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  • ES-1.3 ES-1.3 Module AU (Authorisation)

    • ES-1.3.1

      Module AU covers (i) the licensing of persons undertaking regulated investment services; and (ii) the approval of persons undertaking controlled functions in licensees ('approved persons').

      Amended: January 2007

    • ES-1.3.2

      The Module sets out when these two types of authorisation are required, and the associated authorisation conditions that have to be satisfied in order for authorisation to be granted.

      Amended: January 2007

    • ES-1.3.3

      With respect to licensing, an investment firm license is required by all persons undertaking, by way of business, regulated investment services within or from the Kingdom of Bahrain. Regulated investment services are fully defined in Section AU-1.4, but in summary they cover the following activities:

      (a) Dealing in financial instruments as principal;
      (b) Dealing in financial instruments as agent;
      (c) Arranging deals in financial instruments;
      (d) Managing financial instruments;
      (e) Safeguarding financial instruments (i.e. a custodian);
      (f) Advising on financial instruments; and
      (g) Operating a collective investment undertaking (i.e. an operator).
      Amended: January 2007

    • ES-1.3.4

      There are 3 categories of investment firm license, determined by the regulated investment services undertaken. Category 1 investment firms may undertake all regulated investment services. Category 2 investment firms may undertake all regulated investment services, except the activity of dealing in financial instruments as principal. Finally, Category 3 investment firms may only undertake the activities of arranging or advising on financial instruments. Only Category 1 and 2 investment firms may hold client assets.

    • ES-1.3.5

      A licensee may hold itself out as an Islamic investment firm, but only if all its activities are Shari'a compliant. Islamic investment firms are required to comply with certain additional requirements, such as the need to appoint a Shari'a supervisory board.

      Amended: July 2007

    • ES-1.3.6

      Module AU also deals with the requirements and conditions for approved persons, i.e. those wishing to undertake a controlled function in an investment firm licensee. Controlled functions are those of:

      (a) Director;
      (b) Chief Executive or general manager;
      (c) Head of function;
      (d) Compliance officer;
      (e) Money Laundering Reporting Officer;
      (f) [This Subparagraph was deleted in October 2013];
      (g) Member of Shari'a Supervisory Board;
      (h) Financial instruments trader; and
      (i) Investment consultant or investment adviser.
      Amended: October 2013
      Amended: October 2009
      January 2007

    • ES-1.3.7

      The conditions for authorisation of approved persons are set out in Chapter AU-3.

    • ES-1.3.8 [This Paragraph deleted 07/2007.]

      Deleted: July 2007

    • ES-1.3.9

      The Module also outlines (in Chapter AU-5) the information requirements and procedures that must be followed as part of the process for:

      (a) Licensing;
      (b) Approved persons.
      Amended: July 2010
      Amended: October 2009
      Amended: January 2007

    • ES-1.3.10

      Chapter AU-6 covers the license application fees as well as the annual license fees.

      Added: July 2010