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  • AU-1.3 AU-1.3 Definition of Regulated Financing Company Services

    • AU-1.3.1

      Regulated financing company services are any of the following activities, carried on by way of business:

      (a) Offering instalment credit;
      (b) Offering revolving credit facilities (such as credit cards);
      (c) Offering Shari'a financing contracts; and
      (d) Issuing/administering means of payment (charge or prepaid cards, whether physical or digital.
      Amended: July 2022
      January 2013

    • AU-1.3.2 AU-1.3.2

      Upon application, the CBB may exclude specific transactions from the definition of regulated financing company services.

      January 2013

      • AU-1.3.1A

        Where licensees are undertaking regulated activities in accordance with Shari'a, all transactions and contracts concluded by regulated financing company services must comply with Sharia standards issued by the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI). The validity of the contract or transaction is not impacted, if at a later date, the relevant AAOIFI Sharia standards are amended.

        Added: October 2020

      • AU-1.3.1B

        A financing company licensee may choose to offer a limited range of financing activity as determined by its business plan provided that such activity includes short term instalment credits only.

        Added: July 2022

      • AU-1.3.3

        For the purposes of Rule AU-1.3.1, carrying on a regulated financing company service by way of business means:

        (a) Undertaking the regulated financing company service of (a), plus any of the activities (b) to (d), as defined in Section AU-1.3, for commercial gain;
        (b) Holding oneself out as willing and able to engage in such activities; or
        (c) Regularly soliciting other persons to engage in transactions constituting such activities.
        January 2013

      • AU-1.3.4

        Licensees are allowed to transact with both residents and non-residents of the Kingdom of Bahrain, and in both Bahrain Dinar and foreign currencies.

        January 2013

      • AU-1.3.5

        Licensees may undertake transactions with both Bahraini residents and non-residents.

        January 2013

      • AU-1.3.6

        Licensees should note that the same legal entity cannot combine regulated financing company services with other regulated services, such as regulated insurance services and regulated ancillary services.

        January 2013

      • General Exclusions

        • AU-1.3.7

          A person does not carry on an activity constituting a regulated financing company service if the activity:

          (a) Is carried on in the course of a business which does not ordinarily constitute the carrying on of financial services;
          (b) May reasonably be regarded as a necessary part of any other services provided in the course of that business; and
          (c) Is not remunerated separately from the other services.
          January 2013

        • AU-1.3.8

          A person does not carry on an activity constituting a regulated financing company service if the person is a body corporate and carries on that activity solely with or for other bodies corporate that are members of the same group.

          January 2013

        • AU-1.3.9

          A person does not carry on an activity constituting a regulated financing company service if such person carries on an activity with or for another person, and they are both members of the same family.

          January 2013

        • AU-1.3.10

          A person does not carry on an activity constituting a regulated financing company service if the sole or main purpose for which the person enters into the transaction is to limit any identifiable risks arising in the conduct of his business, providing the business conducted does not itself constitute a regulated activity.

          January 2013

        • AU-1.3.11

          A person does not carry on an activity constituting a regulated financing company service if that person is a government body charged with the management of financial instruments on behalf of a government or public body or an exempt person, as specified by Royal decree.

          January 2013

      • Providing Credit

        • AU-1.3.12

          Providing credit is defined as the provision of credit to a person in his capacity as borrower or potential borrower. This includes consumer and mortgage credit and providing credit by way of finance leases and factoring.

          January 2013

      • Offering Shari'a Financing Contracts

        • AU-1.3.13

          Offering Shari'a financing contracts is defined as entering into, or making arrangement for another person to enter into, a contract to provide finance in accordance with Shari'a principles, such as murabaha, bay muajjal, bay salam, ijara wa iktina and istisna'a contracts. etc...

          January 2013

      • Issuing Means of Payment

        • AU-1.3.14

          [This Paragraph was deleted in July 2022].

          Deleted: July 2022
          January 2013