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  • AU-2 AU-2 Licensing Conditions

    • AU-2.1 AU-2.1 Condition 1: Legal Status

      • AU-2.1.1

        The legal status of a licensee that is an ancillary service provider licensee must be a legal form approved by the CBB.

        April 2016

    • AU-2.2 AU-2.2 Condition 2: Mind and Management

      • AU-2.2.1

        Licensees must maintain their head office and management in the Kingdom.

        April 2016

    • AU-2.3 AU-2.3 Condition 3: Controllers

      • AU-2.3.1

        Licensees must satisfy the CBB that their controllers are suitable and pose no undue risks to the licensee. Licensees must also satisfy the CBB that their group structures do not prevent the effective supervision of the licensee by the CBB and otherwise pose no undue risks to the licensee.

        April 2016

      • AU-2.3.2

        Chapter GR-7 contains the CBB's requirements and definitions regarding controllers.

        Amended: April 2017
        April 2016

      • AU-2.3.3

        In summary, controllers are persons who directly or indirectly are significant shareholders in a licensee, or who are otherwise able to exert significant influence on the licensee. The CBB seeks to ensure that controllers pose no significant risks to the licensee. In general terms, controllers are assessed in terms of their financial standing, their judicial and regulatory record, and standards of business and (where relevant) personal probity.

        April 2016

      • AU-2.3.4

        As regards group structures, the CBB seeks to ensure that these do not prevent adequate consolidated supervision being applied to financial entities within the group, and that other group entities do not pose any material financial, reputational or other risks to the licensee.

        April 2016

      • AU-2.3.5

        In all cases, when judging applications from existing groups, the CBB will have regard to the reputation and financial standing of the group as a whole. Where relevant, the CBB will also take into account the extent and quality of supervision applied to overseas members of the group and take into account any information provided by other supervisors in relation to any member of the group.

        April 2016

    • AU-2.4 AU-2.4 Condition 4: Board and Employees

      • AU-2.4.1

        Those nominated to carry out controlled functions must satisfy the CBB's approved persons requirements. This rule is supported by Article 65 of the CBB Law.

        April 2016

      • AU-2.4.2

        The definition of controlled functions is contained in Paragraph AU-1.3.2, whilst Chapter AU-3 sets out CBB's approved persons requirements.

        April 2016

      • AU-2.4.3

        The licensee's staff, taken together, must collectively provide a sufficient range of skills and experience to manage the affairs of the licensee in a sound and prudent manner. Licensees must ensure their employees meet any training and competency requirements specified by the CBB.

        April 2016

    • AU-2.5 AU-2.5 Condition 5: Financial Resources

      • Capital Funds

        • AU-2.5.1

          Licensees must maintain a level of financial resources, as agreed with the CBB, adequate for the level of business proposed. A greater amount of capital than specified in this Section may be required by the CBB on a case-by-case basis.

          April 2016

        • AU-2.5.2

          Where a licensee undertakes more than one activity outlined under Paragraph AU-1.2.1, the licensee must maintain the highest level of core capital required amongst all categories of activities which it provides.

          April 2016

      • Third Party Administrators

        • AU-2.5.3

          For third party administrators, licensees must maintain a minimum core capital of BD25,000 and adequate liquid funds representing 25% of operating expenses incurred in the preceding financial year at all times in the form of cash or liquid assets that can be converted to cash in the short-term to cover its operating expenses.

          Amended: April 2023
          April 2016

      • Card Processing and Payment Service Providers

        • AU-2.5.4

          For card processing and payment service providers, licensees must maintain a minimum core capital of BD 250,000.

          April 2016

      • Credit Reference Bureau

        • AU-2.5.5

          Licensees must maintain a minimum core capital of BD 2 million.

          April 2016

      • Shari'a Advisory/Review Services

        • AU-2.5.6

          Licensees must maintain a minimum core capital of BD 30,000.

          April 2016

      • Crowdfunding Platform Operator

        • AU-2.5.6A

          Licensees must maintain a minimum core capital of BD 25,000.

          Amended: January 2019
          Added: October 2017

      • Account Information Services Provider

        • AU-2.5.6B

          Licensees must maintain a minimum core capital of BD 25,000.

          Added: January 2019

      • Payment Initiation Services Provider

        • AU-2.5.6C

          Licensees must maintain a minimum core capital of BD 30,000.

          Added: January 2019

      • Liquidity

        • AU-2.5.7

          Licensees must maintain sufficient liquid assets to meet their obligations as they fall due in the normal course of their business.

          April 2016

    • AU-2.6 AU-2.6 Condition 6: Systems and Controls

      • AU-2.6.1

        Licensees must maintain systems and controls that are, in the opinion of the CBB, adequate for the scale and complexity of their activities. These systems and controls must meet the minimum requirements contained in Modules HC and RM (to be issued at a later date).

        April 2016

      • AU-2.6.2

        Licensees must maintain systems and controls that are, in the opinion of the CBB, adequate to address the risks of financial crime occurring in the licensee.

        April 2016

    • AU-2.7 AU-2.7 Condition 7: External Auditor

      • AU-2.7.1

        Article 61 of the CBB Law requires that licensees appoint an external auditor, subject to the CBB's prior approval. The minimum requirements regarding auditors contained in Module AA (Auditors and Accounting Standards) must be met.

        April 2016

    • AU-2.8 AU-2.8 Condition 8: Other Requirements

      • Books and Records

        • AU-2.8.1

          Article 59 of the CBB Law requires that licensees must maintain comprehensive books of accounts and other records, and satisfy the minimum record-keeping requirements contained in Article 60 of the pre-mentioned Law and Module GR. Books of accounts must comply with the financial accounting standards issued by the International Financial Reporting Standards (IFRS)/International Accounting Standards (IAS) or the applicable AAOIFI standards for Islamic licensees.

          April 2016

      • Provision of Information

        • AU-2.8.2

          Articles 58, 111, 114 and 163 of the CBB Law require that licensees and their staff must act in an open and cooperative manner with the CBB. Licensees must meet the regulatory reporting and disclosure requirements contained in Module BR. As per Article 62 of the CBB Law, audited financial statements must be submitted to the CBB within 3 months of the licensee's financial year-end.

          April 2016

      • General Conduct

        • AU-2.8.3

          Licensees must conduct their activities in a professional and orderly manner, in keeping with good market practice. Licensees must comply with the general standards of business conduct contained in Modules PB and GR.

          April 2016

      • Additional Conditions

        • AU-2.8.4

          Licensees must comply with any other specific requirements or restrictions imposed by the CBB on the scope of their license.

          April 2016

        • AU-2.8.5

          Licensees are subject to the provisions of the CBB Law. These include the right of the CBB to impose such terms and conditions, as it may deem necessary when issuing a license, as specified in Article 45 of the CBB Law. Thus, when granting a license, the CBB specifies the regulated ancillary services that the licensee may undertake. Licensees must respect the scope of their license.

          April 2016

        • AU-2.8.6

          In addition, the CBB may impose additional restrictions or requirements, beyond those already specified in Volume 5, to address specific risks. For instance, a license may be granted subject to strict limitations on intra-group transactions.

          April 2016