AU-2 AU-2 Licensing Conditions
AU-2.1 AU-2.1 Condition 1: Legal Status
AU-2.1.1
The legal status of a
licensee must be:(i) A Bahraini joint stock company (B.S.C.); or(ii) A Bahraini company with limited liability (W.L.L.) and licensed to conduct money changer business prior to 1st October 2012.Amended: October 2012
October 2010AU-2.1.2
For those
licensees that do not meet the requirements of Rule AU-2.1.1, they should discuss their legal status with the CBB.October 2010AU-2.2 AU-2.2 Condition 2: Mind and Management
AU-2.2.1
Licensees with their Registered Office in the Kingdom of Bahrain must maintain their Head Office in the Kingdom and must conduct their business from their Head Office and approved branches only.October 2010AU-2.2.2
In assessing the location of a
licensee's Head Office, the CBB will take into account the residency of its Directors and senior management. The CBB requires the majority of key decision makers in executive management — including theChief Executive - to be resident in Bahrain.October 2010AU-2.3 AU-2.3 Condition 3: Controllers
AU-2.3.1
Licensees must satisfy the CBB that theircontrollers are suitable and pose no undue risks to thelicensee .October 2010AU-2.4 AU-2.4 Condition 4: Board and Employees
AU-2.4.1
As per Article 65(a) of the CBB law, those nominated to carry out
controlled functions must satisfy CBB'sapproved person's requirements.October 2010AU-2.4.2
The definition of
controlled functions is contained in Paragraph AU-1.2, whilst Chapter AU-3 sets out CBB'sapproved persons requirements. Applications forapproved person status must be submitted using the prescribedapproved persons form.October 2010AU-2.4.3
The
licensee's staff, taken together, must collectively provide a sufficient range of skills and experience to manage the affairs of thelicensee in a sound and prudent manner.Licensees must ensure their employees meet any training and competency requirements specified by the CBB.October 2010AU-2.4.4
The CBB's training and competency requirements are contained in Module TC (Training and Competency).
October 2010AU-2.5 AU-2.5 Condition 5: Financial Resources
AU-2.5.1
Licensees must maintain a level of financial resources, as agreed with the CBB, adequate for the level of business proposed. The level of financial resources held must exceed at all times the minimum requirements contained in Module CA (Capital Adequacy), as specified for the license held.October 2010AU-2.6 AU-2.6 Condition 6: Systems and Controls
AU-2.6.1
Licensees must maintain systems and controls that are, in the opinion of the CBB, adequate for the scale and complexity of their activities. These systems and controls must meet the minimum requirements contained in Modules HC (High-level Controls) and RM (Risk Management), as specified for the license held.October 2010AU-2.6.2
Licensees must maintain adequate segregation of responsibilities in their staffing arrangements, to protect against the misuse of systems or errors. Such segregation should ensure that no single individual has control over all stages of a transaction.October 2010AU-2.6.3
Licensees must maintain systems and controls that are, in the opinion of the CBB, adequate to address the risks of financial crime occurring in thelicensee . These systems and controls must meet the minimum requirements contained in Module FC (Financial Crime), as specified for the license held.October 2010AU-2.6.4
As part of the licensing approval process, applicants must demonstrate in their business plan (together with any supporting documentation) what risks their business would be subject to and how they would manage those risks. Applicants may also be asked to provide an independent assessment of the appropriateness of their systems and controls to the CBB.
October 2010AU-2.7 AU-2.7 Condition 7: External Auditors
AU-2.7.1
As per Article 61 of the CBB Law,
licensees must appoint external auditors, subject to prior CBB approval. The minimum requirements regarding auditors contained in Module AA (Auditors and Accounting Standards) must be met.October 2010AU-2.7.2
Applicants must submit details of their proposed external auditor to the CBB as part of their license application.
October 2010AU-2.8 AU-2.8 Condition 8: Other Requirements
Books and Records
AU-2.8.1
Licensees must maintain comprehensive books of accounts and other records, which must be available for inspection within the Kingdom of Bahrain by the CBB, or persons appointed by the CBB, at any time.Licensees must comply with the minimum record-keeping requirements contained in Module GR. Books of accounts must comply with IFRS standards.October 2010Provision of Information
AU-2.8.2
Licensees must act in an open and cooperative manner with the CBB.Licensees must meet the regulatory reporting and public disclosure requirements contained in Modules BR and PD respectively.October 2010General Conduct
AU-2.8.3
Licensees must conduct their activities in a professional and orderly manner, in keeping with good market practice standards.Licensees must comply with the general standards of business conduct contained in Module PB, as well as the standards relating to treatment of customers contained in Module BC.October 2010License Fees
AU-2.8.4
Licensees must comply with any license fee requirements applied by the CBB.October 2010AU-2.8.5
License fee requirements are contained in Chapter AU-5.
October 2010Additional Conditions
AU-2.8.6
Licensees must comply with any other specific requirements or restrictions imposed by the CBB on the scope of their license.October 2010AU-2.8.7
When granting a license, the CBB specifies the regulated services that the
licensee may undertake.Licensees must respect the scope of their license.October 2010AU-2.8.8
In addition, the CBB may vary existing requirements or impose additional restrictions or requirements, beyond those already specified in Volume 5 (Specialised Licensees), to address specific risks.
October 2010
