BC-A BC-A Introduction
BC-A.1 BC-A.1 Purpose
Executive Summary
BC-A.1.1
This Module contains requirements that have to be met by
investment firm licensees with regards to their dealings withclients .BC-A.1.2
The Rules contained in this Module aim to ensure that
investment firm licensees deal with theirclients in a fair and open manner, and address theirclients' information needs.Amended: January 2007BC-A.1.3
The Rules build upon several of the Principles of Business (see Module PB (Principles of Business)). Principle 1 (Integrity) requires
investment firm licensees to observe high standards of integrity and fair dealing, and to be honest and straightforward in their dealings withclients . Principle 3 (Due skill, care and diligence) requiresinvestment firm licensees to act with due skill, care and diligence when acting on behalf of theirclients . Principle 7 (Client Interests) requiresinvestment firm licensees to pay due regard to the legitimate interests and information needs of theirclients , and to communicate with them in a fair and transparent manner.Amended: January 2007BC-A.1.4
The Rules contained in this Module are largely principles-based and focus on desired outputs rather than on prescribing detailed processes. This gives
investment firm licensees flexibility in how to implement the basic standards prescribed in this Module.Amended: January 2007Legal Basis
BC-A.1.5
This Module contains the Central Bank of Bahrain's ('CBB') Directive (as amended from time to time) on business conduct by
investment firm licensees , and is issued under the powers available to the CBB under Article 38 of the Central Bank of Bahrain and Financial Institutions Law 2006 (CBB Law). The directive in this Module is applicable to allinvestment firm licensees .Amended: January 2011
Adopted: January 2007BC-A.1.6
For an explanation of the CBB's rule-making powers and different regulatory instruments, see Section UG-1.1.
Adopted: January 2007BC-A.2 BC-A.2 Module History
Evolution of the Module
BC-A.2.1
This Module was first issued in April 2006 by the BMA, as part of the first phase of Volume 4 (Investment Business) to be released. 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: January 2007BC-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; however, new calendar quarter dates were only issued where the update necessitated changes to actual requirements.
Adopted: January 2007BC-A.2.3
A list of recent changes made to this Module is provided below:
Module Ref. Change Date Description of Changes BC-A.1 07/2007 New Rule BC-A.1.5 introduced, categorising this Module as a Directive. BC-2.8.14 and 2.12.2(k) 04/2008 Clarified the record retention period to be in line with Article 60 of the CBB Law. BC-A.1.3 07/2008 Corrected reference to read investment firm licensee. BC-2.2 07/2008 Added reference and definition of accredited investor and expert investor to client classification. BC-2.2 10/2009 Updated client classification and definitions. BC-2.7 10/2009 Corrected to read accredited investors. BC-2.8.6 07/2010 Paragraph amended. BC-2.9.1 and BC-2.9.2 07/2010 Updated to include requirements regarding complaints. BC-2.11.1 07/2010 Updated to be in line with Article 117 of the CBB Law. BC-A.1.6 01/2011 Clarified legal basis. BC-2.3.15 01/2001 Cross reference added to Section GR-2.2 BC-B.1.3 10/2011 Updated scope of application to reflect new Chapter BC-3. BC-2.9 and BC-3 10/2011 Updated consumer complaints Section in line with results of consultation. BC-3.2 and BC-3.3 01/2012 Minor corrections to correct typos and clarify language. BC-3.3.9 01/2012 Deleted Paragraph as it repeats what is in Paragraph BC-3.3.7. BC-3.1.3A 07/2012 Added guidance on the appointment of the customer complaints officer. BC-2.7.14 and BC-2.7.16 07/2013 Clarified Rules on allocations. BC-3.7 07/2013 Additional details provided on reporting of complaints. BC-1.1.4 10/2013 Clarified language. BC-2.3.15 and BC-2.3.17 10/2013 Clarified the application of these two Paragraphs to the employees of the investment firm licensee. BC-2.10.2, BC-2.10.9 and BC-2.10.10 07/2015 Removed reference to corporate finance to be in line with Paragraph AU-1.4.43. BC-2.4.11 10/2017 Additional requirement on signed client agreement. BC-2.13 01/2019 Added a new Section on Brokerage Fees. BC-3.3.15 04/2020 Amended Paragraph adding reference to CBB consumer protection. BC-3.5.6 04/2020 Amended Paragraph adding reference to CBB consumer protection. BC-3.7.1 - BC-3.7.3 04/2020 Amended Paragraph adding reference to CBB consumer protection. BC-C 10/2020 Added a new Chapter on Provision of Financial Services on a Non-discriminatory Basis. Superseded Requirements
BC-A.2.4
This Module supersedes the following provisions contained in circulars or other regulatory requirements:
Document Ref. Date of Issue Module Ref. Document Subject OG/274/95 28 Aug 1995 Provision of investment and other financial services BC/15/98 6 Sept 1998 Code of Conduct for Investment advisory companies BC/83/96 19 May 1996 Minimum requirements for Terms and Conditions standard form BC/73/96 1 May 1996 Promotional Schemes BC-A.2.5
Further guidance on the implementation and transition to Volume 4 (Investment Business) is given in Module ES (Executive Summary).