudice the legitimate interests of the stablecoin issuer’s clients;(b) The transferee is duly licensed to undertake the business which it is to receive; and(c) The CBB is satisfied that the transfer will not breach any applicable laws or regulations and would not create any supervisory concerns.Added: July 2025SIO-12.2.3
In assessing the criteria outlined in Paragraph SIO-12.2.2, the CBB will, amongst other factors, take into account the financial strength of the transferee; its capacity to manage the business being transferred; its track record in complying with applicable regulatory requirements; and (where applicable) its track record in treating clients fairly. The CBB will also take into account the impact of the transfer on the transferor, and any consequences this may have for the transferor’s remaining clients.
Added: July 2025SIO-12.2.4
A stablecoin issuer seeking to obtain the CBB’s permission to transfer business must apply to the CBB in writing, in the form of a covering letter together with supporting attachments. Unless otherwise directed by the CBB, the application must provide:
(a) Full details of the business to be transferred;(b) The rationale for the proposed transfer;(c) If applicable, an assessment of the impact of the transfer on any clients directly affected by the transfer, and any mitigating factors or measures;(d) If applicable, an assessment of the impact of the transfer on the transferor’s remaining business and clients, and any mitigating factors or measures; and(e) Evidence that the proposed transfer has been duly authorised by the transferor (such as a certified copy of a Board resolution approving the transfer).Added: July 2025SIO-12.2.5
Stablecoin issuers intending to apply to transfer business are advised to contact the CBB at the earliest possible opportunity, prior to submitting a formal application, in order that the CBB may determine the nature and level of documentation to be provided and the need for an auditor or other expert opinion to be provided to support the application. The documentation specified in Paragraph SIO-12.2.4 may be varied by the CBB, depending on the nature of the proposed transfer, such as the materiality of the business concerned and its impact on customers.
Added: July 2025SIO-12.2.6
The CBB’s approval may be given subject to any conditions deemed appropriate by the CBB. In all cases where additional requirements are imposed, the CBB shall state the reasons for doing so.
Added: July 2025SIO-12.2.7
At its discretion, the CBB may require that a notice of proposed transfer of business be published in the Official Gazette, and/or in at least two local daily newspapers (one in Arabic, the other in English), in order to give affected clients, the right to comment on the proposed transfer. Where such a requirement has been imposed, the CBB’s decision on the application will also be published in the Official Gazette and in at least two local daily newspapers. In all such cases, the costs of publication must be met by the transferor.
Added: July 2025SIO-12.2.8
Publication under Paragraph SIO-12.2.7 will generally only be required where a proposed transfer involves a large number of clients or is otherwise deemed necessary in order to protect customer interests.
Added: July 2025SIO-12.3 Change in Control
SIO-12.3.1
Any person seeking to acquire control of a stablecoin issuer must seek prior written approval of the CBB.
Added: July 2025SIO-12.3.2
For the purposes of rule Paragraph SIO-12.3.1, “control” means the right to appoint the majority of the directors or to control the management or policy decisions exercisable by a person or persons acting individually or in concert, directly or indirectly, including by virtue of their shareholding or management rights or shareholders agreements or voting agreements, or in any other manner.
Added: July 2025SIO-12.3.3
For the purposes of Paragraph SIO-12.3.1, a person(s) seeking to acquire control must request for the CBB’s approval for taking control over a stablecoin issuer or taking any action that may lead to control by submitting Form 2 and shall also contain such particulars and information and be accompanied by such documents as the CBB may specify.
Added: July 2025SIO-12.3.4
The CBB shall, within 60 days from the date of receipt of the request referred to in Paragraph SIO-12.3.3, notify the person intending to take control over a stablecoin issuer of its approval of control, any of the actions which would lead to control, or the refusal thereof as the CBB may determine at its own discretion.
Added: July 2025SIO-12.3.5
The CBB may impose any restrictions that it considers necessary to be observed in case of its approval of control, or any of the actions that would lead to control.
Added: July 2025SIO-12.3.6
The person intending to take control over a stablecoin issuer, may within 30 days of the notification referred to in Paragraph SIO-12.3.4, lodge a grievance against the CBB’s decision to refuse the control or any conditions imposed in respect of such control. The CBB shall decide on the grievance and notify the person intending to take control over the stablecoin issuer of its decision within 30 days from the date of submitting the grievance.
Added: July 2025SIO-12.3.7
The CBB may refuse to give approval for change of control, if the CBB, based on its own assessment, concludes that the change in control would adversely affect financial stability, market integrity and interests of the clients, or if the CBB decides that the person(s), do not meet the fit and proper requirement set by the CBB.
Added: July 2025SIO-12.3.8
Any person who acquires control or shares in breach of the provisions of this Module shall carry out any instructions issued to him by the CBB to transfer such control or shares, or refrain from exercising control or voting rights according to the procedures prescribed in such instructions.
Added: July 2025SIO-12.3.9
A stablecoin issuer must not perform any of the following without prior written approval of the CBB:
(a) Merge, amalgamate or enter into a partnership with any person in Bahrain or elsewhere, except in the ordinary course of business;(b) Transfer all or a major part of its assets or liabilities in Bahrain or elsewhere, without prejudice to the provisions of Chapter 6 (Articles 66, 67 & 68) of the CBB Law;(c) Make any modification to its issued or paid-up share capital;(d) Modify its Memorandum and Articles of Association;(e) Engage in major acquisition or investment operations as determined by the CBB.Added: July 2025
