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  • Chapter RM-B Chapter RM-B Scope of Application

    • RM-B.1 RM-B.1 License Categories

      • RM-B.1.1

        The contents of this Module — unless otherwise stated — apply to Category 1 and Category 2 investment firms only.

        Adopted: July 2007

      • RM-B.1.2

        Category 3 investment firms — unless otherwise stated — are exempted from the requirements of this Module with the exeption of Chapters RM-7 and RM-8.

        Amended: October 2009
        Adopted: July 2007

      • RM-B.1.3

        In respect of Category 3 investment firms, however, the specific requirements contained in Module RM should be considered as good practice, which it may be appropriate to apply. Notwithstanding the exemption from the specific requirements of Module RM, specified in Rule RM-B.1.2, Category 3 investment firms are nonetheless required to maintain adequate systems and controls (see Sections AU-2.6 and PB-1.10).

        Adopted: July 2007

    • RM-B.2 RM-B.2 Branches and Subsidiaries

      • Bahraini Investment Firm Licensees

        • RM-B.2.1

          Bahraini investment firm licensees must ensure that, as a minimum, the same or equivalent provisions of this Module apply to their branches, whether located inside or outside the Kingdom of Bahrain, such that these are also subject to an effective risk management framework. In instances where local jurisdictional requirements are more stringent than those applicable in this Module, the local requirements are to be applied.

          Adopted: July 2007

        • RM-B.2.2

          Bahraini investment firm licensees must satisfy the CBB that their subsidiaries and other group members (where relevant) are subject to appropriate arrangements such that they too effectively manage their risks.

          Adopted: July 2007

        • RM-B.2.3

          Where an investment firm licensee is unable to satisfy the CBB that its subsidiaries and other group members are subject to appropriate risk management arrangements, the CBB will assess the potential impact of risks — both financial and reputational — that this poses to the investment firm licensee. The CBB recognises that different types of activity require different approaches to risk management, and it does not necessarily expect arrangements to be in place elsewhere in a group equivalent to those contained in this Module. However, where the CBB assesses that risk management weaknesses in subsidiaries and other group members pose material risks to the investment firm licensee, the CBB may impose restrictions on dealings between the licensee and other group members. Where such weaknesses are assessed by the CBB to pose a major threat to the stability of the investment firm licensee, then its authorisation may be called into question.

          Adopted: July 2007

      • Overseas Investment Firm Licensees

        • RM-B.2.4

          Overseas investment firm licensees must satisfy the CBB that the same or equivalent arrangements to those contained in this Module are in place at the head office level, as well as ensuring that there is effective risk management of activities conducted under the Bahrain license.

          Adopted: July 2007

        • RM-B.2.5

          In assessing compliance with Paragraph RM-B.2.4, the CBB will take into account regulatory requirements applicable to the head office, i.e. the company of which the Bahrain branch is part, as well as the risk management framework applied to the Bahrain operation. With the exception of specific requirements that explicitly apply to overseas investment firm licensees, overseas investment firm licensees should consider the contents of this Chapter as guidance, in judging whether risk management controls applied to the branch satisfy RM-B.2.4.

          Adopted: July 2007