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  • BR-2.3 BR-2.3 Approval Requirements

    • Change in Name

      • BR-2.3.1

        In accordance with Paragraph GR-2.1.1, an investment firm licensee must seek prior written approval from the CBB and give reasonable advance notice of a change in:

        (a) The investment firm licensee's name (which is the registered name if the investment firm licensee is a body corporate); or
        (b) The investment firm licensee's trade name, and that of its subsidiaries located in Bahrain (ref. GR-2.1.1).
        Amended: October 2009
        Adopted: July 2007

      • BR-2.3.2

        The request under Paragraph BR-2.3.1 must include the details of the proposed new name and the date on which the investment firm licensee intends to implement the change of name.

        Adopted: July 2007

    • Change of Address

      • BR-2.3.3

        As specified in Article 51 of the CBB Law, an investment firm licensee must seek approval from the CBB and give reasonable advance notice of a change in the address of the investment firm licensee's principal place of business in Bahrain.

        Amended: October 2009
        Adopted: July 2007

      • BR-2.3.4

        The request under Paragraph BR-2.3.3 must include the details of the proposed new address and the date on which the investment firm licensee intends to implement the change of address.

        Adopted: July 2007

      • BR-2.3.5

        As specified in Article 51 of the CBB Law, an investment firm licensee must seek approval from the CBB for its intention to carry on its business from new premises in Bahrain. This requirement applies whether or not the premises are to be used for the purposes of transacting business with customers, administration of the business or as the head office in Bahrain of the investment firm licensee.

        Amended: January 2011
        Adopted: October 2009

      • BR-2.3.6

        [This Paragraph was deleted in October 2013]

        Deleted: October 2013

    • Change in Legal Status

      • BR-2.3.7

        An investment firm licensee must seek CBB approval and give reasonable advance notice of a change in its legal status that may, in any way, affect its relationship with or limit its liability to its customers.

        Amended: October 2009
        Adopted: July 2007

    • Change in Authorised or Issued Capital

      • BR-2.3.8

        As specified in Article 57(3) of the CBB Law, an investment firm licensee must seek CBB approval before making any modification to its authorised or issued capital. In the case that an investment firm licensee has been granted approval to increase its paid-up capital, confirmation from the external auditor stating that the amount has been deposited in the licensee's bank account or otherwise reflected in the licensee's accounts will subsequently be required.

        Amended: January 2011
        Adopted: October 2009

    • Client Asset Transfers

      • BR-2.3.9

        In accordance with Chapter GR-4, investment firm licensees must seek prior written approval from the CBB before transferring client assets to a third party, in circumstances other than when acting on instruction from the client concerned. This requirement is applicable to Category 1 investment firm and Category 2 investment firm licensees only.

        Amended: July 2012
        Amended: October 2009
        Adopted: July 2007

    • Controllers and Close Links

      • BR-2.3.10

        In accordance with Chapter GR-5, Bahraini investment firm licensees must seek CBB approval and give reasonable advance notice of any of the following events concerning the investment firm licensee:

        (a) A person acquiring control or ceasing to have control;
        (b) An existing controller acquiring an additional type of control (such as ownership or significant influence) or ceasing to have a type of control;
        (c) An existing controller increasing his or her percentage in the issued and paid up capital or voting power beyond 10%, 20%, 30% or 40%; and
        (d) An existing controller becoming or ceasing to be a parent undertaking.
        Amended: October 2015
        Amended: October 2009
        Adopted: July 2007

      • BR-2.3.11

        Every investment firm licensee authorised in Bahrain is required to submit an annual report on its controllers, as per Paragraphs GR-5.1.8 and GR-5.5.3, and close links as set out in Paragraph GR-6.1.3.

        Amended: October 2015
        Amended: October 2009
        Adopted: July 2007

    • Carrying out Business in Another Jurisdiction

      • BR-2.3.12

        An investment firm licensee must seek CBB approval and give three months' notice of its intention to undertake investment business activities in a jurisdiction other than Bahrain prior to commencing that business and where the effect of commencing that business may have a significant impact on:

        (a) The investment firm licensee's business in Bahrain; or
        (b) The capital resources of the investment firm licensee.
        Amended: January 2020
        Amended: January 2011
        Amended: October 2009
        Adopted: July 2007

      • BR-2.3.13

        Rule BR-2.3.12 applies whether or not the investment firm licensee is required to be regulated locally in the jurisdiction where it proposes to undertake the investment business.

        Amended: July 2010
        Amended: October 2009
        Adopted: July 2007

      • BR-2.3.14

        The CBB will use this information to consider whether or not it should refuse its approval or impose additional requirements on the licensee.

        Amended: October 2009
        Adopted: July 2007

    • Mergers, Acquisitions, Disposals and Establishment of New Subsidiaries

      • BR-2.3.15

        A Bahraini investment firm licensee incorporated in Bahrain must seek CBB approval and give reasonable advance notice of its intention to:

        (a) Enter into a merger with another undertaking;
        (b) Enter into a proposed acquisition, disposal or establishment of a new subsidiary undertaking; or
        (c) Open a new place of business as a subsidiary undertaking, a branch or a representative office within the Kingdom of Bahrain or other jurisdiction.
        Amended: January 2020
        Amended: April 2011
        Amended: October 2009
        Adopted: July 2007

      • BR-2.3.16

        In order to comply with requirements of Paragraph BR-2.3.15, investment firm licensees should refer to the requirements of Chapter GR-10.

        Amended: April 2011
        Amended: October 2009
        Adopted: July 2007

      • BR-2.3.17

        [This Paragraph was moved to GR-10.1.5].

        Amended: April 2011
        Amended: October 2009
        Adopted: July 2007

    • Share Option Schemes

      • BR-2.3.18

        An investment firm licensee must seek prior approval from the CBB for any share option schemes it proposes to offer to its employees.

        Amended: January 2011
        Amended: October 2009
        Adopted: July 2007

    • BR-2.3.16 [Deleted]

      Deleted: October 2009

    • Outsourcing Arrangements

      • BR-2.3.19

        [This Paragraph was deleted in January 2023].

        Deleted: January 2023
        Amended: April 2013
        Adopted: October 2009

    • Matters Having a Serious Supervisory Impact

      • BR-2.3.20

        An investment firm licensee must seek prior approval from the CBB for any material changes or proposed changes to the information provided to the CBB in support of an authorisation application that occurs after authorisation has been granted.

        Adopted: October 2009

      • BR-2.3.21

        Any licensee that wishes, intends or has been requested to do anything that might contravene, in its reasonable opinion, the provisions of UNSCR 1373 (and in particular Article 1, Paragraphs c) and d) of UNSCR 1373) must seek, in writing, the prior written opinion of the CBB on the matter (ref. FC-7.2.2).

        Adopted: October 2009

      • BR-2.3.22

        As specified in Article 57 of the CBB Law, an investment firm licensee wishing to modify its Memorandum or Articles of Association, must obtain prior written approval from the CBB.

        Adopted: October 2009

      • BR-2.3.23

        As specified in Article 57 of the CBB Law, an investment firm licensee wishing to transfer all or a major part of its assets or liabilities inside or outside the Kingdom, must obtain prior written approval from the CBB.

        Adopted: October 2009

    • Capital Adequacy

      • BR-2.3.24

        Bahraini investment firm licensees, must obtain a letter of no-objection from the CBB to any dividend proposed, before submitting a proposal for a distribution of profits to a shareholder vote (ref. GR-3.1.1). This requirement is applicable to Category 1 investment firm and Category 2 investment firm licensees only.

        Amended: July 2012
        Adopted: October 2009

      • BR-2.3.25

        An investment firm licensee must not redeem any Tier 1 instrument that it has included in its Regulatory Capital for the purpose of satisfying its Regulatory Capital Requirement without the prior written approval of the CBB (ref. CA-2.1.7).

        Adopted: October 2009

      • BR-2.3.26

        No value, for Regulatory Capital purposes, may be attributed to any other instrument or resource, without the CBB's written consent (ref. CA-2.1.12).

        Adopted: October 2009

      • BR-2.3.27

        Exceptional items of expenditure may also be excluded from relevant annual expenditure, as defined in Rule CA-3.1.2, subject to prior CBB written approval (ref. CA-3.1.2). This requirement is applicable to Category 1 investment firm and Category 2 investment firm licensees only.

        Amended: July 2012
        Adopted: October 2009

      • BR-2.3.27A

        Should an investment firm licensee need to inject additional working capital and does so by way of a subordinated loan from its shareholders, it must receive CBB's prior approval to do so (ref. CA-1.1.5A).

        Adopted: July 2012

      • BR-2.3.27B

        Investment firm licensees must seek the CBB's prior written approval before settling a subordinated loan made by its shareholders, either fully or partially, prior to the end of its term (see Paragraph CA-1.1.5A).

        Added: January 2013

    • Licensed Regulated Services

      • BR-2.3.28

        Investment firm licensees must seek prior CBB approval before undertaking new activities (ref. Article 48 of the CBB Law and AU-5.4.1).

        Adopted: October 2009

      • BR-2.3.29

        As specified in Article 50 of the CBB Law, an investment firm licensee wishing to cease to provide all or any of its licensed regulated services, completely or at any of its branches, must obtain prior written approval from the CBB (ref. AU-5.5.1 and Section GR-7.1).

        Amended: July 2010
        Adopted: October 2009

      • BR-2.3.30

        Investment firm licensees must seek prior CBB approval before starting to undertake derivative transactions (ref. RM-6.1.1). This requirement is applicable to Category 1 investment firm and Category 2 investment firm licensees only.

        Amended: July 2012
        Adopted: October 2009

      • BR-2.3.31

        An investment firm licensee must not undertake or otherwise engage in stock lending activity with or for a client unless the investment firm licensee has obtained the consent of the CBB and the client (ref. CL-1.2.1). This requirement is applicable to Category 1 investment firm and Category 2 investment firm licensees only.

        Amended: July 2012
        Adopted: October 2009

    • Private Placement of Securities

      • BR-2.3.32

        All Private Placement Memorandums (PPMs) relating to the issue of financial instruments by investment firm licensees, with the exception of those made under Collective Investment Undertakings arrangements (which are covered under Volume 7 (CIU) of the CBB Rulebook), must obtain the CBB's prior approval before distributing the offering document. This requirement is applicable to Category 1 investment firm and Category 2 investment firm licensees only.

        Amended: October 2012
        Amended: July 2012
        Adopted: October 2009

      • BR-2.3.33

        Investment firm licensees are required to obtain the approval required under Rule BR-2.3.32 above from the Capital Markets Supervision Directorate at the CBB and simultaneously notify the Financial Institutions Supervision Directorate of the same. The request must be supported by a draft proposal for private placements and addressed to the Director of Capital Markets Supervision Directorate and must be in line with the requirements of Module OFS (Offering of Securities) under Volume 6 of the CBB Rulebook.

        Amended: October 2014
        Amended: January 2012
        Adopted: October 2009

    • External Auditor

      • BR-2.3.34

        An investment firm licensee must seek prior approval from the CBB for the appointment or re-appointment of its external auditor (ref. AU-2.7.1 and AA-1.1.1).

        Adopted: October 2009

    • Approved Persons

      • BR-2.3.35

        An investment firm licensee must seek prior approval from the CBB for the appointment of persons undertaking a controlled function in an investment firm licensee (ref. Article 65 of the CBB Law, AU-1.2 and AU-5.2.1).

        Adopted: October 2009

      • BR-2.3.36

        Investment firm licensees must seek prior CBB approval before an approved person may move from one controlled function to another within the same licensee (ref. AU-5.4.5).

        Adopted: October 2009

      • BR-2.3.37

        If a controlled function falls vacant, an investment firm licensee making immediate interim arrangements for the controlled function affected, must obtain approval from the CBB for such arrangement (ref. AU-5.5.5).

        Adopted: October 2009