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  • 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.