• BR-2 BR-2 Notifications and Approvals

    • BR-2.1 BR-2.1 Introduction

      • BR-2.1.1

        All notifications and approvals required in this Chapter are to be submitted by licensees in writing.

        October 2010

      • BR-2.1.2

        In this Module, the term 'in writing' includes electronic communication capable of being reproduced in paper form.

        October 2010

      • BR-2.1.3

        A licensee must make the notifications and approvals required in Chapter BR-2 immediately when it becomes aware, or has information which reasonably suggests, that any of the matters in Chapter BR-2 have occurred, may have occurred or may occur in the near future.

        October 2010

      • BR-2.1.4

        The requirements imposed on licensees under this Chapter apply whether the event relates to a matter that has occurred in Bahrain or in any other jurisdiction.

        October 2010

      • BR-2.1.5

        Licensees are required to provide the CBB with a range of information to enable it to monitor the licensee's compliance with Volume 5 (Specialised Licensees) of the CBB Rulebook. Some of this information is provided through regular reports, whereas others are in response to the occurrence of a particular event (such as a change in name or address). The following Sections list the commonly occurring reports for which a licensee will be required to notify the CBB or seek its approval.

        Amended: January 2011
        October 2010

    • BR-2.2 BR-2.2 Notification Requirements

      • Matters Having a Serious Supervisory Impact

        • BR-2.2.1

          A licensee must notify the CBB if any of the following has occurred, may have occurred or may occur in the near future:

          (a) The licensee failing to satisfy one or more of the Principles of Business referred to in Module PB;
          (b) Any matter which could have a significant adverse impact on the licensee's reputation;
          (c) Any matter which could affect the licensee's ability to continue to provide adequate services to its customers and which could result in serious detriment to a customer of the licensee;
          (d) Any matter in respect of the licensee that could result in material financial consequences to the financial system or to other licensees;
          (e) A significant breach of any provision of the Rulebook (including a Principle);
          (f) A breach of any requirement imposed by the relevant law or by regulations or an order made under any relevant law by the CBB; or
          (g) If a licensee becomes aware, or has information that reasonably suggests that it has or may have provided the CBB with information that was or may have been false, misleading, incomplete or inaccurate, or has or may have changed in a material way, it must notify the CBB immediately (ref. BR-3.3.2).
          October 2010

        • BR-2.2.2

          The circumstances that may give rise to any of the events in Paragraph BR-2.2.1 are wide-ranging and the probability of any matter resulting in such an outcome, and the severity of the outcome, may be difficult to determine. However, the CBB expects licensees to consider properly all potential consequences of events.

          October 2010

        • BR-2.2.3

          In determining whether an event that may occur in the near future should be notified to the CBB, a licensee should consider both the probability of the event happening and the severity of the outcome should it happen. Matters having a supervisory impact could also include matters relating to a controller that may indirectly have an effect on the licensee.

          October 2010

      • Legal, Professional, Administrative or other Proceedings Against a Licensee

        • BR-2.2.4

          A licensee must notify the CBB immediately of any legal, professional or administrative or other proceedings instituted against the licensee or controller of the licensee that is known to the licensee and is significant in relation to the licensee's financial resources or its reputation.

          October 2010

        • BR-2.2.5

          A licensee must notify the CBB of the bringing of a prosecution for, or conviction of, any offence under any relevant law against the licensee that would prevent the licensee from meeting the Principles of Business (Module PB) or any of its Directors, officers or approved persons from meeting the fit and proper requirements of Module AU.

          Amended: January 2011
          October 2010

      • Fraud, Errors and other Irregularities

        • BR-2.2.6

          A licensee must notify the CBB immediately if one of the following events arises:

          (a) It becomes aware that an employee may have committed fraud against one of its customers;
          (b) It becomes aware that a person, whether or not employed by it, is acting with intent to commit fraud against it;
          (c) It identifies irregularities in its accounting or other records, whether or not there is evidence of fraud;
          (d) It suspects that one of its employees may be guilty of serious misconduct concerning his honesty or integrity and which is connected with the licensee's regulated activities; or
          (e) Any conflicts of interest.
          Amended: January 2011
          October 2010

      • Insolvency, Bankruptcy and Winding Up

        • BR-2.2.7

          Except in instances where the CBB has initiated the following actions, a licensee must notify the CBB immediately of any of the following events:

          (a) The calling of a meeting to consider a resolution for winding up the licensee or a controller of the licensee;
          (b) An application to dissolve a controller of the licensee or to strike the licensee off the Register of Money Changing Companies;
          (c) The presentation of a petition for the winding up of a controller of the licensee;
          (d) The making of any proposals, or the making of, a composition or arrangement with any one or more of the licensee's creditors, for material amounts of debt;
          (e) An application for the appointment of an administrator or trustee in bankruptcy to a controller of the licensee;
          (f) The appointment of a receiver to a controller of the licensee (whether an administrative receiver or a receiver appointed over particular property); or
          (g) An application for an interim order against the licensee, a controller of the licensee under the Bankruptcy and Composition Law of 1987 or similar legislation in another jurisdiction.
          October 2010

      • [Deleted January 2011]

        Deleted: January 2011
        October 2010

        • BR-2.2.8

          [This Paragraph was deleted in January 2011].

        • BR-2.2.9

          [This Paragraph was deleted in January 2011].

      • External Auditor

        • BR-2.2.10

          A licensee must notify the CBB of the following:

          (a) Removal or resignation of its external auditor (ref. AA-1.2.1); or
          (b) Change in audit partner (ref. AA-1.3.3).
          October 2010

      • Approved Persons

        • BR-2.2.11

          A licensee must notify the CBB of the termination of employment of approved persons, including particulars of reasons for the termination and arrangements with regard to replacement (ref. AU-4.4.6).

          October 2010

        • BR-2.2.12

          Licensees must immediately notify the CBB when they become aware of any of the events listed in Paragraph EN-8.2.3, affecting one of their approved persons.

          Amended: January 2011
          October 2010

        • BR-2.2.13

          Licensees must seek prior CBB approval before an approved person may move from one controlled function to another within the same licensee.

          October 2010

      • Capital Adequacy

        • BR-2.2.14

          In the event that a licensee fails to meet any of the requirements specified in Module CA (Capital Adequacy), it must, on becoming aware that it has breached the requirements, immediately notify the CBB in writing (ref. CA-1.1.5).

          October 2010

        • BR-2.2.15

          As specified in Article 58 of the CBB Law, a licensee must notify the CBB immediately of any matter that may affect its financial position, currently or in the future, or limit its ability to meet its obligations.

          October 2010

      • Branches

        • BR-2.2.16

          An application for authorisation of a new branch will not be considered by the CBB unless the written confirmation that the preceding branch is operational, as required in Rule AU-4.2.4 above, has been submitted.

          October 2010

      • Outsourcing Arrangements

        • BR-2.2.17

          Licensees must immediately inform their normal supervisory contact at the CBB of any material problems or changes encountered with an outsourcing provider.

          Amended: January 2023
          October 2010

        • BR-2.2.18

          A licensee must nominate an approved person within the licensee to handle the responsibility of the day-to-day relationship with the outsourcing provider and to ensure that relevant risks are addressed. The CBB should be informed of the designated individual as part of the written prior approval required under Rule RM-2.1.7.

          October 2010

      • Controllers

        • BR-2.2.19

          If, as a result of circumstances outside the licensee's knowledge and/or control, one of the changes to their controllers specified in Paragraph GR-5.1.1 is triggered prior to CBB approval being sought or obtained, the licensee must notify the CBB as soon as it becomes aware of the fact and no later than 15 calendar days after the change occurs (ref. GR-5.1.4).

          October 2010

        • BR-2.2.20

          As specified in Article 52 of the CBB Law, a licensee must notify the CBB of the following events:

          (a) If effective control over a licensee takes place indirectly whether by way of inheritance or otherwise;
          (b) Gaining control directly as a result of any action leading to it; or
          (c)The intention to take any of the actions that would lead to control.
          October 2010

      • Promotional Schemes

        • BR-2.2.21

          Licensees must notify the CBB, and send copies of the documentation relating to promotional schemes, at least 2 weeks prior to their launch, after ensuring that such promotional schemes are in line with the Rules under Section BC-2.2.

          October 2010

    • BR-2.3 BR-2.3 Approval Requirements

      • Branches or Subsidiaries

        • BR-2.3.1

          In accordance with Rule AU-4.2.1, a licensee should seek prior written approval from the CBB for opening a branch or a subsidiary.

          Amended: April 2011
          October 2010

        • BR-2.3.2

          Licensees wishing to cancel an authorisation for a branch or subsidiary must obtain the CBB's written approval, before ceasing the activities of the branch or subsidiary.

          Amended: April 2011
          October 2010

      • Change in Name

        • BR-2.3.3

          In accordance with Paragraph GR-3.1.1, a licensee must seek prior written approval from the CBB and give reasonable advance notice of a change in:

          (a) The licensee's name (which is the registered name if the licensee is a body corporate); or
          (b) The licensee's trade name.
          October 2010

        • BR-2.3.4

          The request under Paragraph BR-2.3.3 must include the details of the proposed new name and the date on which the licensee intends to implement the change of name.

          October 2010

      • Change of Address

        • BR-2.3.5

          As specified in Article 51 of the CBB Law, a licensee must seek approval from the CBB and give reasonable advance notice of a change in the address of the licensee's principal place of business in Bahrain, and that of its branches.

          October 2010

        • BR-2.3.5A

          For purposes of Paragraph BR-2.3.5, the relocation of a branch within the same geographical area constitutes a change of address. However, the relocation of a branch to a different geographical area in Bahrain warrants a request for authorisation to open a new branch (as per Section AU-4.2) and close the existing branch.

          Added: October 2012

        • BR-2.3.6

          The request under Paragraph BR-2.3.5 must include the details of the proposed new address and the date on which the licensee intends to implement the change of address.

          October 2010

      • Change in Legal Status

        • BR-2.3.7

          A licensee must seek CBB approval and give reasonable advance notice of a change in its legal status that may, in any way, affect its relationship with or limit its liability to its customers.

          October 2010

      • Change in Paid-up or Issued Capital

        • BR-2.3.8

          As specified in Article 57(a)3. of the CBB Law, a licensee must seek CBB approval before making any modification to its issued or paid-up capital. In the case that a licensee has been granted approval to increase its paid-up capital, confirmation from the external auditor stating that the amount has been deposited in the licensee's bank account will subsequently be required.

          October 2010

      • Licensed Regulated Activities

        • BR-2.3.9

          Licensees wishing to cancel their license must obtain the CBB's written approval, before ceasing their activities. All such requests must be made in writing to the Director, Financial Institutions Supervision, setting out in full the reasons for the request and how the business is to be wound up.

          October 2010

        • BR-2.3.10

          As specified in Article 50 of the CBB Law, a licensee wishing to cease to provide all or any of its licensed regulated services, completely or at any of its branches, must obtain prior written approval from the CBB.

          October 2010

        • BR-2.3.11

          Licensees seeking to obtain the CBB's permission to cease business must submit to the CBB a formal request to the CBB for the appointment of a liquidator acceptable to the CBB.

          October 2010

      • Controllers

        • BR-2.3.12

          In accordance with Section GR-5.1, licensees must seek CBB approval and give reasonable advance notice of any of the following events concerning the licensee:

          (a) A person acquiring control or ceasing to have control;
          (b) An existing controller acquiring an additional type of control (such as ownership or significant influence) or ceasing to have a type of control;
          (c) An existing controller increasing the percentage of shares or voting power beyond 10%, 20% or 50%; and
          (d) An existing controller becoming or ceasing to be a parent undertaking.
          October 2010

      • Mergers, Acquisitions, Disposals and Establishment of New Subsidiaries

        • BR-2.3.13

          A licensee incorporated in Bahrain must seek CBB approval and give reasonable advance notice of its intention to enter into a:

          (a) Merger with another undertaking; or
          (b) Proposed acquisition, disposal or establishment of a new subsidiary undertaking.
          Amended: January 2020
          Added: October 2010

        • BR-2.3.14

          Licensees wishing to cancel an authorisation for a subsidiary undertaking must obtain the CBB's written approval, before ceasing the activities of the subsidiary.

          Amended: April 2011
          October 2010

      • Outsourcing Arrangements

        • BR-2.3.15

          [This Paragraph was deleted in January 2023].

          Deleted: January 2023
          October 2010

      • Matters Having a Supervisory Impact

        • BR-2.3.16

          A licensee must seek prior approval from the CBB for any material changes or proposed changes to the information provided to the CBB in support of an authorisation application that occurs after authorisation has been granted.

          October 2010

        • BR-2.3.17

          Any licensee that wishes, intends or has been requested to do anything that might contravene, in its reasonable opinion, the provisions of UNSCR 1373 (and in particular Article 1, Paragraphs c) and d) of UNSCR 1373) must seek, in writing, the prior written opinion of the CBB on the matter (ref. FC-8.2.2).

          October 2010

        • BR-2.3.18

          As specified in Article 57 of the CBB Law, a licensee wishing to modify its Memorandum or Articles of Association, must obtain prior written approval from the CBB.

          October 2010

        • BR-2.3.19

          As specified in Article 57 of the CBB Law, a licensee wishing to transfer all or a major part of its assets or liabilities inside or outside the Kingdom, must obtain prior written approval from the CBB.

          October 2010

      • External Auditor

        • BR-2.3.20

          A licensee must seek prior approval from the CBB for the appointment or re-appointment of its external auditor (ref. AU-2.7.1 and AA-1.1.1).

          October 2010

      • Dividend Distribution

        • BR-2.3.21

          Licensees, must obtain the CBB's prior written approval to any dividend proposed to be distributed to the shareholders, in accordance with Chapter GR-4.

          October 2010

      • Approved Persons

        • BR-2.3.22

          A licensee must seek prior approval from the CBB for the appointment of persons undertaking a controlled function (ref. Article 65 of the CBB Law, AU-1.2 and AU-4.3).

          October 2010

        • BR-2.3.23

          Licensees must seek prior CBB approval before an approved person may move from one controlled function to another within the same licensee (ref. AU-4.3.10).

          October 2010

        • BR-2.3.24

          If a controlled function falls vacant, a licensee making immediate interim arrangements for the controlled function affected, must obtain approval from the CBB (ref. AU-4.4.6).

          October 2010

      • Loans Extended to Related Parties

        • BR-2.3.25

          In accordance with Section GR-11, Licensees must obtain the CBB's prior written approval for any loan in excess of BD 15,000, extended to the employees of the business.

          October 2010

        • BR-2.3.26

          Licensees must obtain the CBB's prior written approval before writing-off any loan extended to the employees of the business.

          October 2010

      • Withdrawals

        • BR-2.3.27

          No funds may be withdrawn by shareholders from the licensee without the necessary prior written approval of the CBB.

          October 2010