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  • AU-A AU-A Introduction

    • AU-A.1 AU-A.1 Purpose

      • Executive Summary

        • AU-A.1.1

          The Authorisation Module sets out the Central Bank of Bahrain's (CBB) approach to licensing providers of regulated investment services in the Kingdom of Bahrain. It also sets out CBB requirements for approving persons in those providers.

          Amended: January 2011
          Amended: July 2007

        • AU-A.1.2

          Persons who provide any of the following regulated investment services within or from the Kingdom of Bahrain, and are not otherwise licensed by CBB as a bank, are required to be licensed by CBB as an investment firm licensee:

          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: July 2007

        • AU-A.1.3

          Four categories of investment firm license are provided for under the CBB Rulebook, depending on the type of regulated investment services undertaken. The requirements in Volume 4 (Investment Business) are tailored in certain respects, according to the license category concerned, in order to address the specific features and risks associated with each type of regulated investment service.

          Amended: January 2022
          Amended: July 2007

        • AU-A.1.4

          Collectively, licensed providers of regulated investment services are called investment firm licensees. Bahrain-incorporated investment firm licensees are called Bahraini investment firm licensees. Investment firm licensees that are incorporated in an overseas jurisdiction and operate via a branch presence in the Kingdom of Bahrain are called overseas investment firm licensees. The same naming convention applies to the various sub-categories of investment firms (e.g. Bahraini Category 1 investment firm, overseas Category 1 investment firm etc).

          Amended: July 2007

        • AU-A.1.5

          Regulated investment services are defined in Section AU-1.4. Their definition excludes operating a recognised exchange (such as the Bahrain Bourse) and related infrastructure (such as central clearing and depository systems). These activities are separately addressed, in the form of individual regulations issued by the CBB's Capital Markets Supervision Directorate, and the Bahrain Bourse.

          Amended: January 2022
          Amended: July 2007

        • AU-A.1.6

          Persons undertaking certain functions in relation to investment firm licensees require prior CBB approval. These functions (called 'controlled functions') include Directors and members of senior management. The controlled functions regime supplements the licensing regime by ensuring that key persons involved in the running of investment firm licensees are fit and proper. Those authorised by the CBB to undertake controlled functions are called approved persons.

          Amended: July 2007

      • Retaining Authorised Status

        • AU-A.1.7

          The requirements set out in Chapters AU-2 and AU-3 represent the minimum conditions that have to be met in each case, both at the point of authorisation and on an on-going basis thereafter, in order for authorised status to be retained.

          Amended: July 2007

      • Representative Offices and Ancillary Services Providers

        • AU-A.1.8

          Neither representative offices of foreign investment firms, nor ancillary services providers, are covered in Volume 4 (Investment Business). Requirements covering these types of activities will instead be included in Volume 5.

          Amended: July 2007

        • AU-A.1.9

          Volume 5 (Specialised Activities) of the CBB Rulebook issued in December 2010 deals with representative offices of foreign investment firms.

          Amended: October 2011
          Amended: July 2007

        • AU-A.1.10

          [This Paragraph has been deleted in January 2022].

          Deleted: January 2022
          Amended: July 2007

      • Legal Basis

        • AU-A.1.11

          This Module contains the CBB's Directive, Regulation and Resolutions (as amended from time to time) regarding authorisation under Volume 4 of the CBB Rulebook. It is applicable to all investment firm licensees (as well as to approved persons), and is issued under the powers available to the CBB under Articles 37 to 42, 44 to 48 and 180 of the Central Bank of Bahrain and Financial Institutions Law 2006 ('CBB Law'). It includes the requirements contained in Resolution No (1) of 2007 with respect to determining fees categories due for licensees and services provided by the CBB. The Module also contains requirements under Regulation No (1) of 2007 pertaining to the CBB's regulated services issued under Article 39 of the CBB Law and contains requirements governing the conditions of granting a license for the provision of regulated services as prescribed under Resolution No. (43) of 2011 and issued under the powers available to the CBB under Article 44(c). The Module contains requirements under Resolution No.(16) for the year 2012 including the prohibition of marketing financial services pursuant to Article 42 of the CBB Law. This Module contains the prior approval requirements for approved persons under Resolution No (23) of 2015.

          Amended: July 2015
          Amended: January 2013
          Amended: October 2011
          Amended: January 2011
          Adopted: July 2007

        • AU-A.1.12

          For an explanation of the CBB's rule-making powers and different regulatory instruments, see Section UG-1.1.

          Adopted: July 2007

      • AU-A.1.2

        The Module builds on the legal requirements contained in Legislative Decree No. 23 of 1973, with respect to financial and investment organisations ("the BMA Law 1973"). The Module is issued under legal powers granted to the BMA by the BMA Law 1973, contained in articles 14(d), 14(g) and 41.

      • Licensing

      • Approved Persons

      • Registered Administrators

      • AU-A.1.8

        Persons carrying on the business of an administrator require prior registration by the BMA. Administrators are persons who administer financial instruments and related services such as cash/collateral management. They must satisfy certain basic conditions in order to be registered, following which they are subject to only a few on-going requirements. Unlike licensees, registered administrators are not subject to detailed on-going supervision or extensive regulation. Those authorised by the BMA to carry on administration services are called registered administrators.

    • AU-A.2 AU-A.2 Module History

      • Evolution of Module

        • AU-A.2.1

          This Module was first issued in April 2006, as part of the first phase of Volume 4 (Investment Business) to be released. It is dated April 2006. Any material changes that have subsequently been made to this Module are annotated with the calendar quarter date in which the change was made: Chapter UG-3 provides further details on Rulebook maintenance and version control.

          Amended: July 2007

        • AU-A.2.2

          When the CBB replaced the BMA in September 2006, the provisions of this Module remained in force. Volume 4 was updated in July 2007 to reflect the switch to the CBB, as well as other policy changes. However, new calendar quarter dates were only issued where these involved changes in the substance of Rules.

          Adopted: July 2007

        • AU-A.2.3

          A list of recent changes made to this Module is provided below:

          Module Ref.Change DateDescription of Changes
          AU-A.1.307/2006Deletion of reference to 'acting as a trust service provider'.
          AU-1.1.1307/2006Deletion of reference to 'acting as a trust service provider'.
          AU-1.1.1407/2006Clarification of scope of exemption.
          AU-1.4.5007/2006Deletion of paragraph relating to 'acting as a trust service provider'.
          AU-1.4.5107/2006Deletion of paragraph relating to 'acting as a trust service provider'.
          AU-A.107/2007Changes to reflect new CBB Law and reclassification of administrators as ancillary services providers (i.e. licensees, to be subject to Volume 5 of the CBB Rulebook).
          AU-1.307/2007Deletion of this Section to reflect reclassification of administrators as ancillary services providers (i.e. licensees, to be subject to Volume 5 of the CBB Rulebook).
          AU-1.407/2007Clarification of exemption in Rule AU-1.4.8; and minor change to definition of collective investment undertaking (to align with new Module CIU, Volume 6).
          AU-407/2007Chapter deleted to reflect reclassification of administrators as ancillary services providers (i.e. licensees, to be subject to Volume 5 of the CBB Rulebook).
          AU-5.107/2007Section amended to reflect new procedures reflecting CBB Law.
          AU-5.307/2007Deleted following reclassification of administrators as ancillary services providers (i.e. licensees, to be subject to Volume 5 of the CBB Rulebook).
          AU-5.407/2007Amended to reflect new CBB Law procedures.
          AU-5.507/2007Amended to reflect new CBB Law procedures.
          AU-607/2007New Chapter AU-6 on application and license fees (old material on fees, previously contained in Module GR, deleted).
          AU-5.1.5 and 5.1.5A01/2008Clarified CBB's requirements for letters of comfort and/or letters of guarantee.
          AU-5.1.1301/2008Clarified CBB's requirements for items that must be in place within 6 months of a new license being issued.
          AU-1.1.1804/2008Clarified that Category 3 investment firms must be independent.
          AU-5.2.204/2008Clarified to whom Form 3 should be sent to if dealing with a request for an appointment of MLRO from an existing investment firm licensee.
          AU-5.5.504/2008Outlined CBB's requirements in instances where a controlled function becomes vacant.
          AU-5.2.507/2008Clarified that the refusal decision by the CBB to grant a person 'approved person' status is issued to the investment firm licensee
          AU-5.2.607/2008Added cross reference.
          AU-1.1.1810/2009Clarified that Category 3 investment firms must refrain from receiving fees or commissions from parties other than clients.
          AU-1.1.2410/2009Paragraph changed from Guidance to Rule.
          AU-1.210/2009Amended to reflect requirements of Modules HC and RM.
          AU-1.2.210/2009Controlled function of Deputy MLRO added.
          AU-1.2.1510/2009New Rule added to clarify definition of Compliance Officer and MLRO/Deputy MLRO.
          AU-1.4.1110/2009Clarified that dealing in financial instruments as principal includes underwriting and private placement.
          AU-1.4.1910/2009Clarified that dealing in financial instruments as agent does not include execution of deals.
          AU-2.310/2009Updated to include CBB's requirements for controllers.
          AU-5.1.510/2009Clarified that copy of commercial registration certificate is required for existing Bahraini companies only.
          AU-5.210/2009Updated to include CBB's information requirements for the appointment of approved persons.
          AU-B.1.3, AU-2.5.2 and AU-2.7.207/2010Paragraphs deleted.
          AU-B.2 and AU-5.5.507/2010Amended heading.
          AU-1.2.9 and AU-5.5.107/2010Added cross reference.
          AU-1.4.33 and AU-1.4.3707/2010Paragraphs changed from Guidance to Rules and amended to clarify definition of safeguarding financial instruments.
          AU-1.4.42 and AU-1.4.4307/2010New rules added to clarify definition of advising on financial instruments.
          AU-1.4.49, AU-1.4.50, AU-1.4.51 and AU-5.5.507/2010Amended cross reference.
          AU-1.2.9, AU-1.4.49, AU-1.4.50, AU-1.4.51, AU-2.3.5, AU-5.1.6, AU-5.1.12A, AU-5.1.12B, AU-5.1.12D and AU-6.1.107/2010Paragraphs amended.
          AU-5.1.5A07/2010Paragraphs amended and changed to Rule.
          AU-5.1.12K07/2010Paragraph added to require confirmation that capital has been paid in before the final approval for a license.
          AU-5.1.1307/2010Updated to include new requirement to be submitted within six months of the license being issued.
          AU-6.207/2010Updated to include CBB's annual license fee requirements.
          AU-A.1.1101/2011Clarified legal basis.
          AU-1.1.201/2011Clarified guidance.
          AU-1.1.21, AU-1.1.22 and AU-1.2.1(f)01/2011Paragraphs deleted for consistency in CBB Rulebook.
          AU-1.201/2011Amended as requirements moved from Module HC to Module AU.
          AU-1.4.2501/2011Amended guidance to reflect new definitions related to licensed exchange(s).
          AU-5.1.13(j)01/2011Added language requirements for commercial registration certificate.
          AU-5.1.5A01/2011Amended CBB's requirements concerning letters of guarantee to be submitted with licensing application.
          AU-5.1.1301/2011Added requirement to submit copy of licensee's business card and any written communication including a statement that the investment firm is licensed by the CBB.
          AU-5.5.301/2011Clarified guidance.
          AU-1.2.1604/2011Added a definition Paragraph for the compliance officer.
          AU-5.1.5(m)04/2011Corrected typo and added clarification to requirements dealing with private placements.
          AU-6.2.9A04/2011Added the requirement for annual fees for SPV's to be in line with the requirements of Resolution No (1) of 2007.
          AU-A.1.910/2011Guidance Paragraph amended as Volume 5_Representative Offices was issued in December 2010.
          AU-A.1.1110/2011Legal basis updated to reflect all Articles of the CBB Law covered by this Module as well as applicable Resolutions.
          AU-5.510/2011Clarified language on cancellation of a license to be in line with other Volumes of the CBB Rulebook.
          AU-1.1.14, AU-1.4.11A and AU-1.4.11B01/2012Guidance in AU-1.1.14 amended and changed to Rule and moved to AU-1.4.11A and additional guidance added as AU-1.4.11B.
          AU-1.4.19 and AU-1.4.19A01/2012Clarified Rule AU-1.4.19 and added guidance for Category 3 investment firms.
          AU-1.4.3301/2012Added reference to Volume 5 (Administrators) and amended Rule.
          AU-2.2.2 and AU-2.2.301/2012Restructured and amended guidance into two Paragraphs, including one guidance and one Rule.
          AU-2.3.201/2012Clarified application of Rule for Category 1 and 2 investment firm licensees.
          AU-5.5.501/2012Clarified Rule.
          AU-6.2.9B01/2012Guidance added to clarify the non application of fees for SPVs established for the purpose of setting up a locally domiciled CIU.
          AU-1.2.13, AU-1.2.13A and AU-1.2.13B07/2012Clarified Rule and added Paragraphs on investment consultant and investment adviser.
          AU-1.4.2 and AU-5.5.4A10/2012Corrected cross reference.
          AU-1.1.25, AU-1.2.13, AU-1.4.11, AU-1.4.11A, AU-1.4.15, AU-1.4.17., AU-1.4.18, AU-1.4.28, AU-1.4.29, AU-1.4.41 and AU-1.4.4510/2012The term 'underwrite/underwriting' has now been defined and included in the Glossary under Part B of Volume 4.
          AU-1.4.1510/2012Clarified Rule dealing with providing credit.
          AU-1.4.5210/2012Reference updated to reflect the issuance of Volume 7 (CIU).
          AU-A.1.1101/2013Updated legal basis.
          AU-B.1.101/2013Updated prohibition as per issuance of Resolution No.(16) for the year 2012.
          AU-1.101/2013References added to requirements under Resolution No.(16) for the year 2012.
          AU-1.1.2404/2013Added cross reference.
          AU-6.207/2013Amended due date and collection process for annual license fees.
          AU-1.1.24, AU-1.1.24A and AU-1.1.24B10/2014Amended requirements to have a Shari'a Supervisory Board based on the category of investment firm licensee.
          AU-1.4.11 and AU-1.4.11B10/2014Clarified the meaning of dealing in financial instruments as a principal and added cross reference to approval from CBB's Capital market Supervision Directorate as well as requirements under Module OFS of Volume 6 of the CBB Rulebook.
          AU-5.1.7A10/2014Clarified that any PPM issued to raise capital must comply with module OFS and is subject to the CBB's Capital Market Supervision Directorate's prior approval.
          AU-A.1.1107/2015Legal basis updated to reflect Resolution No (23) of 2015.
          AU-3.2.107/2015Added cross reference to Module TC.
          AU-5.207/2015Amended to be in line with Resolution No (23) of 2015 on Prior Approval Requirements for Approved Persons.
          AU-5.5.507/2015Clarified interim arrangements for replacement of approved person.
          AU-1.201/2016Clarified general requirements for approved persons.
          AU-301/2016Amended to be in line with Resolution No (23) of 2015 on Prior Approval Requirements for Approved Persons.
          AU-5.1.401/2016Paragraph deleted as no longer applicable.
          AU-5.201/2016Minor amendments to be aligned with other Volumes of the CBB Rulebook.
          AU-1.1.1810/2016Added subparagraph (d)
          AU-1.1.18A10/2016Changed 'not limited' to 'in relation'
          AU-1.1.18B10/2016Deleted subparagraph (f)
          AU-5.2.310/2016Added to Rule new subparagraph (e)
          AU-5.607/2017Added new Section on Publication of the Decision to Grant, Cancel or Amend a License
          AU-1.2.204/2018Amended Paragraph
          AU-5.1.104/2018Amended Paragraph
          AU-5.1.12E04/2018Amended Paragraph
          AU-5.2.204/2018Amended Paragraph
          AU-1.4.41A04/2019Added a new Paragraph on digital investment advice.
          AU-1.2.707/2019Amended definition of a Director.
          AU-1.4.3307/2019Amended Paragraph.
          AU-5.1.107/2019Amended Paragraph to remove references to hardcopy Form 1 submission to online submission.
          AU-5.1.12H10/2019Changed from Rule to Guideline.
          AU-5.1.12I10/2019Changed from Rule to Guideline.
          AU-5.1.12J10/2019Changed from Rule to Guideline.
          AU-5.6.110/2019Changed from Rule to Guideline.
          AU-1.1.1307/2020Added new sub-paragraph (ff).
          AU-1.1.1707/2020Added new sub-paragraph (c).
          AU-1.1.22A, AU-1.1.22B, AU-1.1.22C07/2020Added new Paragraphs on Arranging Credit and Advising on Credit suitability.
          AU-1.4.4307/2020Deleted Paragraph.
          AU-1.4.47A, AU-1.4.47B, AU-1.4.47C, AU-1.4.47D, AU-1.4.47E, AU-1.4.47F, AU-1.4.47G07/2020Added new Paragraphs on Arranging Credit and Advising on Credit definitions.
          AU-1.1.13A10/2020Added a new Paragraph on compliance with AAOIFI Shari’a Standards.
          AU-1.2.201/2021Deleted Sub-paragraph (g).
          AU-1.2.501/2021Deleted Paragraph.
          AU-2.2.301/2021Amended Paragraph on approved persons occupying controlled functions.
          AU-A.1.301/2022Amended Paragraph.
          AU-A.1.501/2022Amended Paragraph.
          AU-A.1.1001/2022Deleted Paragraph.
          AU-B.1.201/2022Amended Paragraph.
          AU-1.1.601/2022Amended Paragraph.
          AU-1.1.801/2022Amended Paragraph.
          AU-1.1.13A01/2022Paragraph moved to AU-1.1.24.
          AU-1.1.18C01/2022Added a new Paragraph on Category 4 Investment Firms.
          AU-1.1.18D01/2022Added a new Paragraph on Category 4 Investment Firms.
          AU-1.1.18E01/2022Added a new Paragraph on Category 4 Investment Firms.
          AU-1.1.18F01/2022Added a new Paragraph on Category 4 Investment Firms.
          AU-1.1.2401/2022Amended Paragraph.
          AU-1.1.24B01/2022Amended Paragraph.
          AU-1.4.4801/2022Amended Paragraph.
          AU-5.4.101/2022Amended Paragraph.
          AU-1.1.22D – AU-1.1.22J01/2024Added new Paragraphs on regulated investment services involving crypto-assets requirements.
          Appendix AU-101/2024Added a new appendix on the Requirements for Regulated Investment Services Involving Crypto Assets.

      • Superseded Requirements

        • AU-A.2.4

          This Module supersedes the following provisions contained in circulars or other regulatory instruments:

          Circular/other reference Provision Subject
          Standard Conditions and Licensing Criteria: investment advisers/brokers. All articles Scope of license and licensing conditions.
          Standard Conditions and Licensing Criteria: broking company All articles Scope of license and licensing conditions.
          Standard Conditions and Licensing Criteria: stockbrokerage All articles Scope of license and licensing conditions.
          Circular BC/11/98, dated 27/7/98 All articles Appointment and suitability of Directors and senior managers ('fit and proper').
          Amended: July 2007

        • AU-A.2.5

          Further guidance on the implementation and transition to Volume 4 (Investment business) is given in Module ES (Executive Summary).

          Amended: July 2007