AU-3 AU-3 Approved Persons
AU-3.1 AU-3.1 Approved Persons Conditions
AU-3.1.1
Licensees seeking anapproved person authorisation for an individual, must satisfy the CBB that the individual concerned is 'fit and proper' to undertake thecontrolled function in question.April 2016AU-3.1.2
The authorisation requirements for persons nominated to carry out
controlled functions is contained in Section AU-1.3. The authorisation process is described in Section AU-3.2.Amended: October 2017
April 2016AU-3.1.3
Each applicant applying for
approved person status and those individuals occupyingapproved person positions must comply with the following conditions:(a) Has not previously been convicted of any felony or crime that relates to his/her honesty and/or integrity unless he/she has subsequently been restored to good standing;(b) Has not been the subject of any adverse finding in a civil action by any court or competent jurisdiction, relating to fraud;(c) Has not been adjudged bankrupt by a court unless a period of 10 years has passed, during which the person has been able to meet all his/her obligations and has achieved economic accomplishments;(d) Has not been disqualified by a court, regulator or other competent body, as a director or as a manager of a corporation;(e) Has not failed to satisfy a judgement debt under a court order resulting from a business relationship;(f) Must have personal integrity, good conduct and reputation;(g) Has appropriate professional and other qualifications for thecontrolled function in question; and(h) Has sufficient experience to perform the duties of thecontrolled function .April 2016AU-3.1.4
In assessing the conditions prescribed in Rule AU-3.1.3, the CBB will take into account the criteria contained in Paragraph AU-3.1-5. The CBB reviews each application on a case-by-case basis, taking into account all relevant circumstances. A person may be considered 'fit and proper' to undertake one type of
controlled function but not another, depending on the function's job size and required levels of experience and expertise. Similarly, a person approved to undertake acontrolled function in onelicensee may not be considered to have sufficient expertise and experience to undertake nominally the samecontrolled function but in a much biggerlicensee .April 2016AU-3.1.5
In assessing a person's fitness and propriety, the CBB will also consider previous professional and personal conduct (in Bahrain or elsewhere) including, but not limited to, the following:
(a) The propriety of a person's conduct, whether or not such conduct resulted in a criminal offence being committed, the contravention of a law or regulation, or the institution of legal or disciplinary proceedings;(b) A conviction or finding of guilt in respect of any offence, other than a minor traffic offence, by any court or competent jurisdiction;(c) Any adverse finding in a civil action by any court or competent jurisdiction, relating to misfeasance or other misconduct in connection with the formation or management of a corporation or partnership;(d) Whether the person, or any body corporate, partnership or unincorporated institution to which the applicant has, or has been associated with as a director, controller, manager or company secretary been the subject of any disciplinary proceeding, investigation or fines by any government authority, regulatory agency or professional body or association;(e) The contravention of any financial services legislation;(f) Whether the person has ever been refused a license, authorisation, registration or other authority;(g) Dismissal or a request to resign from any office or employment;(h) Whether the person has been a member of a board of directors, partner or manager of a corporation or partnership which has gone into liquidation or administration or where one or more partners have been declared bankrupt whilst the person was connected with that partnership;(i) The extent to which the person has been truthful and open with supervisors; and(j) Whether the person has ever entered into any arrangement with creditors in relation to the inability to pay due debts.April 2016AU-3.1.6
With respect to Paragraph AU-3.1.5, the CBB will take into account the length of time since any such event occurred, as well as the seriousness of the matter in question.
April 2016AU-3.1.7
Approved persons undertaking acontrolled function must act prudently, and with honesty, integrity, care, skill and due diligence in the performance of their duties. They must avoid conflicts of interest arising whilst undertaking acontrolled function .April 2016AU-3.1.8
In determining where there may be a conflict of interest arising, factors that may be considered will include whether:
(a) A person has breached any fiduciary obligations to the company or terms of employment;(b) A person has undertaken actions that would be difficult to defend, when looked at objectively, as being in the interest of thelicensee ; and(c) A person has failed to declare a personal interest that has a material impact in terms of the person's relationship with thelicensee .April 2016AU-3.1.9
Further guidance on the process for assessing a person's 'fit and proper' status is given in Module EN (Enforcement): see Chapter EN-8.
April 2016AU-3.2 AU-3.2 Approved Persons Requirements
AU-3.2.1
Licensees must obtain CBB prior written approval before a person is formally appointed to acontrolled function . The request for CBB approval must be made by submitting to the CBB a duly completed Form 3 (Application for Approved Person status) and Curriculum Vitae after verifying that all the information contained in the Form 3, including previous experience, is accurate. Form 3 is available under Volume 5 Part B Authorisation Forms of the CBB Rulebook.Added: October 2017AU-3.2.2
When the request for
approved person status forms part of a license application, the Form 3 must be marked for the attention of the Director, Licensing Directorate. When the submission to undertake acontrolled function is in relation to an existinglicensee , the Form 3, except if dealing with a MLRO, must be marked for the attention of the concerned supervisory point of contact at the CBB. In the case of the MLRO, Form 3 should be marked for the attention of the Director, Compliance Directorate.Amended: April 2018
Added: October 2017AU-3.2.3
When submitting Form 3,
licensees must ensure that the Form 3 is:(a) Submitted to the CBB with a covering letter signed by an authorised representative of thelicensee , seeking approval for the proposedcontrolled function ;(b) Submitted in original form;(c) Submitted with a certified copy of the applicant's passport, original or certified copies of educational and professional qualification certificates (and translation if not in Arabic or English) and the Curriculum Vitae; and(d) Signed by an authorised representative of the licensee and all pages stamped with the licensee's seal.Added: October 2017AU-3.2.4
Licensees seeking to appoint members of the board of directors must seek CBB approval for all the candidates to be put forward for election/approval at a shareholders' meeting, in advance of the agenda being issued to shareholders. CBB approval of the candidates does not in any way limit shareholders' rights to refuse those put forward for election/approval.Added: October 2017AU-3.2.5
For existing
licensees applying for the appointment of anycontrolled functions , the authorised representative should be a duly authorised representative of thelicensee and must submit with Form 3: Application for Approved Person Status, internal documentary evidence supporting the appointment of the duly authorised representative of thelicensee .Added: October 2017Assessment of Application
AU-3.2.6
The CBB shall review and assess the application for
approved person status to ensure that it satisfies all the conditions required in Paragraph AU-3.1.3 and the criteria outlined in Paragraph AU-3.1.5Added: October 2017AU-3.2.7
For purposes of Paragraph AU-3.2.6,
licensees should give the CBB a reasonable amount of notice in order for an application to be reviewed. The CBB shall respond within 15 business days from the date of meeting all regulatory requirements, including but not limited to receiving the application complete with all the required information and documents, as well as verifying references.Added: October 2017AU-3.2.8
The CBB reserves the right to refuse an application for
approved person status if it does not satisfy the conditions provided for in Paragraph AU-3.1.3 and does not satisfy the CBB criteria in Paragraph AU-3.1.5. A notice of such refusal is issued by registered mail to thelicensee concerned, setting out the basis for the decision.Added: October 2017Appeal Process
AU-3.2.9
Licensees or the nominatedapproved persons may, within 30 calendar days of the notification, appeal against the CBB's decision to refuse the application forapproved person status. The CBB shall decide on the appeal and notify thelicensee of its decision within 30 calendar days from submitting the appeal.Added: October 2017AU-3.2.10
Where notification of the CBB's decision to grant a person
approved person status is not issued within 15 business days from the date of meeting all regulatory requirements, including but not limited to, receiving the application complete with all the required information and documents,licensees or the nominatedapproved persons may appeal to the concerned Executive Director of the CBB provided that the appeal is justified with supporting documents. The CBB shall decide on the appeal and notify thelicensee of its decision within 30 calendar days from the date of submitting the appeal.Added: October 2017Notification Requirements and Process
AU-3.2.11
Licensees must immediately notify the CBB when anapproved person ceases to hold acontrolled function together with an explanation as to the reasons why (see Paragraph AU-4.4.9). In such cases, theirapproved person status is automatically withdrawn by the CBB.Added: October 2017AU-3.2.12
Licensees must immediately notify the CBB in case of any material change to the information provided in a Form 3 submitted for anapproved person .Added: October 2017AU-3.2.13
Licensees must immediately notify the CBB when they become aware of any of the events listed in Paragraph EN-8.2.3, affecting one of theirapproved persons .Added: October 2017AU-3.2.13A
Licensees must immediately notify the CBB should they become aware of information that could reasonably be viewed as calling into question an approved person’s compliance with CBB’s ‘fit and proper’ requirement (see AU3.1).Added: January 2021Change in Controlled Function
AU-3.2.14
Licensees must seek prior CBB approval before anapproved person may move from onecontrolled function to another within the samelicensee .Added: October 2017AU-3.2.15
In such instances, a new Form 3 (Application for Approved Person status) should be completed and submitted to the CBB. Note that a person may be considered 'fit and proper' for one
controlled function , but not for another, if for instance the new role requires a different set of skills and experience. Where anapproved person is moving to acontrolled function in anotherlicensee , the firstlicensee should notify the CBB of that person's departure (see Rule AU-4.4.9), and the newlicensee should submit a request for approval under Rule AU-1.3.1.Added: October 2017