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  • 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.

        May 2011

      • BR-2.1.2

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

        May 2011

      • BR-2.1.3

        A licensee must make the notifications and approvals required in Chapter BR-2 immediately 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.

        May 2011

      • BR-2.1.4

        Licensees are required to provide the CBB with a range of information to enable it to monitor the licensee's compliance with Volume 5 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.

        May 2011

    • 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) Any 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).
          May 2011

        • 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.

          May 2011

        • 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 parent undertaking or controller that may indirectly have an effect on the licensee.

          May 2011

      • Legal, Professional, Administrative or other Proceedings Against a Fund Administration 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, controller or a close link including a parent undertaking of the licensee that is known to the licensee and is significant in relation to the licensee's financial resources or its reputation.

          May 2011

        • 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.

          May 2011

      • Fraud, Errors and other Irregularities

        • BR-2.2.6

          A licensee must notify the CBB immediately if one of the following events arises and the event is significant:

          (a) It becomes aware that an employee may have committed a 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 or ancillary activities; or
          (e) Any conflicts of interest.
          May 2011

      • 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, a controller or close link, including a parent undertaking of the licensee;
          (b) An application to dissolve a controller or close link, including a parent undertaking of the licensee or to strike the licensee off the Register of Fund Administrators;
          (c) The presentation of a petition for the winding up of a controller or close link, including a parent undertaking 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 or close link, including a parent undertaking of the licensee;
          (f) The appointment of a receiver to a controller or close link, including a parent undertaking 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 or close link, including a parent undertaking of the licensee under the Bankruptcy and Composition Law of 1987 or similar legislation in another jurisdiction.
          May 2011

      • Other Supervisors

        • BR-2.2.8

          A licensee must notify the CBB immediately if it becomes subject to or ceases to be subject to the supervision of any overseas supervisor (including a home supervisor).

          May 2011

        • BR-2.2.9

          The supervisory regime and any legislative or foreign provisions to which that licensee, is subject, influence the CBB's approach to the supervision of the licensee.

          May 2011

      • External Auditor

        • BR-2.2.10

          A licensee must notify the CBB of the following:

          (a) Removal or resignation of auditor (ref. AA-1.2.1); or
          (b) Change in audit partner (ref. AA-1.3.3).
          May 2011

      • 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-4.3.5).

          May 2011

        • 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.

          May 2011

      • Capital Adequacy

        • BR-2.2.13

          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).

          May 2011

        • BR-2.2.14

          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.

          May 2011

      • Outsourcing Arrangements

        • BR-2.2.15

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

          May 2011

      • Controllers

        • BR-2.2.16

          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).

          May 2011

        • BR-2.2.17

          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.
          May 2011

      • Other Notification Requirements

        • BR-2.2.18

          Licensees must comply with any notification requirements applicable to them as stipulated in CBB Rulebook Volume 7 (CIU).

          Amended: October 2012
          May 2011

    • BR-2.3 BR-2.3 Approval Requirements

      • Change in Name

        • BR-2.3.1

          In accordance with Paragraph GR-2.1.1, 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.
          May 2011

        • BR-2.3.2

          The request under Paragraph BR-2.3.1 must include the details of the proposed new name and the date on which the licensee intends to implement the change of name.

          May 2011

      • Change of Address

        • BR-2.3.3

          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.

          May 2011

        • BR-2.3.4

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

          May 2011

        • BR-2.3.5

          As specified in Article 51 of the CBB Law, a licensee must seek approval from the CBB for its intention to carry on its business from new premises in Bahrain. This requirement applies whether or not the premises are to be used for the purposes of transacting business with customers, administration of the business or as the head office in Bahrain of the licensee.

          May 2011

      • Change in Legal Status

        • BR-2.3.6

          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.

          May 2011

      • Change in Authorised or Paid-up Capital

        • BR-2.3.7

          As specified in Article 57(3) of the CBB Law, a licensee must seek CBB approval before making any modification to its authorised 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.

          May 2011

      • Controllers and Close Links

        • BR-2.3.8

          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.
          May 2011

        • BR-2.3.9

          Every licensee authorised in Bahrain is required to submit an annual report on its controllers, as per Paragraph GR-5.1.8, and close links as set out in Paragraph GR-6.1.3.

          May 2011

      • Carrying out Business in Another Jurisdiction

        • BR-2.3.10

          A licensee must seek CBB approval and give three months' notice of its intention to undertake fund administration activities in a jurisdiction other than Bahrain, prior to commencing that business and where the effect of commencing that business may have a significant impact on:

          (a) The licensee's business in Bahrain; or
          (b) The capital resources of the licensee.
          Amended: January 2020
          Added: May 2011

      • Mergers, Acquisitions, Disposals and Establishment of New Subsidiaries

        • BR-2.3.11

          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: May 2011

        • BR-2.3.12

          Licensees will also need to consider the implications of a merger, acquisition, disposal or establishment of a new subsidiary undertaking in the context of the controllers and close links rules set out in Module GR.

          May 2011

      • Share Option Schemes

        • BR-2.3.13

          A licensee must seek prior approval from the CBB for any share option schemes it proposes to offer to its employees.

          May 2011

      • Outsourcing Arrangements

        • BR-2.3.14

          [This Paragraph was deleted in January 2023].

          Deleted: January 2023
          May 2011

      • Matters Having a Serious Supervisory Impact

        • BR-2.3.15

          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.

          May 2011

        • BR-2.3.16

          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-7.2.2).

          May 2011

        • BR-2.3.17

          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.

          May 2011

        • BR-2.3.18

          In accordance with Paragraph GR-4.1.1, a licensee must seek prior written approval from the CBB before transferring any of its business to a third party.

          May 2011

      • Dividends

        • BR-2.3.19

          Licensees, must obtain a letter of no-objection from the CBB to any dividend proposed, before submitting a proposal for a distribution of profits to a shareholder vote (ref. GR-3.1.1).

          May 2011

      • 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).

          May 2011

      • Approved Persons

        • BR-2.3.21

          A licensee must seek prior approval from the CBB for the appointment of persons undertaking a controlled function in a licensee (ref. Article 65 of the CBB Law, AU-1.2 and AU-4.2.1).

          May 2011

        • BR-2.3.22

          Licensees must seek prior CBB approval before an approved person may move from one controlled function to another within the same licensee (ref. AU-4.2.11).

          May 2011

        • BR-2.3.23

          If a controlled function falls vacant, the licensee must appoint a permanent replacement (after obtaining CBB approval), within 120 calendar days of the vacancy occurring. A licensee making immediate interim arrangements for the controlled function affected, must obtain approval from the CBB for such arrangement (ref. AU-4.3.5).

          May 2011