HC-A HC-A Introduction
HC-A.1 HC-A.1 Purpose
Executive Summary
HC-A.1.1
This Module presents requirements that have to be met by
licensees with respect to:(a) Corporate governance principles issued by the Ministry of Industry and Commerce as "The Corporate Governance Code"; and(b) Related high-level controls and policies.January 2013HC-A.1.2
The Principles referred to in this Module are in line with the Principles relating to the Corporate Governance Code issued by the Ministry of Industry and Commerce.
January 2013HC-A.1.3
The purpose of the Module is to establish best practice corporate governance principles in Bahrain, and to provide protection for investors and other
licensee's stakeholders through compliance with those principles.January 2013HC-A.1.4
Whilst the Module follows best practice, it is nevertheless considered as the minimum standard to be applied.
January 2013Structure of this Module
HC-A.1.5
This Module follows the structure of the Corporate Governance Code and each Chapter deals with one of the nine Principles of corporate governance. The numbered directives included in the Code are Rules for purposes of this Module. Recommendations under the Code have been included as guidance.
January 2013HC-A.1.6
The Module also incorporates other high-level controls and policies that apply in particular to
licensees .January 2013HC-A.1.7
All references in this Module to 'he' or 'his' shall, unless the context otherwise requires, be construed as also being references to 'she' and 'her'.
January 2013The Comply or Explain Principle
HC-A.1.8
This Module is issued as a Directive (as amended from time to time) in accordance with Article 38 of the Central Bank of Bahrain and Financial Institutions Law 2006 ('CBB Law'). In common with other Rulebook Modules, this Module contains a mixture of Rules and Guidance (See Module UG-1.2 for detailed explanation of Rules and Guidance). All Rulebook content that is categorised as a Rule must be complied with by those to whom the content is addressed. Other parts of this Module are Guidance; nonetheless every
financing company licensee to whom Module HC applies, is expected to comply with recommendations made as Guidance in Module HC or explain its noncompliance in the Annual Report in accordance with Paragraph PD-1.3.5 and to the CBB (see Chapter HC-8).January 2013Monitoring and Enforcement of Module HC
HC-A.1.9
Disclosure and transparency are underlying principles of Module HC. Disclosure is crucial to allow outside monitoring to function effectively. This Module looks to a combined monitoring system relying on the board, the
licensee's shareholders and the CBB.January 2013HC-A.1.10
It is the board's responsibility to see to the accuracy and completeness of the
licensee's corporate governance guidelines and compliance with Module HC. Failure to comply with this Module is subject to enforcement measures as outlined in Module EN (Enforcement).January 2013Legal Basis
HC-A.1.11
This Module contains the CBB's Directive (as amended from time to time) relating to high-level controls and is issued under the powers available to the CBB under Article 38 of the Central Bank of Bahrain and Financial Institutions Law 2006 ('CBB Law'). The Directive in this Module is applicable to
financing companies licensees (including theirapproved persons ).January 2013HC-A.1.12
For an explanation of the CBB's rule-making powers and different regulatory instruments, see Section UG-1.1.
January 2013Effective Date
HC-A.1.13
The contents in this Module are effective from January 2013.
January 2013HC-A.2 HC-A.2 Module History
HC-A.2.1
This Module was first issued in January 2013. Any material changes that have subsequently been made to this Module are annotated with the calendar quarter date in which the change was made: Chapter UG-3 provides further details on Rulebook maintenance and version control.
January 2013HC-A.2.2
A list of recent changes made to this Module is provided below:
Module Ref. Change Date Description of Changes HC-8.2 01/2014 Amended as a result of the issuance of Module PD. Appendix D 01/2014 Requirements moved to Module PD. HC-1.2.12,
HC-1.2.13
and HC-1.3.910/2014 Corrected cross reference. HC-1.3.11 10/2014 Corrected typo. HC-2.3.3 04/2016 Added a requirement for the licensee to have in place a board approved policy on the employment of relatives of approved persons. HC-2.4.1A 04/2016 Added the requirement to disclose to the board on annual basis relatives of any approved persons occupying controlled functions. HC-7.2 04/2016 Added requirements dealing with shareholders' meetings. HC-7.2.3A 07/2017 Amended paragraph to be in line with Article (199) of the Commercial Companies law. HC-1.4.12 01/2020 Added a new Paragraph on independent directors. HC-1.4.13 01/2020 Added a new Paragraph on termination of Board membership of a retired, terminated CEO. HC-2.3.2 01/2020 Amended Paragraph on policy and procedures approval. HC-5.4.2 04/2020 Added a new Paragraph on KPIs compliance with AML/CFT requirements. HC-1.8.1 07/2022 Amended Paragraph on the committees of the Board. HC-6.2.1 07/2022 Amended Paragraph on the appointment of senior management. Superseded Requirements
HC-A.2.3
This Module supersedes the following provisions contained in circulars or other regulatory requirements:
Document Ref. Document Subject Volumes 1 and 2 Module HC January 2013
