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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 administration services (as defined under Paragraph AU-1.1.11), 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
        May 2011

      • AU-1.1.2

        For the purposes of Rule AU-1.1.1(a), please refer to Paragraphs AU-1.1.11 and AU-1.1.12 for the definition of 'regulated administration services' and Paragraph AU-1.1.13 for the definition of '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;
        (b) Uses an address situated in the Kingdom of Bahrain for its correspondence; or
        (c) Directly solicits clients, who are resident within the Kingdom of Bahrain.
        May 2011

      • AU-1.1.3

        For the purposes of Rule AU-1.1.1(b), persons would be considered in breach of this requirement if they were to trade as, or incorporate a company in Bahrain with a name containing the words (or the equivalents in any language) 'fund administration', without holding the appropriate CBB license or the prior approval of the CBB.

        May 2011

      • AU-1.1.3A

        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-1.1.3B

        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-1.1.4

        Where a person is licensed under Volumes 1 or 2, i.e. as a bank, or under Volume 4 as a Category 1 or Category 2 investment firm licensee, then a separate license under Volume 5 is not required in order to undertake activities of the kind specified under Paragraph AU-1.1.11, subject to the licensee meeting all the requirements of Volumes 1, 2 or 4.

        Amended: April 2012
        May 2011

      • AU-1.1.5

        Persons licensed by the CBB may also undertake the specific activities covered by the definition of regulated administration services, since these specific activities also form part of the definition of regulated banking services (or regulated Islamic banking services in the case of Islamic banks) or regulated investment services. In such cases, licensees are not required to hold a separate administrators license.

        Amended: April 2012
        May 2011

      • AU-1.1.6

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

        May 2011

      • AU-1.1.7

        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.
        May 2011

      • AU-1.1.8

        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.
        May 2011

      • AU-1.1.9

        Detailed rules and guidance regarding information requirements and processes for licenses can be found in Section AU-5.1. As specified in Paragraph AU-5.1.12, 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.

        May 2011

      • AU-1.1.10

        All applicants seeking an administrator 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, fund administration licensees must maintain these criteria on an on-going basis.

        May 2011

      • AU-1.1.11

        For the purposes of Volume 5 (Specialised Licensees), regulated administration services, in relation to financial instruments administered by the fund administrator, include:

        (a) Fund management accounting services;
        (b) Client enquiries;
        (c) Valuation and pricing (including tax returns);
        (d) Regulatory compliance monitoring;
        (e) Maintenance of unit-holder/fund instruments register;
        (f) Distribution of income;
        (g) Unit issues and redemption of units in CIU and other financial instruments;
        (h) Contracts settlements (including certificate dispatch); and
        (i) General record-keeping.
        May 2011

      • AU-1.1.12

        For the purposes of Volume 5 (Specialised Licensees), regulated administration services, in relation to a registrar, include:

        (a) Client enquiries;
        (b) Maintenance of unit-holder/fund instruments register;
        (c) Distribution of income;
        (d) Certificate dispatch; and
        (e) General record-keeping
        May 2011

      • AU-1.1.13

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

        (a) Undertaking one or more of the activities specified in Paragraphs AU-1.1.11 and AU-1.1.12 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.
        May 2011

    • AU-1.2 AU-1.2 Approved Persons

      • General Requirement

        • AU-1.2.1

          Licensees must obtain the CBB's prior written approval for any person wishing to undertake a controlled function in 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
          May 2011

        • 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;
          (e) Money Laundering Reporting Officer (MLRO); and
          (f) Deputy Money Laundering Reporting Officer (if any).
          Amended: January 2016
          May 2011

        • AU-1.2.3

          Combination of the above controlled functions is subject to the CBB's approval. Controlled functions (b) to (f) are in relation to Bahrain operations.

          Amended: January 2013
          May 2011

      • 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 in 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.

          May 2011

      • 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).

          May 2011

        • 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 Marketing', is not necessarily a member of the Board of Directors and therefore may not fall under the definition of Paragraph AU-1.2.5.

          May 2011

        • 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.

          May 2011

        • 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.

          May 2011

        • 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 Compliance or Internal Audit; or the Chief Financial Officer.

          May 2011

        • AU-1.2.10

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

          May 2011

        • AU-1.2.11

          The controlled functions of Money Laundering Reporting Officer/Deputy Money Laundering Reporting Officer are defined under Chapter FC-4.

          May 2011