HC-10.2.2

Each approved person should understand that under the Company Law he is personally accountable to the investment firm licensee and the shareholders if he violates his legal duty of loyalty to the investment firm licensee, and that he can be personally sued by the investment firm licensee or the shareholders for such violations.

HC-10.2.3

The duty of loyalty includes a duty not to use property of the investment firm licensee for his personal needs as though it was his own property, not to disclose confidential information of the investment firm licensee or use it for his personal profit, not to take business opportunities of the investment firm licensee for himself, not to compete in business with the investment firm licensee, and to serve the investment firm licensee's interest in any transactions with the company in which he has a personal interest.

HC-10.2.4

For purposes of Paragraph HC-10.2.3, an approved person should be considered to have a "personal interest" in a transaction with the company if:

is a party to the transaction or has a material financial interest in the transaction. (Transactions and interests which are de minimis in value should not be included.)

HC-10.2.5

Each approved person should make every practicable effort to arrange his personal and business affairs to avoid a conflict of interest with the investment firm licensee.

HC-10.2.5A

Bahraini investment firm licensees should have in place a board approved policy on the employment of relatives of approved persons and a summary of such policy must be disclosed in the annual report of the Bahraini investment firm licensee.

HC-10.2.5B

Overseas investment firm licensees should have in place a policy on the employment of relatives of approved persons pertaining to their Bahrain operations.

HC-10.2.6

Each approved person should inform the entire Board of conflicts of interest as they arise and abstain from voting on the matter in accordance with the relevant provisions of the Company Law. This disclosure should include all material facts in the case of a contract or transaction involving the approved person. The approved persons should understand that any approval of a conflict transaction is effective only if all material facts are known to the authorising persons and the conflicted person did not participate in the decision.

HC-10.2.6A

The chief executive/general manager of the Bahraini investment firm licensees should disclose to the board of directors on an annual basis those individuals who are occupying controlled functions and who are relatives of any approved persons within the Bahraini investment firm licensee.

HC-10.2.6B

The chief executive/general manager of the overseas investment firm licensees should disclose to a designated officer at its head office or regional manager on an annual basis those individuals who are occupying controlled functions and who are relatives of any approved persons within the overseas investment firm licensee.

HC-10.2.7

The Board of the Bahraini investment firm licensee should establish formal procedures for:

HC-10.2.8

The investment firm licensee should disclose to its shareholders in the Annual Report any abstention from voting motivated by a conflict of interest and should disclose to its shareholders any authorisation of a conflict of interest contract or transaction in accordance with the Company Law.