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  • HC-B HC-B Scope of Application

    • HC-B.1 HC-B.1 License Categories

      • HC-B.1.1

        The contents of this Module — unless otherwise stated — apply to Category 1 and Category 2 investment firm licensees, incorporated under the Bahrain Commercial Companies Law ('the Company Law').

        January 2011

      • HC-B.1.2

        For Category 3 investment firms, the applicable Guidance Paragraphs are included in Chapter HC-10. The Comply or Explain Principle (see Paragraph HC-A.1.8) applies to the content of Chapter HC-10.

        January 2011

      • HC-B.1.3

        Overseas investment firm licensees must satisfy the CBB that equivalent arrangements are in place at the parent entity level, and that these arrangements provide for effective high-level controls over activities conducted under the Bahrain license.

        January 2011

      • HC-B.1.4

        In assessing compliance with Paragraph HC-B.1.3, the CBB will take into account regulatory requirements applicable to the parent entity, as well as the governance and systems and controls arrangements actually implemented by the parent entity and applied to the Bahrain operation. With the exception of specific requirements that explicitly apply to overseas investment firm licensees (i.e. Paragraphs HC-B.1.3), overseas investment firm licensees should consider the remaining contents of this Chapter as guidance, in judging whether high-level controls applied to the branch satisfy HC-B.1.3.

        January 2011

    • HC-B.2 HC-B.2 Branches, Subsidiaries and Affiliates

      • HC-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 effective high-level controls. In instances where local jurisdictional requirements are more stringent than those applicable in this Module, the local requirements are to be applied.

        January 2011

      • HC-B.2.2

        Bahraini investment firm licensees must satisfy the CBB that regulated investment services conducted in subsidiaries and other group members are subject to the same or equivalent arrangements for ensuring effective corporate governance over their activities.

        Amended: January 2012
        January 2011

      • HC-B.2.3

        Where an investment firm licensee is unable to satisfy the CBB that its subsidiaries and other group members are subject to the same or equivalent arrangements, the CBB will assess the potential impact of risks — both financial and reputational — to the licensee arising from inadequate high-level controls in the rest of the group of which it is a member. In such instances, the CBB may impose restrictions on dealings between the licensee and other group members. Where weaknesses in controls are assessed by the CBB to pose a major threat to the stability of the licensee, then its authorisation may be called into question.

        January 2011