Back Custom print Link Text Only Rich Text Print

  • AU-1.2 AU-1.2 Approved Persons

    • General Requirement

      • AU-1.2.1

        Investment firm licensee must obtain the CBB's prior written approval for any person wishing to undertake a controlled function in an investment firm licensee. The approval from the CBB must be obtained prior to their appointment, subject to the variations contained in Paragraphs AU-1.2.3 to AU-1.2.5.

        Amended: January 2016
        Amended: July 2007

      • AU-1.2.2

        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) [Subparagraph deleted in January 2011];
        (g) [Subparagraph deleted in January 2021];
        (h) Financial Instruments Trader; and
        (i) Investment consultant or investment adviser.
        Amended: January 2021
        Amended: April 2018
        Amended: January 2016
        Amended: January 2011
        Amended: October 2009
        July 2007

      • AU-1.2.3

        In the case of Bahraini investment firm licensees, prior approval is required for all of the above controlled functions. Combination of the above controlled functions is subject to the requirements contained in Modules HC and RM.

        Amended: October 2009
        July 2007

      • AU-1.2.4

        In the case of overseas investment firm licensees, prior approval is required for controlled functions (b), defined as the 'Branch Manager' of the Bahrain branch (however titled by the licensee), (c), (d), (e), (f), (h) and (i). Combination of the above controlled functions is subject to the requirements contained in Modules HC and RM.

        Amended: October 2009
        July 2007

      • AU-1.2.5

        [This Paragraph was deleted in January 2021].

        Amended: January 2021
        Amended: October 2009

    • Basis for Approval

      • AU-1.2.6

        Approval under Paragraph AU-1.2.1 is only granted by the CBB, if it is satisfied that the person is fit and proper to hold the particular position in the licensee concerned. 'Fit and proper' is determined by the CBB on a case-by-case basis. The definition of 'fit and proper' and associated guidance is provided in Sections AU-3.1 and AU-3.2 respectively.

        Amended: July 2007

    • Definitions

      • AU-1.2.7

        Director is any person who is a member of the licensee's Board of Directors, and is individually, and collectively with other Directors responsible for directing the affairs and overseeing the activities of the licensee, as detailed in section HC-1.2.

        Amended: July 2019
        Amended: July 2007

      • AU-1.2.8

        The fact that a person may have 'Director' in their job title does not of itself make them a Director within the meaning of the definition noted in Paragraph AU-1.2.7. For example, a 'Director of Marketing', is not necessarily a member of the Board of Directors and therefore may not fall under the definition of Paragraph AU-1.2.7.

        Amended: July 2007

      • AU-1.2.9

        Investment firm licensees must appoint a person to undertake the function of Chief Executive, General Manager or Managing Director. The Chief Executive or General Manager means a person who is responsible for the conduct of the licensee (regardless of actual title). The Chief Executive or General Manager must be resident in Bahrain. This person is responsible for the conduct of the whole of the firm, or, in the case of an overseas investment firm licensee, for all of the activities of the branch (ref. HC-6.3.4).

        Amended: January 2011
        Amended: July 2010

      • AU-1.2.9A

        A licensee may appoint a Director on the Board to undertake the responsibility of the Chief Executive or General Manager, i.e a Managing Director, in which case the appointment of a Chief Executive or General Manager in addition to the Managing Director will not be permitted.

        Amended: April 2011
        Adopted: January 2011

      • AU-1.2.9B

        The Chief Executive, General Manager or Managing Director of the licensee:

        (a) Should be fully responsible for the executive management and performance of the licensee, within the framework of delegated authorities set by the Board;
        (b) Must devote full-time working hours to the licensee; and
        (c) Must not be employed at any other firm.
        Adopted: January 2011

      • AU-1.2.9C

        The Chairman of the Board may not undertake any executive role, including that of Chief Executive, General Manager or Managing Director.

        Adopted: January 2011

      • AU-1.2.9D

        The Chief Executive Officer or Managing Director are not permitted, at any time to assume Chairmanship or Deputy Chairmanship of the Board.

        Adopted: January 2011

      • AU-1.2.9E

        Residency requirements apply to Chief Executives, General Managers or Managing Directors: see Section AU-2.2.

        Adopted: January 2011

      • AU-1.2.10

        Head of function means a person who exercises major managerial responsibilities, is responsible for a significant business or operating unit, or has senior managerial responsibility for maintaining accounts or other records of the licensee.

      • AU-1.2.11

        Whether a person is a head of function will depend on the facts in each case and is not determined by the presence or absence of the word in their job title. Examples of head of function might include, depending on the scale, nature and complexity of the business, a deputy Chief Executive; heads of departments such as Risk Management, Compliance or Internal Audit; or the Chief Financial Officer.

      • AU-1.2.12

        Financial Instruments Trader means a person who is engaged in buying or selling financial instruments.

        Amended: July 2007

      • AU-1.2.13

        An investment consultant or investment adviser refers to the function of advising a client or potential client with respect to buying, selling, subscribing for or underwriting a particular financial instrument or exercising any right conferred by such a financial instrument.

        Amended: October 2012
        Amended: July 2012
        Amended: July 2007

      • AU-1.2.13A

        If a person is merely responsible for maintaining a client relationship and providing administrative support without giving advice, such person is not considered an investment consultant nor an investment adviser and need not be approved by the CBB, as such a function would not be considered a controlled function.

        Added: July 2012

      • AU-1.2.13B

        Any other staff of an investment firm licensee must not provide advice to a client or potential client, as defined in Paragraph AU-1.2.13. Other approved persons, must not provide advice to a client or potential client, as defined in Paragraph AU-1.2.13, unless such approved person has been specifically approved by the CBB as an investment consultant or investment adviser, in addition to their initial controlled function.

        Added: July 2012

      • AU-1.2.14

        Where a firm is in doubt as to whether a function should be considered a controlled function it must discuss the case with the CBB.

        Amended: July 2007

      • AU-1.2.15

        The controlled function of compliance officer is defined in accordance with the compliance function under Section HC-6.5. The controlled functions of Money Laundering Reporting Officer/Deputy Money Laundering Reporting Officer are defined under Chapter FC-3.

        Amended: January 2011
        Amended: October 2009

      • AU-1.2.16

        All investment firm licensees must designate an employee, of appropriate standing and resident in Bahrain, as compliance officer. The duties of the compliance officer include:

        (a) Having responsibility for oversight of the licensee's compliance with the requirements of the CBB; and
        (b) Reporting to the licensee's Board in respect of that responsibility.
        Amended: July 2012
        Adopted: April 2011