Back Custom print Link Text Only Rich Text Print

  • CL-A CL-A Introduction

    • CL-A.1 CL-A.1 Purpose

      • Executive Summary

        • CL-A.1.1

          This Module presents requirements that have to be met by investment firm licensees with regards to safeguarding and administrating financial instruments or when they hold or control assets of clients for which they are responsible.

        • CL-A.1.2

          The Rules contained in this Module are aimed at ensuring proper protection of client assets to minimise the risk of client assets being used by investment firm licensees without the client's written consent (except to the extent permitted by the Rules) and to restrict the commingling of client assets with investment firm licensee assets. This Module builds upon Principle 6 — Customer Assets (see Module PB (Principles of Business)). Principle 6 requires investment firm licensees to take reasonable care to safeguard the assets of customers for which they are responsible.

          Amended: January 2007

        • CL-A.1.3

          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 2007

      • Legal Basis

        • CL-A.1.4

          This Module contains the Central Bank of Bahrain's ('CBB') Directive (as amended from time to time) on client assets, with respect to 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 Category 1 investment firms and Category 2 investment firms.

          Amended: January 2011
          April 2008
          Adopted: January 2007

        • CL-A.1.5

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

          Adopted: January 2007

    • CL-A.2 CL-A.2 Module History

      • Evolution of Module

        • CL-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. 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: January 2007

        • CL-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 2007

        • CL-A.2.3

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

          Module Ref. Change Date Description of Changes
          CL-A.1 07/2007 New Rule CL-A.1.4 introduced, categorising this Module as a Directive.
          CL-A.1.4 04/2008 Clarified that this Directive only applies to Category 1 investment firms and Category 2 investment firms.
          CL-1.1.8 04/2008 Clarified that client bank accounts may only be opened with banks licensed to do business in Bahrain.
          CL-1.4.1 and 2.6.1 04/2008 Clarified the record retention period to be in line with Article 60 of the CBB Law.
          Table of Contents and CL-1.5.3 07/2008 Added reference to agreed upon procedures included in Part B of Volume 4 (Investment Business)
          CL-1.1.1 07/2008 Corrected reference.
          CL-1.1.20 07/2008 Clarified nature of reconciliation required.
          CL-1.5.4 07/2008 Reference made to effective date when first auditor report is required.
          CL-2.3.1 07/2008 Dematerialised safe custody financial instruments now included as a defined term in the Glossary under Part B.
          CL-A.1.4 01/2011 Clarified legal basis.
          CL-1.1.4(a) 01/2012 Amended as client asset protection rules not included in Glossary.
          CL-1.1.2 04/2013 Amended introductory Paragraph of Rule.
          CL-1.1.4 and CL-1.1.5 04/2013 Rule and Guidance deleted as all assets are subject to client asset protection Rules.
          CL-1.1.10 01/2016 Clarified Rule.
          CL-1.5.1 10/2017 Amended Paragraph to clarify that licensees are to formally declare in writing that they do not possess any Client assets.
          CL-1.5.2 01/2018 Amended paragraph.

      • Superseded Requirements

        • CL-A.2.4

          This Module does not replace any regulations or circulars in force prior to April 2006.

          Amended: January 2007

        • CL-A.2.5

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

          Amended: January 2007