PD-A.1.1

The purpose of this Module is to set out the detailed qualitative and quantitative public disclosure requirements that financing companies should adhere to in order to enhance corporate governance and financial transparency through better public disclosure. Such disclosures also help to protect customers and facilitate market discipline.

PD-A.1.2

This Module provides support for certain other parts of the Rulebook, namely:

PD-A.1.3

This Module also provides support for certain aspects relating to disclosure requirements stipulated in the Central Bank of Bahrain and Financial Institutions Law (Decree No. 64 of 2006) and the Bahrain Commercial Companies Law (as amended).

Legal Basis

PD-A.2.1

All financing companies must have a formal disclosure policy as part of their overall communications strategy, supported by documented procedures and approved by the Board of Directors that addresses the disclosures that the company makes and the internal controls over the disclosure process. In addition, all financing companies must carry out a regular review of the validity of their disclosures (in terms of scope and accuracy) as outlined in Modules BR and AA.

PD-A.2.2

All financing companies are required to publish their annual audited, and reviewed quarterly financial statements per the rules set out in this Module and Article 62 of the CBB Law, the Bahrain Commercial Companies Law (as amended), the Rulebook of the licensed exchange and Volume 6 (Capital Markets), where applicable. Such financial statements must be prepared in accordance with International Financial Reporting Standards (IFRS) in the case of conventional financing companies and Financial Accounting Standards (FAS) issued by the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI) in the case of Shari'a compliant financing companies.

PD-A.2.3

The CBB requires that each financing company maintain an up-to-date checklist of all applicable IFRS/AAOIFI standards and also the disclosure requirements set out in this Module for full compliance purposes. Such checklists should be part of the financing company's public disclosure procedures.

PD-A.2.4

The disclosures specified in this Module, which are in addition to those required by applicable accounting standards, must be reviewed by the financing company's external auditor based on agreed upon procedures (unless IFRS/ AAOIFI require that the concerned disclosures are audited).

PD-A.2.5

The disclosures in this Module may be presented as an accompanying document or appendices to the Annual Report or in the Notes to the Financial Statements at the discretion of the concerned financing company.

PD-A.2.6

The external auditor's review must also check other statements in the Annual Report such as the Chairman's report to ensure that such statements are consistent with the audited financial statements and the disclosures required by this Module. All qualitative or descriptive disclosures in the Annual Report must be based upon and reflective of facts and actual practice by the financing company (and be subject to the above review by the company's external auditor).

PD-A.2.7

If situations arise where disclosures required in this Module are in conflict with those required under IFRS/AAOIFI and/or any listing requirements issued by the CBB or a licensed exchange, listed financing companies should first follow the CBB's requirements as contained in Volume 6 (Capital Markets). In such situations, financing companies should explain any material differences between the accounting or other disclosures and the disclosure required in this Module. This explanation does not have to take the form of a line-by-line reconciliation, but should provide stakeholders with sufficient detail to make an objective assessment of the financing company's financial and operational health. Moreover, a formal notification to the CBB is required in such a situation.

PD-A.2.8

A financing company should decide which disclosures are relevant for it based on materiality and subject to the concurrence of the financing company's external auditor. For the financing companies' guidance, information would be regarded as material if its omission or misstatement could change or influence the assessment or decision of a user relying on that information for the purpose of making economic decisions.

PD-A.2.9

Non-compliance with these disclosure requirements is likely to lead to enforcement actions, such as a fine, as outlined in Module EN (Enforcement) .

PD-A.3.1

Proprietary information encompasses information (for example on products or systems), that if shared with competitors would render a financing company's investment in these products/systems less valuable, and hence would undermine its competitive position. Information about customers is often confidential, in that it is provided under the terms of a legal agreement or counterparty relationship. This has an impact on what financing companies should reveal in terms of information about their customer base, as well as details on their internal commercial arrangements, for instance methodologies used, parameter estimates, data etc.

PD-A.3.2

If a financing company considers that disclosure of certain information required in Section PD-1.3 may prejudice seriously its position by making public information that is either proprietary or confidential in nature, it need not disclose those specific items, subject to the prior approval of the CBB. In such situations, the CBB may require the disclosure of more general information about the subject matter of the requirement, together with the fact that, and the reason why, the specific items of information have not been disclosed. This limited exemption is not intended to conflict with the disclosure requirements under IFRS and AAOIFI, as applicable.

Evolution of Module

Superseded Requirements