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  • Risk Management Function

    • RM-1.1.10

      A Bahraini investment firm licensee must have a risk management function commensurate with the nature, scale and complexity of its business.

      Amended: October 2013
      Amended: July 2010
      Amended: April 2008
      Adopted: July 2007

    • RM-1.1.11

      Where a licensee maintains a risk management function, this function must be independent of risk-taking units. The duties of the risk management function include but are not limited to:

      (a) Identifying, measuring, monitoring, and controlling the major sources of risks associated with the operations of the Bahraini investment firm licensee including any entity it may own, control or manage on an ongoing basis;
      (b) Reporting to the Board and senior management on all material risks to the licensee; and
      (c) Documenting the processes and systems by which it identifies and monitors material risks, and how it reports to the Board and senior management these risks.
      Amended: October 2013
      Adopted: July 2010

    • RM-1.1.12

      The CBB will only consider a licensee not having a risk management function, where its investment activities are limited in scale and complexity, and appropriate mitigating controls are in place.

      Amended: October 2013
      Adopted: April 2008

    • RM-1.1.13

      Unless otherwise agreed in writing with the CBB, the risk management function of a Bahraini investment firm licensee, may not be outsourced to a third party.

      Amended: October 2013
      Adopted: July 2010

    • RM-1.1.14

      An overseas investment firm licensee may establish a risk management function commensurate with the nature, scale and complexity of its business. The risk management function may be combined with another function. The CBB will consider an overseas investment firm licensee not having a local risk management function, provided that it seeks CBB's approval to outsource this function to its Head Office, in accordance with Section RM-7.3 (Intra-group Outsourcing). In such case, the CBB must be satisfied that equivalent arrangements to those contained in this Module are in place at the Head Office level, and that such arrangements would entail effective risk management of activities conducted by the overseas investment firm licensee.

      Added: October 2013