Reporting Requirements
BR BR Ancillary Service Providers CBB Reporting Requirements Module
BR-A BR-A Introduction
BR-A.1 BR-A.1 Purpose
Executive Summary
BR-A.1.1
This Module sets out requirements applicable to
ancillary service provider licensees regarding reporting to the CBB. These include the provision of financial information to the CBB by way of prudential returns, as well as notification to the CBB of certain specified events, some of which require prior CBB approval. This Module also outlines the methods used by the CBB in gathering information required in the supervision ofancillary service provider licensees. April 2016BR-A.1.2
This Module provides support for certain other parts of the Rulebook, mainly:
(a) Principles of Business;(c) Risk Management (to be issued);(d) Financial Crime;(e) High-Level Controls (to be issued); and(f) Auditors and Accounting Standards.April 2016BR-A.1.3
Unless otherwise stated, all reports referred to in this Module should be addressed to the Director of relevant supervision directorate of the CBB.
April 2016Legal Basis
BR-A.1.4
This Module contains the CBB's Directive relating to reporting requirements applicable to
ancillary service provider licensees and is issued under the powers available to the CBB under Article 38 of the Central Bank of Bahrain and Financial Institutions Law 2006 and its amendments ('CBB Law').April 2016BR-A.1.5
For an explanation of the CBB's rule-making powers and different regulatory instruments, see Section UG-1.1.
April 2016BR-A.2 BR-A.2 Module History
Evolution of Module
BR-A.2.1
This Module was first issued in April 2016. All subsequent changes to this Module are annotated with the end-calendar quarter date in which the change was made: UG-3 provides further details on Rulebook maintenance and version control.
April 2016BR-A.2.2
A list of recent changes made to this Module is provided below:
Module Ref. Change Date Description of Changes BR-1.4 04/2017 Added a new Section on Onsite Inspection Reporting. BR-2.2.6 12/2018 Amended sub-paragraphs (a) & (b). BR-1.1.1A 10/2019 Added a new Paragraph on disclosure of financial penalties. BR-2.3.6 01/2020 Amended Paragraph. BR-1.1.6 07/2020 Added a new Paragraph on audited clients money report. BR-1.1.6 01/2021 Amended Paragraph on audited clients money report. BR-1.1.7 01/2021 Added a new Paragraph on audited clients money. BR-1.4.2 01/2022 Amended Paragraph on the submission of the written assessment of the observations/issues raised in the Inspection draft report. BR-1.5 04/2022 Added a new Section on other reporting requirements. BR-2.3.7 01/2023 Amended Paragraph based on the new outsourcing requirements. BR-1.1.6 04/2023 Amended Paragraph on client money requirements. BR-1.1.7 04/2023 Moved Paragraph to GR-15.1.5. BR-2.2.17 07/2023 Amended Paragraph on notification to the CBB of any new products or services with added cost. Superseded Requirements
BR-A.2.3
This Module supersedes the following provisions contained in circulars or other regulatory instruments:
Circular / other reference Subject Standard Conditions and Licensing Criteria for Providers of Ancillary Services to the Financial Sector Scope of license and licensing conditions. April 2016BR-B BR-B Scope of Application
BR-B.1 BR-B.1 Scope of Application
BR-B.1.1
The content of this Module applies to all
ancillary service provider licensees authorised in the Kingdom (thereafter referred to in this Module aslicensees ).April 2016BR-1 BR-1 Prudential Reporting
BR-1.1 BR-1.1 Annual Requirements
BR-1.1.1
All
licensees are required to submit to the CBB their annual audited financial statements within 3 months of their financial year end.April 2016BR-1.1.1A
In accordance with Paragraphs EN-B.4.5 and EN-5.2.2,
licensees must disclose in their annual audited financial statements the amount of any financial penalties paid to the CBB, together with a factual description of the reason(s) given by the CBB for the penalty.Licensees which fail to comply with this requirement will be required to make the disclosure in the annual audited financial statements of the subsequent year and will be subject to an enforcement action for non-disclosure.Added: October 2019TPAs and PSPs
BR-1.1.2
The notes to the financial statements must:
(a) For TPAs, contain complete names and addresses of all insurance companies or self-funded schemes outside Bahrain with which the TPA had a contract in effect during the preceding calendar year; and(b) For PSPs, refer to the breakdown of clients' money and own funds.April 2016BR-1.1.3
In addition to the statements required in Paragraph BR-1.1.1,
licensees are required to submit to the CBB the following information within 3 months of their financial year end:(a) The external auditor's management letter;(b) A report on the licensee's close links as required under Paragraph GR-8.1.3;(c) Thelicensee's group structure and the internal organisation chart;(d) The report oncontrollers as required under Paragraph GR-7.1.10; and(e) Any supplementary information as required by the CBB.April 2016BR-1.1.4
TPAs must also submit to the CBB a breakdown of their sources of revenue within 3 months following the year end in accordance with Appendix BR-10, included under Part B Volume 5 of the CBB Rulebook.
April 2016BR-1.1.5
In accordance with the provisions of Section AA-4.1, the audited financial statements of the
licensees must comply with the International Financial Reporting Standards (IFRS), and where applicable with the Accounting and Auditing Organisation for Islamic Financial Institutions (AAOIFI).April 2016BR-1.1.6
Payment Service Providers holding
client money in the course of carrying out payment services must appoint independent auditors to perform an audit ofclient money every 6 months and submit the report to the CBB by 30th September for the 30th June report and 31st March for the 31st December report. The audit must be performed by the licensee’s external auditor or an independent third-party audit firm acceptable to the CBB. Such audit must be conducted to ensure full compliance with the requirements of Chapter GR-15, Client Money Requirements. Any non-compliance matters will be subject to an enforcement action, and in the case of recurring violations, revocation of license may be pursued.Amended: April 2023
Amended: January 2021
Added: July 2020BR-1.1.7
[This Paragraph has been moved to Paragraph GR-15.1.5].
Amended: April 2023
Added: January 2021BR-1.2 BR-1.2 Periodical Financial Statements
BR-1.2.1
PSPs are required to submit to the CBB reviewed (unaudited) semi-annual financial statements (in the same format as their annual audited accounts) on a semi-annual basis, within two months of the date of these statements. Such statements must provide the breakdown of clients' money and own funds.
April 2016BR-1.3 BR-1.3 IIS Reporting Requirements
Institutional Information System (IIS)
BR-1.3.1
All
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, thelicensee 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.April 2016BR-1.3.2
Licensees failing to comply with the requirements of Paragraph BR-1.3.1 or reporting inaccurate information may be subject to financial penalties or other enforcement action as outlined in Module (EN) Enforcement.
April 2016BR-1.4 BR-1.4 Onsite Inspection Reporting
BR.1.4.1
For the purpose of onsite inspection by the CBB,
licensees must submit requested documents and completed questionnaires to the Inspection Directorate at the CBB three working days ahead of inspection team entry date.Added: April 2017BR-1.4.2
Licensees must review the contents of the draft Inspection Report and submit to the Inspection Directorate at the CBB a written assessment of the observations/issues raised within fifteen working days of receipt of such report. Evidentiary documents supporting management’s comments must also be included in the response package.Amended: January 2022
Added: April 2017BR-1.4.3
Licensees' board are required to review the contents of the Inspection Report and submit within one month, of the report issue date, a final response to such report along with an action plan addressing the issues raised within the stipulated timeline.Added: April 2017BR-1.5 BR-1.5 Other Reporting Requirements
BR-1.5.1
Crowdfunding platform operators must provide the following information for each type of crowdfunding offer (i.e.financing-based or equity-based) within 30 days of each quarter end:(a) The aggregate amount of offers as at the quarter end;(b) The number of investors/lenders by client type (i.e. retail or accredited) as at the quarter end;(c) The aggregate amount funds raised during the quarter;(d) Successfully completed crowdfunding offers as at the quarter end;(e) Unsuccessful crowdfunding offers as at the quarter end; and(f) Total client money and assets held as at the quarter end.Added: April 2022BR-2 BR-2 Notifications and Approvals
BR-2.1 BR-2.1 Introduction
BR-2.1.1
All notifications and requests for approvals required in this Chapter are to be submitted by
licensees in writing and signed by an authorised officer in accordance with Paragraph BR-2.2.11.April 2016BR-2.1.2
Licensees are required to provide the CBB with a range of information to enable it to monitor the licensee's compliance with Volume 5 of the CBB Rulebook. Some of this information is provided through regular reports, whereas others are in response to the occurrence of a particular event (such as a change in name or address). The following Sections list the commonly occurring reports for which alicensee will be required to notify the CBB or seek its approval.April 2016BR-2.2 BR-2.2 Notification Requirements
Matters Having a Serious Supervisory Impact
BR-2.2.1
A
licensee must notify the CBB if any of the following has occurred, may have occurred or may occur in the near future:(a) Thelicensee failing to satisfy one or more of the Principles of Business referred to in Module PB;(b) Any matter which could have a significant adverse impact on thelicensee's reputation;(c) Any matter which could affect thelicensee's ability to continue to provide adequate services to its customers and which could result in serious detriment to a customer of thelicensee ;(d) Any matter in respect of thelicensee that could result in material financial consequences to the financial system or to other licensees;(e) A breach of any requirement imposed by law, regulation, directive or any other instruction issued by the CBB;(f) If alicensee 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; or(g) If thelicensee intends to suspend any or all the licensed regulated services or ceases business, setting out how it proposes to do so and, in particular, how it will treat any of its liabilities (ref GR-9.1.2).April 2016BR-2.2.2
The circumstances that may give rise to any of the events in Paragraph BR-2.2.1 are wide-ranging and the probability of any matter resulting in such an outcome, and the severity of the outcome, may be difficult to determine. However, the CBB expects
licensees to properly consider all potential events and consequences that may arise from them.April 2016BR-2.2.3
In determining whether an event that may occur in the near future should be notified to the CBB, a
licensee should consider both the probability of the event happening and the severity of the outcome should it happen. Matters having a supervisory impact could also include matters relating to acontroller that may directly or indirectly have an effect on thelicensee .April 2016Legal, Professional, Administrative or other Proceedings against a Licensee
BR-2.2.4
A
licensee must notify the CBB immediately of any legal, professional or administrative or other proceedings instituted against thelicensee ,controller of thelicensee that is known to thelicensee and is significant in relation to thelicensee's financial resources or its reputation.April 2016BR-2.2.5
A
licensee must notify the CBB of the bringing of a prosecution for, or conviction of, any offence under any relevant law against thelicensee or any of itsapproved persons .April 2016Fraud, Errors and other Irregularities
BR-2.2.6
A
licensee must notify the CBB immediately if one of the following events arises:(a) It becomes aware that a person, whether or not employed by it may have committed, or is acting with intent to commit fraud against its customers or itself;(b) A major operational or security incident where the incident has or may have a major negative impact on the financial interests of its customers or other licensees, or itself;(c) It identifies irregularities in its accounting or other records, whether or not there is evidence of fraud;(d) It suspects that one of its employees may be guilty of serious misconduct concerning his honesty or integrity and which is connected with thelicensee's regulated activities; or(e) Conflicts of interest that may affect the operation of thelicensee .Amended: December 2018
April 2016BR-2.2.7
If the
licensee may have suffered material financial losses as a result of the incident, or may suffer reputational loss, the CBB will wish to consider this and whether the incident is indicative of weaknesses in thelicensee's internal controls.April 2016Insolvency, Bankruptcy and Winding Up
BR-2.2.8
Except in instances where the CBB has initiated the following actions, a
licensee must notify the CBB immediately of any of the following events:(a) The calling of a meeting to consider a resolution for winding up thelicensee or acontroller of thelicensee ;(b) An application to dissolve acontroller of thelicensee; (c) The presentation of a petition for the winding up of acontroller of thelicensee ;(d) The making of any proposals, or the making of, a composition or arrangement with any one or more of thelicensee's creditors, for material amounts of debt;(e) An application for the appointment of an administrator or trustee in bankruptcy to acontroller of thelicensee ;(f) The appointment of a receiver to thelicensee or to acontroller of thelicensee (whether an administrative receiver or a receiver appointed over particular property); or(g) An application against thelicensee , acontroller of thelicensee under Part 10 of the CBB Law or the Bankruptcy and Composition Law of 1987 or similar legislation in another jurisdiction.April 2016External Auditor
BR-2.2.9
A
licensee must notify the CBB of the following:(a) Removal or resignation of its external auditor (ref. AA-1.2.1); or(b) A change in the partner in charge of conducting the external audit. (Ref. AA-1.3.3).April 2016Approved Persons
BR-2.2.10
A
licensee must notify the CBB of the termination of employment of anyapproved persons , including reasons for their termination and arrangements for replacing them (ref. AU-4.4.9).April 2016Authorised Signatories
BR-2.2.11
At the time of authorisation (when the license is granted) or whenever a change occurs, in order to maintain an up-to-date record of authorised signatories of respective ancillary service providers, the CBB requires all
licensees to submit to thelicensee's CBB supervisory point of contact a list of specimen signatures of the officials authorised to sign on behalf of the concernedlicensee , together with, where appropriate, details of what they are authorised to sign for.April 2016Capital Adequacy Requirements
BR-2.2.12
In the event that a
licensee fails to meet any of the requirements specified in Section AU-2.5 it must, on becoming aware that it has breached the requirements, immediately notify the CBB in writing.April 2016BR-2.2.13
As specified in Article 58 of the CBB Law, a
licensee must notify the CBB immediately of any matter that may affect its financial position, currently or in the future, or limit its ability to meet its obligations.April 2016Outsourcing Arrangements
BR-2.2.14
Licensees must immediately inform their normal supervisory contact at the CBB of any material problems or changes encountered with an outsourcing provider.April 2016Controllers
BR-2.2.15
If, as a result of circumstances outside the
licensee's knowledge and/or control, a change incontrollers is triggered prior to CBB approval being sought or obtained, thelicensee must notify the CBB on the earlier of:(a) The moment the change takes effect; or(b) The moment thelicensee becomes aware of the proposed change (ref. GR-7.1.6).April 2016BR-2.2.16
A
licensee must notify the CBB of any event as specified under Article 52 of the CBB Law.April 2016Introduction of New or Expanded Customer Products and Facilities
BR-2.2.17
All
licensees are required to notify the CBB before the introduction of any new products or services or any changes in existing product/service that will have an additional financial cost to the customers. The CBB will respond to the concernedlicensee within one week of receipt of the notification if it has any observations on the new application.Amended: July 2023
April 2016BR-2.3 BR-2.3 Approval Requirements
Change of Address
BR-2.3.1
As specified in Article 51 of the CBB Law, a
licensee must seek approval from the CBB and give reasonable advance notice of a change in the address of thelicensee's principal place of business in Bahrain.April 2016BR-2.3.2
The request under Paragraph BR-2.3.1 must include the details of the proposed new address and the date on which the
licensee intends to use the new address.April 2016Change in Legal Status
BR-2.3.3
A
licensee must seek CBB approval and give reasonable advance notice of a change in its legal status that may, in any way, affect its relationship with or limit its liability to its customers.April 2016Change in Paid-up and/or Issued Capital
BR-2.3.4
As specified in Article 57(3) of the CBB Law, a
licensee must seek CBB prior approval before making any modification to its issued and/or paid-up capital.April 2016Controllers
BR-2.3.5
In accordance with Section GR-7.1,
licensees must seek CBB prior approval and give reasonable advance notice of any of the following events:(a) A person acquiring control or ceasing to have control of thelicensee ;(b) An existingcontroller acquiring an additional type of control (such as ownership or significant influence) or ceasing to have a type of control of thelicensee ;(c) An existingcontroller increasing the percentage of shares or voting power of thelicensee ; and(d) An existingcontroller becoming or ceasing to be a parent undertaking of thelicensee .April 2016Mergers, Acquisitions and Disposals of Assets and Liabilities
BR-2.3.6
A
licensee incorporated in Bahrain must seek CBB prior approval and give reasonable advance notice of its intention to enter into a:(a) Merger with another undertaking;(b) Proposed acquisition or disposal of all or a major part of assets and liabilities, inside or outside the Kingdom; or(c) Modify its memorandum or articles of association.Amended: January 2020
Added: April 2016Outsourcing Arrangements
BR-2.3.7
[This Paragraph was deleted in January 2023].
Deleted: January 2023
April 2016Other Matters Having a Supervisory Impact
BR-2.3.8
A
licensee must seek prior approval from the CBB for any material changes or proposed changes to the information provided to the CBB in support of an authorisation application that occurs after authorisation has been granted.April 2016External Auditor
BR-2.3.9
A
licensee must seek prior approval from the CBB for the appointment or re-appointment of its external auditor (ref. AU-2.7.1 and AA-1.1.1).April 2016Dividend Distribution
BR-2.3.10
Licensees , must obtain the CBB's prior written approval to any dividend proposed to be distributed to the shareholders, in accordance with Chapter GR-6.April 2016Approved Persons
BR-2.3.11
A
licensee must seek prior approval from the CBB for the appointment of persons undertaking acontrolled function (ref. Article 65 of the CBB Law, AU-1.3 and AU-4.3.1).April 2016BR-2.3.12
Licensees must seek prior CBB approval before anapproved person may move from onecontrolled function to another within the samelicensee (ref. AU-4.3.11).April 2016BR-2.3.13
If a
controlled function falls vacant, alicensee making immediate interim arrangements for thecontrolled function affected, must obtain approval from the CBB (ref. AU-4.4.9).April 2016Cessation of Business
BR-2.3.14
In accordance with Paragraph GR-9.1.1 and Article 50 of the CBB Law,
licensees must seek the CBB's prior approval should they wish to cease to provide or suspend any or all of the licensed regulated services of their operations and/or liquidate their business.April 2016BR-3 BR-3 Information Gathering by the CBB
BR-3.1 BR-3.1 Power to Request Information
BR-3.1.1
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.April 2016BR-3.1.2
Licensees must provide all relevant information and assistance to the CBB inspectors andappointed experts on demand as required by Articles 111 and 114 of the CBB Law. Failure bylicensees to cooperate fully with the CBB's inspectors orappointed 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.April 2016BR-3.1.3
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 thelicensee or the listedlicensee .April 2016Information Requested on Behalf of other Supervisors
BR-3.1.4
The CBB may ask
licensees to provide it with information at the request of or on behalf of other supervisors to enable them to discharge their functions properly. Those supervisors may include overseas supervisors or government agencies in Bahrain.April 2016BR-3.2 BR-3.2 Access to Premises
BR-3.2.1
In accordance with Article 114 of the CBB Law, a
licensee must permit representatives of the CBB, or persons appointed for the purpose by the CBB to have access, with or without notice, during reasonable business hours to any of its business premises in relation to the discharge of the CBB's functions under the relevant law.April 2016BR-3.2.2
A
licensee must take reasonable steps to ensure that its agents and providers under outsourcing arrangements permit such access to their business premises, to the CBB.April 2016BR-3.2.3
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 thelicensee .April 2016BR-3.2.4
The cooperation that
licensees are expected to procure from such providers is similar to that expected oflicensees themselves.April 2016BR-3.3 BR-3.3 Accuracy of Information
BR-3.3.1
Licensees must take reasonable steps to ensure that all information they give to the CBB is:(a) Factually accurate or, in the case of estimates and judgements, fairly and properly based after appropriate enquiries have been made by thelicensee ; and(b) Complete, in that it should include everything which the CBB would reasonably and ordinarily expect to have.April 2016BR-3.3.2
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:(a) Details of the information which is or may be false, misleading, incomplete or inaccurate, or has or may have changed;(b) An explanation why such information was or may have been provided; and(c) The correct information.April 2016BR-3.3.3
If the information in Paragraph BR-3.3.2 cannot be submitted with the notification (because it is not immediately available), it must instead be submitted as soon as possible afterwards.
April 2016BR-3.4 BR-3.4 Methods of Information Gathering
BR-3.4.1
The CBB uses various methods of information gathering on its own initiative which require the cooperation of
licensees :(a) Representatives of the CBB may make onsite visits at the premises of thelicensee . These visits may be made on a regular basis, or on a sample basis, for special purposes such as theme visits (looking at a particular issue across a range oflicensees ), or when the CBB has a particular reason for visiting alicensee ;(b) Appointees of the CBB may also make onsite visits at the premises of thelicensee . Appointees of the CBB may include persons who are not CBB staff, but who have been appointed to undertake particular monitoring activities for the CBB, such as in the case ofappointed experts (refer to Chapter EN-2);(c) The CBB may request thelicensee to attend meetings at the CBB's premises or elsewhere;(d) The CBB may seek information or request documents by telephone, at meetings or in writing, including electronic communication; or(e) The CBB may requirelicensees to submit various documents or notifications, as per Chapter BR-2, in the ordinary course of their business such as financial reports or on the happening of a particular event in relation to thelicensee such as a change in control.April 2016BR-3.4.2
When seeking meetings with a
licensee or access to thelicensee's premises, the CBB or the CBB appointee needs to have access to alicensee'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 thelicensee's premises without prior notice. While such visits are not common, the prospect of unannounced visits is intended to encouragelicensees to comply at all times with the requirements and standards imposed by the CBB as per legislation and Volume 5 of the CBB Rulebook.April 2016BR-3.4.3
The CBB considers that a
licensee should:(a) Make itself readily available for meetings with representatives or appointees of the CBB;(b) Give representatives or appointees of the CBB reasonable access to any records, files, tapes or computer systems, which are within thelicensee's possession or control, and provide any facilities which the representatives or appointees may reasonably request;(c) Produce to representatives or appointees of the CBB specified documents, files, tapes, computer data or other material in thelicensee's possession or control as may be reasonably requested;(d) Print information in thelicensee's possession or control which is held on computer or otherwise convert it into a readily legible document or any other record which the CBB may reasonably request;(e) Permit representatives or appointees of the CBB to copy documents of other material on the premises of thelicensee at thelicensee's expense and to remove copies and hold them elsewhere, or provide any copies, as may be reasonably requested; and(f) Answer truthfully, fully and promptly all questions which representatives or appointees of the CBB reasonably put to it.April 2016BR-3.4.4
The CBB considers that a
licensee should take reasonable steps to ensure that its employees act in the manner set out in Paragraph BR-3.4.3.April 2016BR-3.4.5
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.
April 2016BR-3.5 BR-3.5 Role of the Appointed Expert
Introduction
BR-3.5.1
The content of this Chapter is applicable to all
licensees andappointed experts .April 2016BR-3.5.2
The purpose of the contents of this Chapter is to set out the roles and responsibilities of
appointed experts when appointed pursuant to Article 114 or 121 of the CBB Law (see EN-2.1.1). These Articles empower the CBB to assign some of its officials or others to inspect or conduct investigations oflicensees .April 2016BR-3.5.3
The CBB uses its own inspectors to undertake on-site examinations of
licensees as an integral part of its regular supervisory efforts. In addition, the CBB may commission reports on matters relating to the business oflicensees in order to help it assess their compliance with CBB requirements. Inspections may be carried out either by the CBB's own officials, by duly qualifiedappointed experts appointed for the purpose by the CBB, or a combination of the two.April 2016BR-3.5.4
The CBB will not, as a matter of general policy, publicise the appointment of an
appointed expert , although it reserves the right to do so where this would help achieve its supervisory objectives. Both theappointed expert and the CBB are bound to confidentiality provisions restricting the disclosure of confidential information with regards to any such information obtained in the course of the investigation.April 2016BR-3.5.5
Unless the CBB otherwise permits,
appointed experts should not be the same firm appointed as external auditor of thelicensee .April 2016BR-3.5.6
Appointed experts will be appointed in writing, through an appointment letter, by the CBB. In each case, the CBB will decide on the range, scope and frequency of work to be carried out byappointed experts .April 2016BR-3.5.7
All proposals to appoint
appointed experts require approval by an Executive Director or more senior official of the CBB. The appointment will be made in writing, and made directly with theappointed experts concerned. A separate letter is sent to thelicensee , notifying them of the appointment. At the CBB's discretion, atrilateral meeting may be held at any point, involving the CBB and representatives of thelicensee and theappointed experts , to discuss any aspect of the investigation.April 2016BR-3.5.8
Following the completion of the investigation, the CBB will normally provide feedback on the findings of the investigation to the
licensee .April 2016BR-3.5.9
Appointed experts will report directly to and be responsible to the CBB in this context and will specify in their report any limitations placed on them in completing their work (for example due to thelicensee's group structure). The report produced by theappointed experts is the property of the CBB (but is usually shared by the CBB with the firm concerned).April 2016BR-3.5.10
Compliance by
appointed experts with the contents of this Chapter will not, of itself, constitute a breach of any other duty owed by them to a particularlicensee (i.e. create aconflict of interest ).April 2016BR-3.5.11
The CBB may appoint one or more of its officials to work on the
appointed experts' team for a particularlicensee .April 2016The Required Report
BR-3.5.12
The scope of the required report will be determined and detailed by the CBB in the appointment letter. Commissioned
appointed experts would normally be required to report on one or more of the following aspects of alicensee's business:(a) Accounting and other records;(b) Internal control systems;(c) Returns of information provided to the CBB;(d) Operations of certain departments; and/or(e) Other matters specified by the CBB.April 2016BR-3.5.13
Appointed experts will be required to form an opinion on whether, during the period examined, thelicensee is in compliance with the relevant provisions of the CBB Law and the CBB's relevant requirements, as well as other requirements of Bahrain Law and, where relevant, industry best practice locally and/or internationally.April 2016BR-3.5.14
The
appointed experts' report should follow the format set out in Appendix BR-1, in part B of the CBB Rulebook.April 2016BR-3.5.15
Unless otherwise directed by the CBB or unless the circumstances described in Section BR-3.5.19 apply, the report must be discussed with the Board of directors and/or
senior management in advance of it being sent to the CBB.April 2016BR-3.5.16
Where the report is
qualified by exception , the report must clearly set out the risks which thelicensee runs by not correcting the weakness, with an indication of the severity of the weakness should it not be corrected.Appointed experts will be expected to report on the type, nature and extent of any weaknesses found during their work, as well as the implications of a failure to address and resolve such weaknesses.April 2016BR-3.5.17
If the
appointed experts conclude, after discussing the matter with thelicensee , that they will give a negative opinion (as opposed to onequalified by exception ) or that the issue of the report will be delayed, they must immediately inform the CBB in writing giving an explanation in this regard.April 2016BR-3.5.18
The report must be completed, dated and submitted, together with any comments by directors or management (including any proposed timeframe within which the
licensee has committed to resolving any issues highlighted by the report), to the CBB within the timeframe applicable.April 2016Other Notifications to the CBB
BR-3.5.19
Appointed experts must communicate to the CBB, during the conduct of their duties, any reasonable belief or concern they may have that any of the requirements of the CBB, including the criteria for licensing alicensee (see Module AU), are not or have not been fulfilled, or that there has been a material loss or there exists a significant risk of material loss in the concernedlicensee , or that the interests of customers are at risk because of adverse changes in the financial position or in the management or other resources of alicensee . Notwithstanding the above, it is primarily thelicensee's responsibility to report such matters to the CBB.April 2016BR-3.5.20
The CBB recognises that
appointed experts cannot be expected to be aware of all circumstances which, had they known of them, would have led them to make a communication to the CBB as outlined above. It is only whenappointed experts , in carrying out their duties, become aware of such a circumstance that they should make detailed inquiries with the above specific duty in mind.April 2016BR-3.5.21
If
appointed experts decide to communicate directly with the CBB in the circumstances set out in Paragraph BR-3.5.19, they may wish to consider whether the matter should be reported at an appropriate senior level in thelicensee at the same time and whether an appropriate senior representative of thelicensee should be invited to attend the meeting with the CBB.April 2016Permitted Disclosure by the CBB
BR-3.5.22
Information which is confidential and has been obtained under, or for the purposes of, this chapter or the CBB Law may only be disclosed by the CBB in the circumstances permitted under the Law. This will allow the CBB to disclose information to
appointed experts to fulfil their duties. It should be noted, however, thatappointed experts must keep this information confidential and not divulge it to a third party except with the CBB's permission and/or unless required by Bahrain Law.April 2016Trilateral Meeting
BR-3.5.23
The CBB may, at its discretion, call for a
trilateral meeting(s) to be held between the CBB and representatives of the relevantlicensee and theappointed experts . This meeting will provide an opportunity to discuss theappointed experts' examination of, and report on, thelicensee .April 2016