SIO-14.3 Directions
CBB Policy
SIO-14.3.1
The CBB may issue Directions to stablecoin issuers or individuals under supervisory powers granted to it by the CBB Law. These powers are broad in nature and effectively allow the CBB to issue whatever Directions it reasonably believes are required to achieve its statutory objectives.
Added: July 2025SIO-14.3.2
The types of Directions that the CBB may issue in practice vary and will depend on the individual circumstances of a case. Generally, however, Directions require a stablecoin issuer or individual to undertake specific actions in order to address or mitigate certain perceived risks. They may also include restrictions on a stablecoin issuer’s activities until those risks have been addressed – for instance, a ban on the acceptance of new customers.
Added: July 2025SIO-14.3.3
The CBB is conscious of the powerful nature of a Direction and, in the case of a stablecoin issuer, the fact that it subordinates the role of its Board and management on a specific issue. The CBB will carefully consider the need for a Direction, and whether alternative measures may not achieve the same end. Where feasible, the CBB will try to achieve the desired outcome through persuasion, rather than recourse to a Direction.
Added: July 2025SIO-14.3.4
In considering whether to issue a Direction, the criteria taken into consideration by the CBB include the following:
(a) The seriousness of the actual or potential contravention, in relation to the requirement(s) concerned and the risks posed to the licensee’s clients, market participants and other stakeholders;(b) In the case of an actual contravention, its duration and/or frequency of the contravention; the extent to which it reflects more widespread weaknesses in controls and/or management; and the extent to which it was attributable to deliberate or reckless behaviour; and(c) The extent to which the CBB’s supervisory objectives would be better served by issuance of a Direction as opposed to another type of regulatory action.Added: July 2025Procedure for Issuing Directions
SIO-14.3.5
Proposals to issue Directions are carefully considered against the criteria listed in Section SIO-14.3. They require the approval of a Director or more senior official of the CBB and include the statement “This is a formal Direction as defined in section SIO-14.3 of the CBB Rulebook”.
Added: July 2025SIO-14.3.6
The subject of the Direction will normally be given 30 days from the Direction’s date of issuance in which to make objections to the CBB concerning the actions required. This must be done in writing and addressed to the issuer of the original notification. Should an objection be made, the CBB will make a final determination, within 30 days of the date of the objection, as specified in Articles 125(c) and 126 of the CBB Law.
Added: July 2025SIO-14.3.7
In extreme circumstances, where the CBB believes that immediate action is required to prevent real damage to Bahrain’s financial markets, its users or to customers of the stablecoin issuer concerned, it may cancel or amend a license, as specified in Article 48(g) of the CBB Law, or place a stablecoin issuer under administration according to Article 130(2) of the CBB Law, or suspend a license according to Article 131 of the pre-mentioned Law. These measures may be used in conjunction with directions.
Added: July 2025
