Executive Summary

Retaining Authorised Status

Legal Basis

Evolution of Module

Superseded Requirements

AU-B.1.1

The Authorisation requirements in Chapter AU-1 are specifically applicable to financial institutions in highly reputable jurisdictions acceptable to the CBB. In addition, those applying for authorisation are also required to comply with the relevant requirements and procedures contained in this Module.

AU-B.1.2

Two types of authorisation are prescribed:

AU-B.1.3

Because of the general applicability of many of the requirements contained in this Module, they are supported by way of a Regulation (see Section UG-1.1 for an explanation of the CBB's rule-making powers and different regulatory instruments).

AU-B.2.1

Various requirements in Chapters AU-2 to AU-4 inclusive also apply to persons once they have been authorised by the CBB (whether as licensees or approved person).

AU-B.2.2

Chapter AU-2 applies to representative office licensees (not just applicants), since licensing conditions have to be met on a continuous basis by licensees. Similarly, Chapter AU-3 applies to the approved person on a continuous basis; it also applies to representative office licensees seeking an approved person authorisation. Chapter AU-4 contains requirements applicable to licensees, with respect to their permitted activities, as well as to licensees and approved person, with respect to the amendment or cancellation of their authorised status. Finally, Section AU-5.2 imposes annual fees on licensees.

AU-1.1.1

No person may:

AU-1.1.2

For the purposes of Rule AU-1.1.1(a), please refer to Section AU-1.3 for the definition of 'regulated representative office services'. Such activities will be deemed to be undertaken within or from the Kingdom of Bahrain if, for example, the person concerned:

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.

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).

AU-1.1.3

Financial institutions wishing to be licensed as a representative office to undertake regulated representative office services within or from the Kingdom of Bahrain must apply in writing to the CBB.

AU-1.1.4

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

AU-1.1.5

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

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.

AU-1.1.7

All applicants seeking a representative office 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.

Vetting of a Name

Suitability

General Requirement

Basis for Approval

Definitions

AU-1.3.1

Representative office licensees may undertake the following regulated representative office services:

AU-1.3.2

General Prohibitions:

AU-2.1.1

Representative office licensee must be established in the form of a Representative office in accordance with the Bahrain Commercial Companies Law of 2001.

AU-2.2.1

Representative office licensees must maintain a resident Rep Manager and premises in the Kingdom appropriate to the nature and scale of their permitted activities.

AU-2.3.1

The head office or parent company is legally responsible for the representative office in Bahrain. The head office or parent company is considered a controller in this case; therefore it must fill in the information related to the head office in the Application Form "Form 1".

AU-2.3.2

In all cases, when judging applications from existing groups, the CBB will have regard to the reputation and financial standing of the group as a whole. Where relevant, the CBB will also take into account the extent and quality of supervision applied to overseas members of the group and take into account any information provided by other supervisors in relation to any member of the group.

AU-2.4.1

The resident Rep Manager nominated to carry out the controlled function in a representative office licensee must satisfy CBB's approved person's requirements.

AU-2.4.2

The definition of controlled function is contained in AU-1.2.1, whilst AU-3 sets out CBB's approved person requirements. Applications for approved person status must be submitted using the prescribed Form 3 Application for Approved Person Status.

AU-2.5.1

Representative office licensees must maintain a level of financial resources, as agreed with the CBB, adequate for meeting their expenses.

AU-2.5.2

Representative office licensees must provide written confirmation from their head office that the head office will provide financial support to the representative office sufficient to enable it to meet its obligations as and when they fall due.

Books and Records

Provision of Information

General Conduct

License Fees

Additional Conditions

AU-3.1.1

Licensees seeking an approved person authorisation for an individual, must satisfy the CBB that the individual concerned is 'fit and proper' to undertake the controlled function in question. In the case of representative office licensees, the Rep Manager is considered a controlled function.

AU-3.1.2

The authorisation requirement for the person nominated to carry out the controlled function is contained in Section AU-1.2. The authorisation process is described in Section AU-4.2.

AU-3.1.3

Each applicant applying for approved person status and those individuals occupying approved person positions must comply with the following conditions:

AU-3.1.4

In assessing the conditions prescribed in Rule AU-3.1.3, the CBB will take into account the criteria contained in Paragraph AU-3.1.5. The CBB reviews each application on a case-by-case basis, taking into account all relevant circumstances. A person may be considered 'fit and proper' to undertake one type of controlled function but not another, depending on the function's job size and required levels of experience and expertise.

AU-3.1.5

In assessing a person s fitness and propriety, the CBB will also consider previous professional and personal conduct (in Bahrain or elsewhere) including, but not limited to, the following:

AU-3.1.6

With respect to Paragraph AU-3.1.5, the CBB will take into account the length of time since any such event occurred, as well as the seriousness of the matter in question.

AU-3.1.7

Approved persons undertaking a controlled function must act prudently, and with honesty, integrity, care, skill and due diligence in the performance of their duties. They must avoid conflicts of interest arising whilst undertaking a controlled function.

AU-3.1.8

In determining where there may be a conflict of interest arising, factors that may be considered will include whether:

AU-3.1.9

Further guidance on the process for assessing a person's 'fit and proper' status is given in Module EN (Enforcement): see Chapter EN-8.

AU-3.2.1

AU-3.2.2

[This Paragraph was deleted in January 2016.]

AU-3.2.3

[This Paragraph was moved to Paragraph AU-3.1.9 in January 2016.]

Application Form and Documents

Licensing Process and Timelines

Granting or Refusal of License

Starting Operations

Prior Approval Requirements and Process

Assessment of Application

Appeal Process

Notification Requirements and Process

Licenses

Cancellation of License

Cancellation of Approved Person Status

AU-4.5.1

In accordance with Articles 47 and 49 of the CBB Law, the CBB will publish its decision to grant, cancel or amend a license in the Official Gazette and in two local newspapers, one in Arabic and the other in English.

AU-4.5.2

For the purposes of Paragraph AU-4.5.1, the cost of publication must be borne by the Licensee.

AU-4.5.3

The CBB may also publish its decision on such cancellation or amendment using any other means it considers appropriate, including electronic means.

AU-5.1.1

Applicants seeking a representative office license from the CBB must pay a non-refundable license application fee of BD 100 at the time of submitting their formal application to the CBB.

AU-5.1.2

There are no application fees for those seeking approved person status.

AU-5.2.1

Representative office licensees must pay a fixed annual license fee of BD3,000 to the CBB, on 1st December of the preceding year for which the fees are due.

AU-5.2.2

[This Paragraph was deleted in July 2013].

AU-5.2.3

[This Paragraph was deleted in July 2013].

AU-5.2.3A

All licensees are subject to direct debit for the payment of the annual fee and must complete and submit to the CBB a Direct Debit Authorisation Form by 15th September available under Part B of Volume 5 (Specialised Licensees) CBB Rulebook on the CBB Website.

AU-5.2.4

For new representative office licensees, their first annual license fee is payable when their license is issued by the CBB. The annual fee due in relation to the first year in which the license has been granted, shall be BD3,000.

AU-5.2.5

Where a license is cancelled (whether at the initiative of the firm or the CBB), no refund is paid for any months remaining in the calendar year in question, should a fee have been paid for that year.

AU-5.2.6

Licensees failing to comply with this Section may be subject to financial penalties for date sensitive requirements as outlined in Section EN-5.3A or may have their licenses withdrawn by the CBB.

GR-A.1.1

The General Requirements Module presents a variety of different requirements that do not warrant their own stand-alone Module, but for the most part are generally applicable to the representative offices. These include, amongst others, general requirements on books and records and on the use of corporate and trade names.

Legal Basis

Evolution of Module

Superseded Requirements

Scope of Application

GR-C.1.1

Representative office licensees must ensure that all regulated financial services are provided without any discrimination based on gender, nationality, origin, language, faith, religion, physical ability or social standing.

GR-1.1.1

Representative office licensees must maintain the following records for a 10-year period, in original form or in hard copy at their premises in Bahrain. These records must be retained for at least 10 years according to Article 60 of the CBB Law.

GR-1.1.2

Representative office licensees should refer to Chapter FC-7 with reference to records pertaining to the requirements of Module FC.

GR-1.1.3

Unless otherwise agreed with the CBB in writing, records must be kept in either English or Arabic; or else accompanied by a certified English or Arabic translation. Records must be kept current.

GR-1.1.4

The requirements of Paragraph GR-1.1.3 are effective from the issusance date of this Module.

GR-1.1.5

Translations produced in compliance with Rule GR-1.1.3 may be undertaken in-house, by an employee or contractor of the licensee, providing they are certified by an appropriate officer of the licensee.

GR-1.1.6

Records must be accessible at any time from within the Kingdom of Bahrain, or as otherwise agreed with the CBB in writing.

Customer Records

GR-2.1.1

Representative offices must notify the CBB of any change in their corporate name at least one week prior to effecting the proposed change. The name of the foreign financial institution (Head Office) must only be used by the representative office in conjunction with the description "representative office". This may include the office sign, letterheads, advertising material and business cards.

GR-2.1.2

Rule GR-2.1.1 refers to the requirements contained in Article 41 of the CBB Law.

GR-2.1.3

[This Paragraph was deleted in January 2022].

GR-3.1.1

Representative office licensees must comply with the CBB Law, Bahrain Commercial Companies Law, AML Law and other applicable laws in the Kingdom.

GR-3.1.1A

Representative office licensees must obtain the CBB's prior approval for all major intended changes. These might include but not limited to change of office location and change of the representative manager.

Maintenance of Suitable Premises

Annual Reporting Requirements

Other Notifications

GR-4.1.1

[This Paragraph was moved to GR-3.1.1A].

GR-4.1.2

As specified in Article 50 of the CBB Law, a representative office licensee wishing to cease its presence in the Kingdom of Bahrain, must obtain prior written approval from the CBB.

GR-4.1.3

Representative office licensees seeking to obtain the CBB's permission to cease business must apply to the CBB in writing, in the form of a covering letter together with any supporting attachments. Unless otherwise directed by the CBB, the application must provide:

GR-4.1.4

Licensees should ensure that all outstanding expenses are settled before cessation of business and should confirm it to the CBB.

GR-4.1.5

When the CBB has given its approval to an application to cease business, the representative office licensee must publish a notice of its intention to cease business in two local daily newspapers (one in Arabic, the other in English). Notices must also be displayed in the premises. These notices must be given not less than 30 calendar days before the cessation is to take effect, and must include such information as the CBB may specify.

GR-4.1.6

The CBB will normally require that the notices required under Rule GR-4.1.5 include a statement that written representations concerning the cessation of business may be submitted to the CBB.

GR-4.1.7

Where the CBB has given its approval to cancel or amend a license, then it will also publish its decision in the Official Gazette, as well as in two local daily newspapers (one in Arabic, the other in English), once this decision has been implemented. The publication cost of these notices is to be met by the licensee concerned.

GR-4.1.8

Upon satisfactorily meeting the requirements set out in GR-3.1, the representative office licensee must surrender the original license certificate issued by the Licensing Directorate at the time of establishment, and submit confirmation of the cancellation of its commercial registration from the Ministry of Industry, Commerce and Tourism.

GR-5.1.1

Licensees are required to complete online non-financial information related to their institution by accessing the CBB's institutional information system (IIS). Licensees must update the required information at least on a quarterly basis or when a significant change occurs in the non-financial information included in the IIS. If no information has changed during the quarter, the licensee must still access the IIS quarterly and confirm that the information contained in the IIS is correct. Licensees must ensure that they access the IIS within 20 calendar days from the end of the related quarter and either confirm or update the information contained in the IIS.

GR-5.1.2

Licensees failing to comply with the requirements of Paragraph GR-5.1.1 or reporting inaccurate information may be subject to financial penalties or other enforcement actions as outlined in Module (EN) Enforcement.

GR-6.1.1

In accordance with Article 111 of the CBB Law, licensees must provide all information that the CBB may reasonably request in order to discharge its regulatory obligations.

GR-6.1.1A

Licensees must provide all relevant information and assistance to the CBB inspectors and appointed experts on demand as required by Articles 111 and 114 of the CBB Law. Failure by licensees to cooperate fully with the CBB's inspectors or appointed experts, or to respond to their examination reports within the time limits specified, will be treated as demonstrating a material lack of cooperation with the CBB which will result in other enforcement measures being considered, as described elsewhere in Module EN. This rule is supported by Article 114(a) of the CBB Law.

GR-6.1.1B

Article 163 of the CBB Law provides for criminal sanctions where false or misleading statements are made to the CBB or any person/appointed expert appointed by the CBB to conduct an inspection or investigation on the business of the licensee or the listed licensee.

Information Requested on Behalf of other Supervisors

GR-6.2.1

In accordance with Article 114 of the CBB Law, all licensees must permit representatives of the CBB, or appointed experts, access, with or without notice, to any of its business premises in relation to the discharge of the CBB's functions under the relevant law.

GR-6.2.2

A licensee must take reasonable steps to ensure that its agents, providers under outsourcing arrangements permit such access to their business premises, to the CBB.

GR-6.2.3

A licensee must take reasonable steps to ensure that each of its providers under material outsourcing arrangements deals in an open and cooperative way with the CBB in the discharge of its functions in relation to the licensee.

GR-6.2.4

The cooperation that licensees are expected to procure from such providers is similar to that expected of licensees themselves.

GR-6.3.1

Licensees must take reasonable steps to ensure that all information they give to the CBB is:

GR-6.3.2

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. The notification must include:

GR-6.3.3

If the information in Paragraph GR-6.3.2 cannot be submitted with the notification (because it is not immediately available), it must instead be submitted as soon as possible afterwards.

GR-6.4.1

The CBB uses various methods of information gathering on its own initiative which require the cooperation of licensees:

GR-6.4.2

When seeking meetings with a licensee or access to the licensee's premises, the CBB or the CBB appointee needs to have access to a licensee's documents and personnel. Such requests will be made during reasonable business hours and with proper notice. There may be instances where the CBB may seek access to the licensee's premises without prior notice. While such visits are not common, the prospect of unannounced visits is intended to encourage licensees to comply at all times with the requirements and standards imposed by the CBB as per legislation and Volume 5 of the CBB Rulebook.

GR-6.4.3

The CBB considers that a licensee should:

GR-6.4.4

The CBB considers that a licensee should take reasonable steps to ensure that the following persons act in the manner set out in Paragraph GR-6.4.3:

GR-6.4.5

In gathering information to fulfill its supervisory duties, the CBB acts in a professional manner and with due regard to maintaining confidential information obtained during the course of its information gathering activities.

Introduction

The Required Report

Other Notifications to the CBB

Permitted Disclosure by the CBB

Trilateral Meeting