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  • AU-1.1 AU-1.1 Licensing

    • General Prohibitions

      • AU-1.1.1

        No person may:

        (a) Undertake (or hold themselves out to undertake) financing company services, 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.
        January 2013

      • AU-1.1.2

        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.

        January 2013

      • AU-1.1.3

        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).

        January 2013

      • AU-1.1.4

        Licensees are prohibited from taking deposits or any similar liabilities and Shari'a compliant investment accounts.

        January 2013

      • AU-1.1.5

        Only persons licensed to undertake regulated financing services (or regulated Islamic financing services), may use the term 'financing company' in their corporate or trading names, or otherwise hold themselves out to be a financing company.

        January 2013

      • AU-1.1.6

        Licensees are not obliged to include the word 'financing company' in their corporate or trading names; however, they may be required to make clear their regulatory status in their letter heads, customer communications, website and so on (See Paragraph GR-2.2.1).

        January 2013

      • AU-1.1.7

        For the purposes of Rule AU-1.1.2, persons will be considered in breach of this requirement if they attempt to operate as, or incorporate a financing company in Bahrain with a name containing the word "financing company" (or the equivalents in any language), without holding the appropriate CBB license or obtaining the prior approval of the CBB.

        January 2013

      • AU-1.1.8

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

        January 2013

      • AU-1.1.9

        An application for a license must fill in the Application form (Form 1) online, available on the CBB website under E-services/online Forms and must contain:

        (a) A business plan specifying the type of business to be conducted;
        (b) Application forms (Form 2) for all controllers; and
        (c) Application forms (Form 3) for all controlled functions.
        Amended: July 2019
        January 2013

      • AU-1.1.10

        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.
        January 2013

      • AU-1.1.11

        Detailed rules and guidance regarding information requirements and processes for license applications can be found in Section AU-4.1. As specified in Paragraph AU-4.1.14, the CBB will provide a formal decision on license application within 60 calendar days of all required documentation having been submitted in a form acceptable to the CBB.

        January 2013

      • AU-1.1.12

        In granting new licenses, the CBB will specify the specific types of regulated financing company service for which a license has been granted.

        January 2013

      • AU-1.1.13

        All applicants for financing company licenses must satisfy the CBB that they meet, by the date of their license, the minimum conditions for licensing, as specified in Chapter AU-2. Once licensed, licensees must maintain these criteria on an on-going basis.

        January 2013

      • AU-1.1.14

        Licensees must not carry on any commercial business in the Kingdom of Bahrain or elsewhere other than financing business and activities directly arising from or incidental to that business.

        January 2013

      • AU-1.1.15

        Rule AU-1.1.14 is intended to restrict licensees from undertaking any material non-financial business activities. The Rule does not prevent a financing company undertaking commercial activities if these directly arise from their financing business: for instance, in the context of Islamic contracts, such as murabaha, ijara and musharaka, where the company may hold the physical assets being financed or leased. Nor does it restrict a licensee from undertaking commercial activities if, in the judgment of the CBB, they are incidental and do not detract from the financial nature of the financing companies operations.

        January 2013

      • AU-1.1.16

        Rule AU-1.1.14 applies to the legal entity holding the financing company license. A licensee may thus own subsidiaries that undertake non-financial activities, although the CBB generally does not support the development of significant commercial activities within a licensee's group.

        January 2013