• Part B

     

    Table of Contents
     
    Glossary of Defined TermsGlossary of Terms Jan 2024PDF Version
    CBB Authorisation FormsForm 1Application for a LicenseJul 2018PDF Version
    Form 2Application for Authorisation of ControllerApr 20PDF Version
    Form 3Application for Approved Person statusJan 2022PDF Version
    Form 4C4 Investment Firms AuthorisationJan 2022PDF Version
    CBB Reporting FormsQPRQuarterly Prudential ReturnJan 2024MS Excel Version
    QPR InstructionsJan 2020PDF Version
    QPR GlossaryDeleted in July 2012 
    AGRAnnual Group ReturnUnder development
    STR[Deleted in July 2016]Jul 2016 
    ALFAnnual License FeeJul 2013PDF Version
    Direct Debit Authorisation FormOct 2014PDF Version
    RM-1Cyber-Security Incident ReportJan 2022PDF Version
    Supplementary InformationCACapital Adequacy
    CA-1 Bahrain Public Sector Entities, International Organisations & Multilateral Development BanksJan 2021PDF Version
    CLClient Assets
    CL-(i) Agreed Upon ProceduresJul 12PDF Version
    BRCBB Reporting
    BR-1 Appointed Experts ReportOct 11PDF Version
    BR-2 Requirements for Report on Private PlacementsJan 2020PDF Version
    FCFinancial Crime
    FC- (i) Amiri Decree Law No. 4 (2001)Apr 2007PDF Version
    FC-(i)(a) Decree Law No. 54 (2006)Jul 2007PDF Version
    FC-(i)(b) Decree Law No. 58 (2006)Jul 2007PDF Version
    FC- (ii) UN Security Council Resolution 1373 (2001)Apr 2007PDF Version
    FC- (iii) UN Security Council Resolution 1267 (1999)Apr 2007PDF Version
    FC- (iv) Examples of Suspicious TransactionsApr 2007PDF Version
    FC- (v) Guidance NotesApr 2007PDF Version
    FC- (vi) Agreed Upon ProceduresOct 2019PDF Version
    BCBusiness Conduct
    BC 1- Brokerage Fees ScaleJan 2019PDF Version
    PDPublic Disclosure
    PD-1 Instructions for Publication of Press ReleasesJan 2020PDF Version

    • Glossary of Terms

      • Glossary History

        Version DateDescription of Changes
        April 2006Initial Launch
        July 2006Page 19 ("R"): deletion of 'acting as a financial trust service provider' from the definition of 'regulated investment services'.
        July 2007
        •   Changes to definitions of: administrator(s); authorised person(s); collective investment undertaking(s); family; property.
        •   New definitions included: closed-ended fund(s); custodian(s); Investment Business Code of Practice; Islamic investment firm; overseas Category 1 investment firm.
        July 2008Added definition for accredited investor, dematerialised safe custody financial instruments and expert investor.
        October 2009
        •    Changes to definitions of: accredited investor; expert investor and subsidiary undertaking.
        •    New definitions included: investigator; qualified by exception; managing director and retail client.
        •    Deleted definitions of: appointed expert, market counterparty and professional client.
        July 2010New definitions included: appointed expert, listed company, reporting accountant and trilateral meeting.
        January 2011
        •   Amended definition of: Chief Executive Officer.
        •   New definition included: Dated subordinated debt, Executive director, Independent director, licensed exchange(s), market, minimum capital requirements, Non-executive director, original term, remuneration, senior manager/management.
        April 2011
        •   Amended definition of executive director and managing director.
        •   New definitions include: branch(es), host regulator/supervisor.
        October 2011
        •   Added definition of: Conflict of interest.
        •   Amended definition of appointed expert(s), family, qualified by exception and trilateral meeting.
        •   Clarified definition of independent director.
        January 2012
        •   Amended definition of Collective investment undertaking(s) (CIU(s)) and independent director.
        October 2012
        •   Added definition for underwrite/underwriting.
        January 2013
        •   Added definition for financial services.
        •   Amended definition for public offering.
        July 2013
        •   Added definition for Bahrain domiciled CIU.
        •   Amended the definition of subsidiary undertaking.
        October 2013Removed the term 'appointed representative(s)'
        October 2014Amended cross reference for relevant authorities.
        October 2015Added definition for ultimate parent undertaking.
        July 2016Amended definition of Politically Exposed Persons (PEPs).
        October 2017Added definition of Beneficial Owner.
        April 2019Added definition of Digital Financial Advice.
        October 2019Added definition of 'without delay'.
        July 2020Amended definition of Independent Director.
        October 2020Amended definition of Accredited Investor.
        October 2020Added point (f) in definition of Independent Director.
        July 2022Amended definition of accredited investor(s).
        October 2023Added definitions of Family, Family Clients, Family Office Licensees, Investment Management and Wealth Management Advice.
        January 2024Added definitions of Beneficiary, Beneficiary Financial Institution, Ordering Financial Institution and Originator.

      • [ A ]

        • Accredited Investor

          Accredited investors are defined as investors meeting the following criteria:

          (a) Individuals who have a minimum net worth (or joint net worth with their spouse) of USD 1,000,000, excluding that person’s principal place of residence;
          (b) Companies, partnerships, trusts or other commercial undertakings, which have financial assets available for investment of not less than USD 1,000,000; or
          (c) Governments, supranational organisations, central banks or other national monetary authorities, and state organisations whose main activity is to invest in financial instruments (such as state pension funds).

          Individuals and commercial undertakings may elect in writing to be treated as accredited investors subject to meeting at least two of the following conditions:

          (a) The investor has carried out trading/investing transactions, in significant size (i.e. value of transactions aggregating USD 200,000) over the last 12-month period;
          (b) The size of the investor's financial assets portfolio including cash deposits and financial instruments is USD 500,000 or more; and/or
          (c) The investor works or has worked in the financial sector for at least one year in a professional position, which requires knowledge of the transactions or services envisaged (i.e. the position was professional in nature and held in a field that allowed the client to acquire knowledge of transactions or services that have comparable features and a comparable level of complexity to the transactions or services envisaged).
          Amended: July 2022
          Amended: October 2020
          Amended: Oct 09
          Added: July 08

        • Administrator(s)

          Administrators are persons who undertake the administration of financial instruments and other assets, for a third party. Administration may include the following activities:

          (a) Legal and fund management accounting services;
          (b) Client enquiries;
          (c) Valuation and pricing (including tax returns);
          (d) Regulatory compliance monitoring;
          (e) Maintenance of unit-holder register;
          (f) Distribution of income;
          (g) Issuance and redemption of holdings in a CIU;
          (h) Contract settlements (including certificate dispatch); and
          (i) Record-keeping.
          Amended: July 2007

        • Ancillary services provider(s)

          A person who is licensed by the CBB in relation to the carrying on of one or more ancillary services, such as administrators, or those providing compliance services, data-processing services, or a local service or management office, with respect to other CBB licensees. Such persons are not subject to Volume 4 of the CBB Rulebook, but are separately licensed and subject to the requirements contained in the relevant CBB's 'Standard Conditions and Licensing Criteria' (cf. AU-A.1.10).

          Amended: July 2007

        • Appointed Expert(s)

          A duly qualified individual or firm appointed by the CBB to carry out inspections in accordance with Article 114 of the CBB Law or special investigations of licensees in accordance with Article 121 of the CBB Law. Appointed experts may be appointed in addition to the CBB's own officials. Examples of appointed experts include reporting accountants, lawyers, private investigators, expert witnesses and independent actuaries.

          Amended: January 2012
          Amended: October 2011
          Added: July 2010

        • Appointed Representative(s)

          [Deleted in October 2013].

          Deleted: October 2013

        • Approved Person(s)

          Approved Persons are individuals holding certain specified positions in CBB licensees; they must be approved by the CBB prior to taking on those positions and must demonstrate that they are fit and proper. The list of positions subject to the CBB's Approved Persons regime vary according to the CBB license Category, but generally cover directors and senior management, as well as certain other positions. Approved Persons requirements are specified in the relevant Rulebook Volume for the license Category in question.

          Amended: July 2007

        • Authorised person(s)

          A person authorised either as a CBB licensee or an Approved Person.

          Amended: July 2007

      • [ B ]

        • Bahrain domiciled CIU(s) (as defined under Volume 7)

          Bahrain domiciled CIUs are undertakings where:

          (a) The legal form of the CIU is established under the laws of the Kingdom of Bahrain; and
          (b) The CIU documents and contractual agreements are governed by the Laws of the Kingdom of Bahrain.
          Added: July 2013

        • Bahraini investment firm licensee

          An investment firm that is incorporated in the Kingdom of Bahrain (and is therefore not an overseas investment firm licensee). The same naming convention applies to the various sub-categories of investment firm: e.g. a Bahraini Category 1 investment firm is a Category 1 investment firm that is incorporated in the Kingdom of Bahrain. See AU-A.1.5; and overseas investment firm licensee below.

        • Beneficial Owner

          Refers to the natural person(s) who ultimately owns or controls a customer and/or the natural person on whose behalf a transaction is being conducted. It also includes those persons who exercise ultimate effective control over a legal person or arrangement. This definition should also apply to "Ultimate beneficial ownership".

          Added: October 2017

        • Beneficiary

          (As used in Module FC): refers to the natural or legal person or legal arrangement who is identified by the originator as the receiver of the requested wire/crypto-asset transfer.

        • Beneficiary Financial Institution

          Refers to the financial institution which receives the wire/crypto-asset transfer from the ordering financial institution directly or through an intermediary financial institution and makes the funds/crypto-assets available to the beneficiary.

        • Bonds

          An instrument creating or acknowledging a present or future indebtedness (i.e. debentures, debenture stock, loan stock, bonds, certificates of deposit and any other instruments creating or acknowledging a present or future indebtedness), but excluding:

          (a) An instrument creating or acknowledging indebtedness for, or for money borrowed to defray, the consideration payable under a contract for the supply of goods and services;
          (b) A cheque or other bill of exchange, a bankers draft or a letter of credit (but not a bill of exchange accepted by a banker);
          (c) A banknote, a statement showing a balance on a bank account, or a lease or other disposition of property; and
          (d) A contract of insurance.
          Amended: January 2011

        • Branch(es)

          A place of business which is a part of a firm and which has no separate legal personality.

          Added: April 2011

      • [ C ]

        • Category 1 investment firm

          An investment firm licensee as defined in AU-1.1.13.

        • Category 2 investment firm

          An investment firm licensee as defined in AU-1.1.15.

        • Category 3 investment firm

          An investment firm licensee as defined in AU-1.1.17.

        • Chief Executive, Chief Executive Officer or CEO

          Chief executive, chief executive officer or CEO. The board shall determine that person's actual title, which may be 'CEO', 'Chief Executive Officer', 'President', 'Managing Director', or another title.

          Amended: January 2011
          Amended: July 2007

        • Client

          A client is a person with or for whom an investment firm licensee conducts or intends to conduct regulated investment services.

        • Client Agreement

          Terms of business, which the client of the investment firm licensee has consented to in writing.

        • Client Asset Protection Rules

          Rules contained in Section CL-1.1.

        • Client Assets

          Money or financial instruments belonging to clients of an investment firm licensee that are held or controlled by the investment firm licensee in connection with the conduct of regulated investment services.

        • Client Bank Account

          A bank account held by an investment firm licensee, in order to hold client money: cf. CL-1.1.6.

          Amended: July 2007

        • Client Money

          Money (of any currency), which, in the course of carrying on regulated investment business, an investment firm licensee holds in respect of any investment agreement entered into, or to be entered into, with or for a client.

        • Closed-ended fund(s)

          Closed-ended funds are CIUs with a limited number of holdings. Where the fund vehicle is a company, holdings can take the form of shares. New holdings are rarely issued after the fund is launched and are not normally redeemable until the fund liquidates. Typically an investor can acquire or dispose of holdings in a closed-ended fund by buying or selling them on a secondary market, from a market intermediary or other investor, rather than by dealing with the CIU itself.

          Adopted: July 2007

        • Code

          The Investment Business Code of Practise contained in Chapter BC-2.

        • Collective investment undertaking(s) (CIU(s))

          Collective investment undertakings ('CIUs') are undertakings:

          (a) The sole object of which is the collective investment of capital raised from the public in financial instruments or other assets and which operates on the basis of risk-spreading; and
          (b) The holdings of which are re-purchased or redeemed, directly or indirectly, out of those undertakings' assets.
          Amended: January 2012
          Amended: July 2007

        • Conflict of interest

          A situation when a person or an entity has competing professional or personal obligations to other parties in a financial transaction (e.g. underwriting a securities transaction and simultaneously advising clients whether to buy the security or not) or in ongoing financial relationships (e.g. when a licensee has a director or one of its major borrowers on its board), or personal or financial interests that would make it difficult to fulfil his duties fairly.

          Added: October 2011

        • Controlled function

          A function carried on by an approved person in relation to an investment firm licensee that requires prior CBB approval: cf. AU-1.2.2.

          Amended: July 2007

        • Controller

          A controller is a natural or legal person who:

          (a) Holds 10% or more of the shares in the licensee ("L"), or is able to exercise (or control the exercise) of more than 10% of the voting power in L; or
          (b) Holds 10% or more of the shares in a parent undertaking ("P") of L, or is able to exercise (or control the exercise) of more than 10% of the voting power in P; or
          (c) Is able to exercise significant influence over the management of L or P.
          Amended: January 2011
          Amended: July 2007

        • Conventional bank licensee

          A bank licensed by CBB under Volume 1 of the CBB Rulebook, and generally operating according to conventional finance principals (as opposed to operating in accordance with Islamic finance principles).

          Amended: July 2007

        • Custodian(s)

          A custodian is a person mandated to hold and safeguard the financial instruments and other assets of a person, such as a collective investment undertaking (CIU).

          Adopted: July 2007

      • [ D ]

        • Dated subordinated debt

          A subordinated debt instrument whose maturity date is fixed at the time the instrument is issued.

          Added: January 2011

        • Dematerialised safe custody financial instruments

          Reference to dematerialised safe custody financial instruments refers to electronic holdings of securities. This is often seen in instances where "jumbo" certificates are issued, but individual tranches of the certificate are recorded only in an electronic fashion.

          Added: July 08

        • Designated Bank

          A designated bank is one to which the client of the investment firm licensee has consented in writing to hold his money. See Section CL-5.1.

        • Digital Financial Advice

          Digital Financial advice, also commonly known as robo-advice or automated advice is the advising on financial instruments as defined under AU-1.4.41 using algorithms and technology and with limited or no human financial advisor involvement.

          Added: April 2019

        • Director

          A person who acts in the capacity of director of a firm (whether appointed or not, or whether titled director or not). In the case of a sole trader, unincorporated body or partnership, a person directing its affairs, or a partner (of a partnership). Directors are a controlled function: see AU-1.2.2.

          Amended: July 2007

      • [ E ]

        • Eligible Third Party

          An eligible third party refers to:

          (a) An exchange;
          (b) A clearing house; or
          (c) An intermediate broker.
          Amended: January 2011
          Amended: July 2007

        • Executive director

          Means a director who is an officer or employee, or is otherwise involved in day-to-day management, of either:

          (a) The investment firm licensee;
          (b) Another company which is a controller of the investment firm licensee;
          (c) Another company of which the investment firm licensee is a controller; or
          (d) Another company which is controlled by a controller of the investment firm licensee.

          In this definition, the word "company" which is a controller of the investment firm excludes sovereigns such as government owned entities and government ministries.

          Amended: April 2011
          Added: January 2011

        • Expert investor

          Defined in Rule BC-2.2.9. Expert investors are:

          (a) Individuals who have a minimum net worth (or joint net worth with their spouse) of USD 100,000, excluding that person's principal place of residence;
          (b) Companies, partnerships, trusts or other commercial undertakings, which have financial assets available for investment of not less than USD 100,000; or
          (c) Governments, supranational organisations, central banks or other national monetary authorities, local authorities and state organisations.
          Amended: Oct 09
          Added: July 08

      • [ F ]

        • Family

          The term family refers to: father, mother, brother, sister, spouse, sons or daughters.

          Amended: October 2011
          Amended: July 2007

        • Family (for the purpose of Family Office Services Module)

          Family for the purposes of Family Offices Services Module means one or more individuals that are:

          (a) Lineal descendants of a common ancestor;
          (b) Spouse of the common ancestor;
          (c) Spouses of the lineal descendants of a common ancestor;
          (d) Stepchildren and adopted children of the common ancestor; and
          (e) Stepchildren and adopted children of the lineal descendants of a common ancestor.
          Added: October 2023

        • Family Office Licensees

          Family office licensees are wealth management and advisory firms that offer customised services to wealthy families.

          Added: October 2023

        • Family Clients(for the purpose of Family Office Services Module)

          Family clients include:

          (a) A family member of a single family;
          (b) Trusts for which the family members are beneficiaries;
          (c) Any company, wholly owned (directly or indirectly) by, and operated for the sole benefit of, one or more family members;

          Family members are those defined under the family definition. All family clients must also fall within the definition of accredited investors.

          Added: October 2023

        • Financial instruments

          Any of the following instruments, as further defined in Volume 4, Section AU-1.5, of the CBB Rulebook:

          (a) Transferable securities;
          (b) Islamic financial instruments;
          (c) Money market instruments;
          (d) Holdings in collective investment undertakings;
          (e) Derivative contracts other than commodity derivatives;
          (f) Derivative contracts relating to commodities settled in cash;
          (g) Derivative contracts relating to commodities;
          (h) Credit derivatives;
          (i) Financial contracts for differences;
          (j) Other derivative contracts;
          (k) Interests in real estate property;
          (l) Certificates representing certain securities; and
          (m) Rights or Interests in Financial Instruments.
          Amended: January 2011
          Amended: July 2007

        • Financial Instruments Trader

          A person who is engaged in buying or selling financial instruments. This is a controlled function (cf. AU-1.2.2).

        • Financial Services (as used in Module AU)

          For the purpose of Module AU, financial services means:

          (a) Any dealings in any instrument defined as a financial instrument in any Volume of the CBB Rulebook;
          (b) Any arrangement where money, goods or services are made available to a person in exchange for his promise to pay at a later date and that arrangement is of a type habitually provided by another person for commercial gain;
          (c) Any arrangement in which money is solicited from the public in return for a promise of financial gain on, or safekeeping of, that money; or
          (d) Any product or other financial services in the area of regulated services (regulated by the CBB) marketed in the Kingdom of Bahrain.
          Added: January 2013

        • Futures

          Rights under a contract for the sale of a commodity or property of any other description under which delivery is to be made at a future date and at a price agreed on when the contract is made.

      • [ G ]

        • General Manager

          The General Manager (of a firm whether incorporated in Bahrain or not) means a person who (regardless of actual title) is responsible, alone or jointly, for the conduct of the whole of the firm, or in the case of an overseas licensee, for all the activities of the branch. Equivalent to Chief Executive in the case of firms incorporated in Bahrain (cf. Rule AU-1.2.9).

      • [ H ]

        • Head of Function

          A person who, under the immediate authority of the chief executive or general manager, exercises one or more major managerial functions or is responsible for maintaining accounts or other records of the firm (cf. Rule AU-1.2.10).

          Amended: July 2007

        • Home Supervisor

          The competent regulatory authority of the head office of a branch.

          Amended: July 2007

        • Host Regulator / Supervisor

          The competent authority in which a branch of a foreign licensee is located or in which a subsidiary or joint venture of a foreign parent licensee is incorporated.

          Added: April 2011

      • [ I ]

        • Independent Director

          Determination by the Board. Under Module HC an 'independent director' is a director whom the board has specifically determined has no material relationship which could affect his independence of judgment, taking into account all known facts. The board should consider that, although a particular director meets the formal requirements, he may not be independent owing to specific circumstances of the person or the investment firm licensee, ownership structure of the investment firm licensee, or for any other reason. The board's determination should be a good faith finding after diligent review and full discussion.

          Formal Requirements. 'Independent director' means a director of the investment firm licensee who, or whose family shareholders either separately or together with him or each other, does not have any material pecuniary relationships or transactions with the investment firm licensee (not counting director's remuneration for this purpose) and in particular who, during the one year preceding the time in question met all the following conditions:

          (a) Was not an employee of the company;
          (b) Did not:
          (i) Make to, or receive from, the investment firm licensee payments of more than 31,000 BD or equivalent (not counting director's remuneration);
          (ii) Own more than a 10% share or other ownership interest, directly or indirectly, in an entity that made to or received from the investment firm licensee payments of more than such amount;
          (iii) Act as a general partner, manager, director or officer of a partnership or company that made to or received from the investment firm licensee payments of more than such amount;
          (iv) Have any significant contractual or business relationship with the investment firm licensee which could be seen to materially interfere with the person's capacity to act in an independent manner,
          (c) Did not own directly or indirectly (including for this purpose ownership by any family member or related person) 5% or more of the shares of any type or class of the investment firm licensee;
          (d) Was not engaged directly or indirectly as an auditor or professional advisor for the investment firm licensee,
          (e) Was not an associate of a Director or a member of senior management of the investment firm licensee, and
          (f) Was not an associate of a Director, member of senior management or board member of the investment firm licensee’s controller.

          For purposes of this definition, the 'payments' referred to in paragraph (b)(i), (b)(ii) and (b) (iii) do not include monies received from dividends and investment accounts; reference to such payments only applies to contractual payments for services rendered to the licensee by the director or company concerned, or paid (or payable) by the concerned director or company to the licensee for services provided by the licensee.

          Dividends and investment accounts are to be considered under item (b)(iv) of the definition.

          For the purpose of the definition of "independent director":

          (a) Where the term "family" or "family member or related persons" is used reference is made to: spouse, father, mother, son(s) or daughter(s); and
          (b) Where the term "associate" is used reference is made to:
          (i) Spouse, father, mother, son(s) or daughter(s); or
          (ii) A person who is an employee or partner.
          Amended: October 2020
          Amended: July 2020
          Amended: January 2012
          Amended: October 2011
          Added: January 2011

        • Initial Capital Requirement

          Initial capital requirements, as defined in Rule CA-1.2.7, are:

          (a) For Category 1 investment firms, BD 1,000,000;
          (b) For Category 2 investment firms, BD 1,000,000 if undertaking the activity of safeguarding financial instruments (i.e. custodian), BD 250,000 in all other cases; and
          (c) For Category 3 investment firms, BD 125,000.
          Amended: January 2011
          Amended: July 2007

        • Insurance licensee

          A person licensed under Volume 3 of the CBB Rulebook.

          Amended: July 2007

        • Investigator

          An Investigator is a person appointed by the CBB under the authority of Article 121 of the CBB Law to carry out an investigation of the business of a licensee or listed company.

          Added: Oct 09

        • Investment adviser

          A person who performs the function of arranging deals (on behalf of a client) in financial instruments, and/or advising a client on financial instruments (cf. Rule AU-1.2.13).

        • Investment analyst

          An employee of an investment firm licensee who prepares investment research.

        • Investment Business Code of Practice ('the Code')

          The Investment Business Code of Practice contained in Chapter BC-2.

        • Investment consultant

          See definition of investment adviser above.

        • Investment firm license

          A license issued by CBB under Volume 4 of the CBB Rulebook.

          Amended: July 2007

        • Investment firm licensee

          A person licensed under Volume 4 of the CBB Rulebook to undertake regulated investment business services.

          Amended: July 2007

        • Investment Management

          “Investment management” shall mean managing investments or assets in accordance with mandates given by the client, managing a portfolio of assets on a discretionary client-by-client basis where such investments include financial instruments, crypto-assets and other assets, and would include the activity of formation, origination and management of special purpose vehicles, trusts, investment limited partnerships, protected cell companies, collective investment undertakings and or other local or overseas domiciled legal vehicles.

          Added: October 2023

        • Investment research

          A document (other than a recommendation made to an individual client), distributed outside an investment firm licensee, which contains one or more of the following:

          (a) The results of research into an individual financial instrument;
          (b) Analysis of factors likely to influence the future performance of an individual financial instrument or its issuer; and
          (c) Advice or recommendations based on those results or that analysis.
          Amended: January 2011
          Amended: July 2007

        • Islamic bank licensee

          A person licensed under Volume 2 of the CBB Rulebook to undertake regulated Islamic banking services.

          Amended: July 2007

        • Islamic investment firm(s)

          An investment firm licensee, all of whose operations are conducted in compliance with Shar'ia principles.

          Amended: July 2007

      • [ J ]

        [This page is currently blank.]

      • [ K ]

        [This page is currently blank.]

      • [ L ]

        • Lead Supervisor

          In the context of groups containing regulated financial companies, the principal regulator supervising those financial companies on a consolidated basis.

          Adopted: July 2007

        • Licensed exchange(s)

          "Licensed exchange" means an exchange licensed in respect of the operation of its market in and from the Kingdom of Bahrain.

          Added: January 2011

        • Licensed Principal

          An investment firm licensee that appoints an appointed representative (cf. Chapter GR-8).

        • Licensees

          Any person licensed by the CBB under any of the Volumes of the CBB Rulebook.

          Amended: July 2007

        • Listed Company

          Any company whose securities are listed on the Stock Exchange according to Article 86 of Legislative Decree No. 64 of 2006 with respect to the Central Bank of Bahrain and Financial Institutions Law.

          Added: July 2010

      • [ M ]

        • Managing Director

          Defined in Rule AU-1.2.9B. A Managing Director is a Director on the Board of a licensee who:

          (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.
          Amended: April 2011
          Amended: January 2011
          Added: Oct 09

        • Market

          "Market" means a place at which, or a facility (whether electronic or otherwise) by means of which, offers or invitations to sell, purchase or exchange securities or futures contracts (including options and derivatives) regularly made on a centralised basis, being offers or invitations that are intended or may reasonably be expected to result, whether directly or indirectly, in the acceptance or making, respectively, of offers to sell, purchase or exchange securities or futures contracts (whether through that place or facility or otherwise).

          Added: January 2011

        • Market Counterparty

          (Deleted)

          Deleted: Oct 09

        • Minimum capital requirements (as defined in Paragraph CA-1.2.7)

          (a) Category 1 investment firms: BD 1,000,000;
          (b) Category 2 investment firms: BD 1,000,000 if undertaking the activity of safeguarding financial instruments (i.e. custodian), BD 250,000 in all other cases; and
          (c) Category 3 investment firms: BD 125,000.
          Added: January 2011

      • [ N ]

        [This page is currently blank.]

        • Non-executive director

          Means any director who is not an executive director

          Added: January 2011

      • [ O ]

        • Operator(s)

          In the context of a collective investment undertaking ('CIU'), operator means a person undertaking the functions of establishing, operating or winding-up a CIU.

          Adopted: July 2007

        • Options

          An option is a contract giving the buyer the right, but not the obligation, to buy or sell any of the following at a specific price on or before a certain date:

          (a) Currency of the Kingdom of Bahrain or any other country or territory;
          (b) Palladium, platinum, gold or silver; or other commodity;
          (c) Option to acquire or dispose of a financial instrument of the kind specified by this definition by virtue of the above.
          Amended: January 2011

        • Ordering Financial Institution

          Refers to the financial institution which initiates the wire/crypto-asset transfer and transfers the funds/crypto-assets upon receiving the request for a wire/crypto-asset transfer on behalf of the originator.

        • Original term

          (in respect of redeemable instruments including dated subordinated debt and redeemable preference shares) - the period of time between the date of issue and the earliest date that those instruments will mature or can be redeemed.

          Added: January 2011

        • Originator

          Refers to the account holder who allows the wire/crypto-asset transfer from that account, or where there is no account, the natural or legal person that places the order with the ordering financial institution to perform the wire/crypto-asset transfer.

        • Overseas Category 1 investment firm

          A Category 1 investment firm, which is incorporated in an overseas jurisdiction and operates in the Kingdom of Bahrain through a branch licensed by the CBB.

        • Overseas investment firm licensee

          An investment firm licensee incorporated in an overseas jurisdiction (and therefore is not a Bahraini investment firm licensee). The same naming convention applies to the various sub-categories of investment firm: e.g. a Bahraini Category 1 investment firm is a Category 1 investment firm that is incorporated in the Kingdom of Bahrain. See Paragraph AU-A.1.5; and Bahraini investment firm licensee, above.

      • [ P ]

        • Parent Undertaking

          An undertaking or individual ('P'), which has the following relationship to another undertaking ('S'):

          (i) P holds (alone or, under an agreement with other shareholders) a majority of the voting rights in S;
          (ii) P (alone or in conjunction with its other subsidiary undertakings), has the right to appoint or remove a majority of its board of directors;
          (iii) P has the right to exercise a dominant influence over S, either through provisions contained in S's memorandum or articles, or a control contract; or
          (iv) P is a parent undertaking of a parent undertaking of S.
          Amended: July 2007

        • Personal account transaction

          A transaction undertaken by an employee of an investment firm licensee in a financial instrument, for his own account.

        • Politically Exposed Person ('PEP')

          'Politically Exposed Persons' or 'PEPs' means individuals who are, or have been entrusted with prominent public functions in Bahrain or a foreign country, for example Heads of State or government, senior politicians, senior government, judicial or military officials, senior executives of state owned corporations or important political party officials or persons who are or have been entrusted with a prominent function by an international organisation. Business relationships with family members or close associates of PEPs involve reputational risks similar to PEPs themselves. The definition is not intended to cover middle-ranking or more junior officials in the foregoing categories. Bahraini PEPs would include all Ministers, all MPs, and all Ministry officials with the rank of Undersecretary or above.

          Amended: July 2016

        • Professional client

          (Deleted)

          Deleted: Oct 09

        • Property

          Property of any description (including assets, rights, interests, and/or money).

          Amended: July 2007

        • Public Offering

          An offer of securities to the general public. See Rule BC-2.3.7.

          Amended: January 2013
          Amended: July 2007

      • [ Q ]

        • Qualified by Exception

          A report issued by an appointed expert that is qualified and indicates that certain areas or issues remain unresolved or are unverifiable due to certain limitations imposed on the appointed experts' work. The report will clearly indicate the type and reason for exception and the action taken by the appointed experts had the mentioned limitation not been placed on their work.

          Amended: October 2011
          Added: October 2009

        • Qualifying Custodian

          Defined in Rule AU-1.4.35.

      • [ R ]

        • Real Time Promotion

          Defined in Paragraph BC-2.3.13.

        • Registered administrator

          Persons registered by BMA, and thus allowed to carry on the business of an administrator. See Section AU-1.3.

        • Registered persons

          Refer to registered administrators.

        • Regulated banking services

          Any of the regulated activities permitted to be undertaken by a conventional bank licensee.

        • Regulated investment services

          Any of the following, as further defined in Section AU-1.4:

          (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. custodian);
          (f) Advising on financial instruments; and
          (g) Operating a collective investment undertaking (i.e. an operator).
          Amended: January 2011
          Amended: July 2007

        • Regulated Islamic banking services

          Any of the regulated activities permitted to be undertaken by an Islamic bank licensee.

        • Regulatory Capital

          Capital elements that satisfy the regulatory criteria for admissibility, in the context of calculating compliance with Regulatory Capital Requirements. Defined in Chapter CA-2.

        • Regulatory Capital Requirement

          Defined in Rule CA-1.2.2 for Category 1 and Category 2 investment firms, and in Rule CA-1.2.3 for Category 3 investment firms.

        • Relevant Authorities

          For the purposes of Module FC, relevant authority refers to the authorities listed in Rule FC-4.3.2.

          Amended: October 2014

        • Relevant Operating Expenses

          For the purposes of calculating a licensee's annual CBB license fee, relevant operating expenses are defined as the total operating expenses of the licensee concerned, as recorded in the most recent audited financial statements available, excluding the following items:

          (a) Training costs;
          (b) Charitable donations;
          (c) CBB fees paid; and
          (d) Non-executive Directors' remuneration.
          Adopted: July 2007

        • Remuneration

          Means all types of compensation including but not limited to salary, fee and non-cash benefits such as grants of stock, stock options or pension benefits.

          Added: January 2011

        • Reporting Accountant

          A Reporting Accountant is a person appointed by the CBB under the authority of Article 114 of the CBB Law, as an Inspector of the business of a licensee or listed company.

          Added: July 2010

        • Representative office

          A person who is licensed by the CBB to undertake only representative office functions:

          (i) Gather financial, economic and commercial information;
          (ii) Carry out general promotional activities; and/or
          (iii) Provide general assistance of a non specific nature to resident and non resident clients of the overseas entity/group the office is representing.

          Such persons are not subject to Volume 4 of the CBB Rulebook, but are separately licensed and subject to the requirements contained in the relevant CBB's 'Standard Conditions and Licensing Criteria' (cf. AU-A.1.12).

          Amended: July 2007

        • Retail Client

          Defined in Rule BC-2.2.8. A retail client means a client who is not classified as an expert investor or an accredited investor under Rules BC-2.2.9 and BC-2.2.1

          Amended: Oct 09

        • Risk-based Capital Requirement(s)

          Defined in Rule CA-1.2.8. The Risk-based Capital Requirement is the sum of a firm's Expenditure Requirement, Position Risk Requirement (PRR), Counterparty Risk Requirement (CRR), and Foreign Exchange Risk Requirement (FER).

          Amended: July 2007

      • [ S ]

        • Senior Manager/Management

          Refers to individuals occupying the position of CEO or head of function.

          Added: January 2011

        • Shareholders

          (a) In relation to a share which is represented by a bearer certificate, the person who holds the certificate; or
          (b) In relation to a share that is not represented by a bearer certificate, the person whose name is entered on the register in relation to the share.
          Amended: January 2011
          Amended: July 2007

        • Shares

          A share or stock in the share capital of an enterprise, whether incorporated or unincorporated, but excluding units in collective investment undertakings.

        • Soft dollar agreement

          An agreement in any form under which an investment firm licensee receives goods or services in return for regulated investment services put through or in the way of another person.

        • Specialised Licensee

          A person licensed under Volume 5 of the CBB Rulebook (when issued). Until such time, a CBB licensee not licensed under any of Volume 1, 2, 3, 4 or 6 of the CBB Rulebook.

          Amended: July 2007

        • Subsidiary or Subsidiary undertaking

          A company or other enterprise controlled by another company or enterprise (the parent or the holding company), including any other legal entity or other forms such as contractual or management agreements, where the licensee exercises a majority shareholding or has majority voting control by virtue of direct ownership or by proxy/nominee arrangements or such other control mechanism as determined by the CBB.

          Amended: July 2013
          Amended: Oct 09

        • Swaps

          A financial contractual agreement between two parties to exchange (swap) a set of payments that one party owns for a set of payments owned by the other party.

      • [ T ]

        • Terms of business

          A statement in a durable medium of terms and conditions on which a firm will conduct regulated investment services with or for a client.

        • Third Party Related Distribution Rules

          Rules specified in Chapter CL-5.

        • Trilateral Meeting

          A meeting between a licensee, an appointed expert and the CBB.

          Amended: October 2011
          Added: July 2010

      • [ U ]

        • Ultimate Parent Undertaking

          The highest parent investment firm undertaking of the investment firm licensee or the holding company whose predominant investment are shares of the investment firm(s) (wherever established) that is not itself the subsidiary of another undertaking.

          Added: October 2015

        • Underwrite/Underwriting

          Is when a licensee(s) bears the risk of commitment to market or place all or part of the issue of a financial instrument issued by an unconnected party (the issuer), to investors, in return for a fee and within a pre-agreed upon timeframe. Underwriting includes a binding commitment by the licensee(s) to purchase the portion of the issue which remains unsubscribed for.

          Added: October 2012

        • Unsolicited Real Time Promotion

          A real time promotion in breach of Rule BC-2.3.12.

      • [ V ]

        [This page is currently blank.]

      • [ W ]

        • Warrant

          Warrants are instruments that confer an entitlement to subscribe for shares, debenture and government and public securities. The rights conferred must be rights to 'subscribe' for the relevant investments. This means that they are rights to acquire the investments directly from the issuer of the investments and by way of the issue of new investments.

        • Wealth Management Advice

          “Wealth management advice” shall mean advice in wealth management organisation, wealth management planning, administrative or financial wealth management, or coordination of the service providers in wealth management, monitoring or assessment of performances.

          Added: October 2023

        • Without delay

          The phrase without delay means, ideally, within a matter of hours of a designation by the United Nations Security Council or its relevant Sanctions Committee (e.g. the 1267 Committee, the 1988 Committee, the 1718 Sanctions Committee or the 1737 Sanctions Committee). For the purposes of S/RES/1373(2001), the phrase without delay means upon having reasonable grounds, or a reasonable basis, to suspect or believe that a person or entity is a terrorist, one who finances terrorism or a terrorist organisation. In both cases, the phrase without delay should be interpreted in the context of the need to prevent the flight or dissipation of funds or other assets which are linked to terrorists, terrorist organisations, those who finance terrorism, and to the financing of proliferation of weapons of mass destruction, and the need for global, concerted action to interdict and disrupt their flow swiftly.

          Added: October 2019

      • [ X ]

        [This page is currently blank.]

      • [ Y ]

        [This page is currently blank.]

      • [ Z ]

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    • CBB Authorisation Forms

      • Form 1 Form 1 Application for a License

        Please download the Form in PDF format.

        • [Deleted]

          Deleted: July 2007

        • [Deleted]

          Deleted: July 2007

      • Form 2 Application for Authorisation of Controller

        Please download the Form in PDF format.

      • Form 3 Application for Approved Person status

        Please download the Form in PDF format.

      • Form 4 Application for Registration

        Please download the Form in PDF format.

      • Form 4 C4 Investment Firms Authorisation

        Please download the Form in PDF format.

    • CBB Reporting Forms

      • QPR: Quarterly Prudential Return

        Please download the Form in MS Excel format.

      • AGR: Annual Group Return

        This form is currently under development.

      • STR: Suspicious Transaction Report

        Please download the Form in PDF format.

      • ALF: Annual License Fee

        Please download the Form in PDF format.

      • Direct Debit Authorisation Form

        Please download the Form in PDF format.

      • RM-1 Cyber-Security Incident Report

        Please download the Form in PDF format.

    • Supplementary Information

      • CA CA: Capital Adequacy

        • CA-1: Bahrain Public Sector Entities, International Organisations & Multilateral Development Banks

          Click here to download the Appendix in PDF format.

      • CL: CL: Client Assets

        • CL-(i): Agreed Upon Procedures

          Click here to download the Appendix in PDF format.

      • BR: BR: CBB Reporting

        • BR-1: Appointed Experts Report

          Click here to download in PDF format.

        • BR-2 Requirements for Report on Private Placements

          Click here to download in PDF format.

      • FC: Financial Crime

        • FC-(i): Amiri Decree Law No. 4 (2001)

          Click here to download the Law in PDF format.

        • FC-(i)(a) Decree Law No. 54 (2006)

          Click here to download the Law in PDF format.

        • FC-(i)(b): Decree Law No. 58 (2006)

          Click here to download the Law in PDF format.

        • FC-(ii): UN Security Council Resolution 1373 (2001)

          Click here to download the Law in PDF format.

        • FC-(iii): UN Security Council Resolution 1267 (1999)

          Click here to download the Law in PDF format.

        • FC-(iv): Example of Suspicious Transaction

          Click here to download the Examples in PDF format.

        • FC-(v): Guidance Notes

          Click here to download the Guidance Notes in PDF format.

        • FC- (vi) Agreed Upon Procedures

          Click here to download the Procedures in PDF format.

      • BC: BC: Business Conduct

        • BC-1 Brokerage Fees Scale

          Click here to download in PDF format.

      • PD: Public Disclosure

        • Appendix PD-1 Instructions for Publication of Press Releases

          Please download the Appendix in PDF format.