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  • AU-4.1 AU-4.1 Licensing

    • Applications Form and Documents

      • AU-4.1.1

        Applicants for a license must fill in the Application Form 1 (Application for a License) online, available on the CBB website under Eservices/online Forms. The applicant must upload scanned copies of supporting documents listed in Paragraph AU-4.1.4, unless otherwise directed by the CBB.

        Amended: July 2019
        Amended: April 2018
        April 2016

      • AU-4.1.2

        Articles 44 to 47 of the CBB Law govern the licensing process. This prescribes a single stage process, with the CBB required to take a decision within 60 calendar days of an application being deemed complete (i.e. containing all required information and documents). See below, for further details on the licensing process and timelines.

        April 2016

      • AU-4.1.3

        References to applicant mean the proposed licensee seeking authorisation. An applicant may appoint a representative — such as a law firm or professional consultancy — to prepare and submit the application. However, the applicant retains full responsibility for the accuracy and completeness of the application, and is required to certify the application form accordingly. The CBB also expects to be able to liaise directly with the applicant during the authorisation process, when seeking clarification of any issues.

        April 2016

      • AU-4.1.4

        Unless otherwise directed by the CBB, the following documents must be provided together with the covering letter referred in Paragraph AU-4.1.1 above in support of a license application:

        (a) A duly completed Form 2 (Application for Authorisation of Controller) for each controller of the proposed licensee;
        (b) A duly completed Form 3 (Application for Approved Person status), for each individual applying to undertake controlled functions of the proposed licensee;
        (c) A comprehensive business plan for the application, addressing the matters described in AU-4.1.6;
        (d) Where the applicant is an existing institution, a copy of the applicant's commercial registration;
        (e) Where the applicant is a corporate body, a certified copy of a Board resolution of the applicant along with minutes of the concerned meeting, confirming the board's decision to seek a CBB ancillary service provider license;
        (f) In the case of applicants that are part of a regulated group, a letter of non-objection to the proposed license application from the applicant's home supervisor, together with confirmation that the group is in good regulatory standing and is in compliance with applicable supervisory requirements, including those relating to capital adequacy and solvency requirements;
        (g) Copies of the audited financial statements of the applicant's major shareholder and/or group (as directed by the CBB), for the three years immediately prior to the date of application;
        (h) A draft copy of the applicant's (and parent's where applicable) memorandum and articles of association, addressing the matters described in AU-4.1.7;
        (i) Evidence of competency and qualifications for Shari'a advisor; and
        (j) Information and documents required under Section AU-4.7 for PSP, AISP and PSIP applicants.
        Amended: July 2021
        Added: April 2016

      • AU-4.1.5

        The CBB may require that an acceptably worded letter of guarantee be provided in support of the application for a license. Where the application for the license is for an incorporated entity, the CBB may seek a letter of guarantee from controllers. Where the application is for an overseas licensee, the CBB may seek a letter of guarantee from the parent company.

        April 2016

      • AU-4.1.6

        The business plan submitted in support of an application should include:

        (a) An outline of the history of the applicant and its shareholders;
        (b) The reasons for applying for a license, including the applicant's strategy and market objectives;
        (c) The proposed type of activities to be carried on by the applicant in/from the Kingdom of Bahrain;
        (d) The proposed Board and senior management of the applicant and the proposed organisational structure of the applicant;
        (e) An independent assessment of the risks that may be faced by the applicant, together with the proposed systems and controls framework to be put in place for addressing those risks and to be used for the main business functions. For card processing and payment services providers, IT security measures must be outlined in the plan;
        (f) An opening balance sheet for the applicant, together with a three-year financial projection, with all assumptions clearly outlined, demonstrating that the applicant will be able to meet applicable leverage and liquidity requirements; and
        (g) For TPA's, details setting forth the applicant's capability for providing a sufficient number of experienced and qualified personnel in the areas of claims' processing and recordkeeping.
        April 2016

      • AU-4.1.7

        The applicant's (and where applicable, its parent's) memorandum and articles of association must explicitly provide for it to undertake the activities proposed in the licensed application, and must preclude the applicant from undertaking other commercial activities, unless these arise out of its activities or are incidental to those.

        April 2016

      • AU-4.1.8

        All documentation provided to the CBB as part of an application for a license must be in either Arabic or English language. Any documentation in a language other than English or Arabic must be accompanied by a certified English or Arabic translation thereof.

        April 2016

      • AU-4.1.9

        Any material changes or proposed changes to the information provided to the CBB in support of an authorisation application that occurs prior to authorisation must be reported to the CBB.

        April 2016

      • AU-4.1.10

        Failure to inform the CBB of the changes specified in AU-4.1.9 is likely to be viewed as a failure to provide full and open disclosure of information, and thus a failure to meet licensing condition AU-2.8.2.

        April 2016

    • Licensing Process and Timelines

      • AU-4.1.11

        As part of the application process, the CBB will provide a formal decision on a license application within 60 calendar days of all required documentation having been submitted in a form acceptable to the CBB, as specified in Article 44 (e) of the CBB Law. The applicant must submit within 6 months of the application date, all remaining requirements or otherwise has to submit a new application to the CBB. Applicants are encouraged to approach the CBB to discuss their application at an early stage, so that any specific questions can be dealt with prior to the finalisation of the application.

        April 2016

      • AU-4.1.12

        Before the final approval is granted to a licensee, confirmation from a retail bank addressed to the CBB that the licensee's capital (injected funds) — as specified in the business plan submitted under Rule AU-4.1.4 — has been paid in must be provided to the CBB. In addition, for payment services providers and card processing companies, a bank guarantee of BD50,000 must be provided.

        Amended: October 2017
        Amended: April 2017
        April 2016

    • Granting or Refusal of a License

      • AU-4.1.13

        To be granted a license, an applicant should demonstrate compliance with the applicable requirements of the CBB Law and this Module. Should a license be granted, the CBB will notify the applicant in writing of the fact; the CBB will also publish its decision to grant a license in the Official Gazette and in two local newspapers (one published in Arabic, the other in English). The license may be subject to such terms and conditions as the CBB deems necessary for the additional conditions being met.

        Amended: October 2019
        April 2016

      • AU-4.1.14

        The CBB may refuse to grant a license if in its opinion:

        (a) The requirements of the CBB Law or this Module are not met;
        (b) False or misleading information has been provided to the CBB, or information which should have been provided to the CBB has not been so provided; or
        (c) The CBB believes it necessary in order to safeguard the interests of potential customers.
        April 2016

      • AU-4.1.15

        Where the CBB proposes to refuse an application for a license, it will give the applicant a written notice to that effect. Applicants will be given a minimum of 30 calendar days from the date of the written notice to appeal the decision, as per the appeal procedures specified in the notice; these procedures will comply with the provisions contained in Article 46 of the CBB Law.

        Amended: October 2019
        April 2016

    • Starting Operations

      • AU-4.1.16

        Within 6 months of the license being issued, the new licensee must provide to the CBB:

        (a) A detailed action plan for establishing the operations and supporting infrastructure of the licensee, such as the completion of written policies and procedures, and recruitment of remaining employees (having regard to the time limit set by Article 48 (c) of the CBB Law);
        (b) The registered office address and details of premises to be used to carry out the business of the proposed licensee;
        (c) The address in the Kingdom of Bahrain where full business records will be kept;
        (d) The licensee's contact details including telephone and fax number, e-mail address and website;
        (e) A description of the business continuity plan;
        (f) A description of the IT system that will be used, including details of how IT systems and other records will be backed up;
        (g) A copy of the external auditor's acceptance to act as an external auditor for the applicant;
        (h) A copy of the Ministry of Industry & Commerce commercial registration certificate in Arabic and English languages;
        (i) A copy of the licensee's business card and any written communication (including stationery, website, e-mail, business documentation, etc.) including a statement that the ancillary service provider is licensed by the CBB;
        (j) An updated organisation chart showing the reporting lines, committees (if any) and including the names of the persons undertaking the controlled functions;
        (k) A copy of the licensee's professional indemnity insurance policy or confirmation that a deposit to an amount specified by the CBB has been placed in an escrow account with a retail bank licensed in the Kingdom of Bahrain;
        (l) A bank guarantee of BD100,000 for payment service providers issuing any multi-purpose, electronic or otherwise, pre-paid cards, instead of the bank guarantee amount required under Paragraph AU-4.1.12. Such bank guarantee must be in the format approved by the CBB;
        (m) Proof that the PSP has set up the clients' money account as required under Paragraph AU-1.2.8;
        (n) A copy of the applicant's notarised memorandum and articles of association, addressing the matters described in Paragraph AU-4.1.6; and
        o) Other information as may be specified by the CBB.
        Amended: January 2019
        Amended: October 2017
        Amended: April 2017
        April 2016

      • AU-4.1.17

        Applicants issued new licenses by the CBB must start operations within 6 months of the license being issued, as per Article 48 (c) of the CBB Law. Failure to comply with this rule may lead to enforcement action being taken against the licensee concerned, as specified in Article 128 of the CBB Law. A licensee must at all times keep an approved copy of the license displayed in a visible place on the licensee's premises in the Kingdom, as per Article 47 (b) of the CBB Law.

        April 2016

      • AU-4.1.18

        Applicants may not publicise in any way the application for a licence for, or formation of, an ancillary service provider before the formal decision referred to in Paragraph AU-4.1.11 is provided to the applicant or the concerned agent.

        April 2016