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  • HC-A.1 HC-A.1 Purpose

    • Executive Summary

      • HC-A.1.1

        This Module presents requirements that have to be met by investment firm licensees with respect to:

        (a) Corporate governance principles issued by the Ministry of Industry and Commerce as The Corporate Governance Code; and
        (b) Related high-level controls and policies.
        January 2011

      • HC-A.1.2

        The Principles referred to in this Module are in line with the Principles relating to the Corporate Governance Code issued by the Ministry of Industry and Commerce.

        January 2011

      • HC-A.1.3

        The purpose of the Module is to establish best practice corporate principles in Bahrain, and to provide protection for investors and other company stakeholders through compliance with those principles.

        January 2011

      • HC-A.1.4

        Whilst the Module follows best practice, it is nevertheless considered as the minimum standard to be applied. This Module also includes additional rules and guidance issued by the Central Bank of Bahrain ('the CBB') prior to the publication of the Code and previously contained in Module HC.

        January 2011

    • Structure of this Module

      • HC-A.1.5

        This Module follows the structure of the Corporate Governance Code and each Chapter deals with one the nine fundamental Principles of corporate governance. The numbered directives included in the Code are Rules for purposes of this Module. Recommendations under the Code have been included as guidance. However, where the previous version of Module HC had a similar recommendation as a Rule, the Module retains this Paragraph as a Rule.

        January 2011

      • HC-A.1.6

        The Module also incorporates other high-level controls and policies that apply in particular to investment firm licensees.

        January 2011

      • HC-A.1.7

        All references in this Module to 'he' or 'his' shall, unless the context otherwise requires, be construed as also being references to 'she' and 'her'.

        January 2011

      • HC-A.1.8

        This Module contains a mixture of Rules and Guidance (See Module UG-1.2 for a detailed explanation of Rules and Guidance). All Rules in Module HC must be complied with by all investment firm licensees.

        Amended: July 2015
        January 2011

    • The Comply or Explain Principle for Guidance Paragraphs

      • HC-A.1.8A

        In addition, all investment firm licensees must comply with the Guidance in Module HC or explain their noncompliance by way of an annual report to their shareholders and to the CBB (see Chapter HC-8).

        Added: July 2015

    • Monitoring and Enforcement of Module HC

      • HC-A.1.9

        Disclosure and transparency are underlying principles of Module HC. Disclosure is crucial to allow outside monitoring to function effectively. This Module looks to a combined monitoring system relying on the Board, the investment firm licensee's shareholders and the CBB.

        January 2011

      • HC-A.1.10

        It is the Board's responsibility to see to the accuracy and completeness of the investment firm licensee's corporate governance guidelines and compliance with Module HC. Failure to comply with this Module is subject to enforcement measures as outlined in Module EN (Enforcement).

        January 2011

    • Legal Basis

      • HC-A.1.11

        This Module contains the CBB's Directive (as amended from time to time) relating to high-level controls 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 investment firm licensees (including their approved persons).

        Amended: July 2015
        January 2011

      • HC-A.1.12

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

        January 2011

    • Effective Date

      • HC-A.1.13

        This updated Module is effective on 1st January 2011. All investment firm licensees to which Module HC applies should be in full compliance by the financial year end 2011. At every investment firm licensee's annual shareholder meeting held after 1st January 2011, corporate governance should be an item on the agenda for information and any questions from shareholders regarding the investment firm licensee's governance. Where possible, the investment firm licensee should also have corporate governance guidelines in place at that time and should have a "comply or explain" report as described in Paragraph HC-A.1.8.

        January 2011