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  • AU-1 AU-1 Authorisation Requirements

    • AU-1.1 AU-1.1 Licensing

      • AU-1.1.1

        No person may:

        (a) Undertake (or hold themselves out to undertake) regulated money changer services, by way of business, within or from the Kingdom of Bahrain unless duly licensed by the CBB;
        (b) Hold themselves out to be licensed by the CBB unless they have as a matter of fact been so licensed; or
        (c) Market any financial services in the Kingdom of Bahrain unless:
        (i) Allowed to do by the terms of a license issued by the CBB;
        (ii) The activities come within the terms of an exemption granted by the CBB by way of a Directive; or
        (iii) Has obtained the express written permission of the CBB to offer financial services.
        Amended: January 2013
        October 2010

      • AU-1.1.2

        For the purposes of Rule AU-1.1.1, please refer to Rule AU-1.1.8 for the definition of 'regulated money changer services' and Rule AU-1.1.9 for 'by way of business'. Such activities will be deemed to be undertaken within or from the Kingdom of Bahrain if, for example, the person concerned:

        (a) Is incorporated in the Kingdom of Bahrain; or
        (b) Uses an address situated in the Kingdom of Bahrain for its correspondence.
        October 2010

      • AU-1.1.2A

        In accordance with Resolution No.(16) for the year 2012 and for the purpose of Subparagraph AU-1.1.1(c), the word 'market' refers to any promotion, offering, announcement, advertising, broadcast or any other means of communication made for the purpose of inducing recipients to purchase or otherwise acquire financial services in return for monetary payment or some other form of valuable consideration.

        Added: January 2013

      • AU-1.1.2B

        Persons in breach of Subparagraph AU-1.1.1(c) are considered in breach of Resolution No.(16) for the year 2012 and are subject to penalties under Articles 129 and 161 of the CBB Law (see also Section EN-9.3).

        Added: January 2013

      • AU-1.1.3

        Persons wishing to be licensed to undertake regulated money changer services within or from the Kingdom of Bahrain must apply in writing to the CBB.

        October 2010

      • AU-1.1.4

        An application for a license must be in the form prescribed by the CBB and must contain, inter alia:

        (a) A business plan specifying the type of business to be conducted;
        (b) Application forms for all controllers; and
        (c) Application forms for all controlled functions.
        October 2010

      • AU-1.1.5

        The CBB will review the application and duly advise the applicant in writing when it has:

        (a) Granted the application without conditions;
        (b) Granted the application subject to conditions specified by the CBB; or
        (c) Refused the application, stating the grounds on which the application has been refused and the process for appealing against that decision.
        October 2010

      • AU-1.1.6

        Detailed rules and guidance regarding information requirements and processes for licenses can be found in Section AU-4.1. As specified in Paragraph AU-4.1.12, the CBB will provide a formal decision on a license application within 60 calendar days of all required documentation having been submitted in a form acceptable to the CBB.

        October 2010

      • AU-1.1.7

        All applicants seeking a Money Changers license must satisfy the CBB that they meet, by the date of authorisation, the minimum criteria for licensing, as contained in Chapter AU-2. Once licensed, licensees must maintain these criteria on an on-going basis.

        October 2010

      • Money Changer License Permitted Activities

        • AU-1.1.8

          For the purposes of Volume 5 (Specialised Licensees), regulated money changer services mean all transactions including:

          (a) The sale, purchase and exchange of foreign currencies;
          (b) Currency transfer to/from Bahrain;
          (c) Purchase and sale of travellers' cheques;
          (d) The dealing in precious metals within the allowed limits; or
          (e) Any other financial business related to Money Changers activities and approved by the CBB.
          Amended: April 2011
          October 2010

        • AU-1.1.8A

          For purposes of Subparagraph AU-1.1.8(a), the sale, purchase and exchange of foreign currencies may include the wholesale export and import of various currency bank notes in physical form, for the purpose of distribution/collection to/from the local market or for transmission to a foreign jurisdiction. Only licensees whose license specifically allows for such activity to be undertaken are permitted to engage in this activity.

          Added: October 2012

        • AU-1.1.8B

          In assessing a request from a licensee to add the activity of export/import of bank notes to its permitted activities, the CBB will consider among other factors, the following:

          (a) A satisfactory track record of not less than 5 years operating as a licensed regulated entity in the financial sector;
          (b) The licensee's financial soundness, an acceptable level of capitalisation and financial resources and its ability to meet its obligations in a timely and satisfactory manner;
          (c) The legal status and regulatory track record of the licensee including previous disciplinary measures taken against the licensee by the CBB or any other jurisdiction in which its group operates;
          (d) The maintenance of an adequate insurance coverage to cater for any risk that may arise while importing/exporting the consignment;
          (e) The application of prudent security measures when transporting the banknotes within the Kingdom of Bahrain, as required by Paragraphs GR-7.1.1 and GR-9.1.5A;
          (f) The existence of prudent documented and approved internal procedures and controls within the licensee to govern the entire import/export activity starting from the origination of the consignment to its final destination. Such procedures must observe the requirements of any other Law or relevant competent authority in this regard, whether in the Kingdom of Bahrain or the jurisdiction to/from which the banknotes are being exported/imported;
          (g) The existence of the necessary AML/CFT systems and controls in place as required by Module FC;
          (h) The quality of management and corporate governance framework and oversight over the activities of the licensee; and
          (i) The maintenance of proper books and records as required by Chapter GR-1.
          Added: October 2012

        • AU-1.1.9

          For the purposes of Volume 5 (Specialised Licensees), carrying on a regulated money changer services by way of business means:

          (a) Undertaking one or more of the activities specified in Paragraph AU-1.1.8 for commercial gain;
          (b) Holding oneself out as willing and able to engage in that activity; or
          (c) Regularly soliciting other persons to engage in transactions constituting that activity.
          October 2010

        • AU-1.1.10

          Licensees are prohibited from conducting any other financial business other than that set out in Rule AU-1.1.8 above, and permitted by the license issued to them by the CBB.

          October 2010

        • AU-1.1.11

          A person does not carry on an activity constituting regulated money changer services if it is an organisation, commercial company or travel and tourism agency accepting foreign currencies and travellers' cheques in consideration for their sales. In addition, hotels do not undertake regulated money changer services when accepting foreign currencies and travellers' cheques in consideration for their services and/or as a service to their guests.

          October 2010

      • Suitability

        • AU-1.1.12

          Those seeking authorisation must satisfy the CBB as to their suitability to carry out the regulated money changer services for which they are seeking authorisation.

          October 2010

        • AU-1.1.13

          In assessing applications for a license, the CBB will assess whether an applicant satisfies the licensing conditions (as specified in Chapter AU-2) with respect to all the regulated services that the applicant proposes to undertake.

          October 2010

    • AU-1.2 AU-1.2 Approved Persons

      • General Requirements

        • AU-1.2.1

          Licensees must obtain the CBB's prior written approval for any person wishing to undertake a controlled function at a licensee. The approval from the CBB must be obtained prior to their appointment, subject to the variations contained in Paragraph AU-1.2.3.

          Amended: January 2016
          October 2010

        • AU-1.2.2

          Controlled functions are those functions occupied by board members and persons in executive positions and include:

          (a) Director;
          (b) Chief Executive or General Manager;
          (c) Head of function;
          (d) Compliance Officer; and
          (e) Money Laundering Reporting Officer (MLRO).
          Amended: January 2016
          October 2010

        • AU-1.2.3

          Prior approval is required for all of the above controlled functions. Combination of the above controlled functions is subject to the requirements contained in Modules HC and RM. Controlled functions (b) to (e) are in relation to Bahrain operations.

          Amended: January 2013
          October 2010

      • Basis for Approval

        • AU-1.2.4

          Approval under Paragraph AU-1.2.1 is only granted by the CBB, if it is satisfied that the person is 'fit and proper' to hold the particular position at the licensee concerned. 'Fit and proper' is determined by the CBB on a case-by-case basis. The definition of 'fit and proper' and associated guidance is provided in Sections AU-3.1 and AU-3.2 respectively.

          October 2010

      • Definitions

        • AU-1.2.5

          Director is any person who occupies the position of a Director, as defined in Article 173 of the Commercial Companies Law (Legislative Decree No. 21 of 2001).

          October 2010

        • AU-1.2.6

          The fact that a person may have 'Director' in their job title does not of itself make them a Director within the meaning of the definition noted in Paragraph AU-1.2.5. For example, a 'Director of IT', is not necessarily a member of the Board of Directors and therefore may not fall under the definition of Paragraph AU-1.2.5.

          October 2010

        • AU-1.2.7

          The Chief Executive or General Manager means a person who is responsible for the conduct of the licensee (regardless of actual title). The Chief Executive or General Manager must be resident in Bahrain. This person is responsible, for the conduct of the whole of the firm.

          October 2010

        • AU-1.2.8

          Head of function means a person who exercises major managerial responsibilities, is responsible for a significant business or operating unit, or has senior managerial responsibility for maintaining accounts or other records of the licensee.

          October 2010

        • AU-1.2.9

          Whether a person is a head of function will depend on the facts in each case and is not determined by the presence or absence of the word in their job title. Examples of head of function might include, depending on the scale, nature and complexity of the business, a deputy Chief Executive, heads of departments such as Risk Management, Compliance or Internal Audit, or the Chief Financial Officer.

          October 2010

        • AU-1.2.10

          Where a licensee is in doubt as to whether a function should be considered a controlled function it must discuss the case with the CBB.

          October 2010