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  • CIU-A CIU-A Introduction

    • CIU-A.1 CIU-A.1 Purpose

      • Executive Summary

        • CIU-A.1.1

          Module CIU (Collective Investment Undertakings) sets out the Central Bank of Bahrain's regulatory framework governing collective investment undertakings ('CIUs'). The Module sets out requirements relevant to all CIUs that are domiciled in the Kingdom of Bahrain ('Bahrain domiciled CIUs'). It also prescribes requirements relating to CIUs that are domiciled in an overseas jurisdiction ('overseas domiciled CIUs') and offered to investors in the Kingdom of Bahrain.

        • CIU-A.1.2

          In summary, CIUs are defined in Section CIU-B.3 as undertakings the sole object of which is the collective investment of capital raised from the public and which operates on the basis of risk-spreading; and the holdings of which are re-purchased or redeemed out of those undertakings' assets. The definition of CIUs further specifies the various legal forms that a CIU may take.

        • CIU-A.1.3

          The definition of CIUs includes closed-ended funds as well as open-ended funds, and includes funds formed under statute (as investment companies), as well as contract law and trust law (respectively, as common funds and as unit trusts).

        • CIU-A.1.4

          Module CIU distinguishes between CIUs that are classed as retail CIUs, which may be offered to all types of investors, and expert CIUs, which may only be offered to expert investors (as defined in this Module). Retail CIUs are subject to more restrictive investment rules, aimed at protecting the general retail investor.

        • CIU-A.1.5

          Module CIU also defines a category of exempt CIU. CIUs that fall under this category are mostly exempt from the requirements contained in this Module; however, they may only be offered to a very restricted investor base ('accredited investors').

        • CIU-A.1.6

          Bahrain domiciled retail CIUs and Bahrain domiciled expert CIUs must be authorised by the CBB prior to being offered to investors (whether resident in the Kingdom of Bahrain or outside). Bahrain domiciled exempt CIUs need only register with the CBB before being offered to investors.

        • CIU-A.1.7

          Overseas domiciled retail CIUs and overseas domiciled expert CIUs also require CBB authorisation before being offered to investors in the Kingdom of Bahrain. However, those CIUs domiciled in a recognised jurisdiction are only required to register with the CBB, rather than seek authorisation, on the basis that they have already been adequately vetted in their home jurisdiction. Overseas domiciled exempt CIUs are only required to register with the CBB, regardless of their home jurisdiction.

        • CIU-A.1.8

          Module CIU replaces previous circulars and other regulatory instruments relating to CIUs, issued over a number of years (see Rule CIU-A.2.3). It updates these previous requirements, which were effectively geared towards the retail investor, and provides for a greater range of CIUs to be offered, through its provisions regarding expert CIUs and exempt CIUs.

      • Legal Basis

        • CIU-A.1.9

          Module CIU constitutes the CBB's Directive relating to CIUs, and is issued under the powers available to the CBB under Article 38 of the Central Bank of Bahrain and Financial Institutions Law 2006 ('CBB Law'). Module CIU is applicable to all CBB licensees that are relevant persons, as defined in Section CIU-B.2.

        • CIU-A.1.10

          The contents of this Module are also included in Regulations, to be issued by the CBB, by virtue of which they are applicable to all those who are relevant persons but are not CBB licensees.

        • CIU-A.1.11

          Thus, persons that are not CBB licensees (because they are not undertaking regulated services within Bahrain), yet are still relevant persons (because their activities relate to a CIU falling within the scope of this Module), are also subject to the requirements of this Module, with respect to the CIU(s) concerned.

        • CIU-A.1.12

          For an explanation of the CBB's rule-making powers and different regulatory instruments, see Section UG-1.1.

    • CIU-A.2 CIU-A.2 Module History

      • Evolution of Module

        • CIU-A.2.1

          This Module was first issued with an April 2007 date, as part of the initial release of the contents of Volume 6 (Capital Markets); it was given an effective date of 1 June 2007, with a one-year transition for existing CIUs (see Chapter CIU-7). Any material changes that have subsequently been made to this Module are annotated with the calendar quarter date in which the change was made. Chapter UG-3 provides further details on Rulebook maintenance and version control.

        • CIU-A.2.2

          A list of recent changes made to this Module is provided below:

          Module Ref. Change Date Description of Changes
          CIU-B.5 July 2007 Amendment of definition of expert and accredited investors who are individuals, to focus on financial assets held (the same as for companies etc).
          CIU-2.1 July 2007 Amendment of Paragraph CIU-2.1.4 to reflect above.
          CIU-3.1 July 2007 Addition to Rule CIU-3.1.1 to restrict promotion by Bahrain domiciled exempt CIUs. Amendment of Paragraph CIU-3.1.4 to reflect changes to CIU-B.5 above.
          CIU-4.2 July 2007 Corrections in Paragraphs CIU-4.2.7 and CIU-4.2.10; amendment of Paragraph CIU-4.2.5 to reflect changes to CIU-B.5 above.
          CIU-5.2 July 2007 Amendment of Sub-paragraph CIU-5.1.2(b).
          CIU-7.1 July 2007 Expansion of Rule CIU-7.1.3 regarding first reporting date.

      • Superseded requirements

        • CIU-A.2.3

          This Module supersedes the following circulars or other regulatory instruments:

          Circular/ other references Provision Subject
          Regulation with respect to the General supervision, Operation and Marketing of Collective Investment CIUs. BMA Circular No. OG/356/92 dated 18th November, 1992. Collective Investment Undertakings.
          Principles of Supervision, Operations and Marketing with respect to Collective Investment CIUs. BMA Circular No. OG/318/95 dated 4th November, 1995. Collective Investment Undertakings.
          Collective investment CIUs (Amendment to item I.B of the regulation). BMA Circular No. OG/121/99 dated 19th April, 1999. Collective Investment Undertakings.
          Guidelines on Advertising and Public Announcements for Collective Investment CIUs. BMA Circular No. BC/23/99 dated 27th October, 1999. Collective Investment Undertakings.
          Quarterly information Returns for Collective Investment CIUs. BMA Circular No. BC/13/2001 dated 9th December, 2001. Collective Investment Undertakings.
          Information to be Contained in the CIU Particulars Document. BMA Circular No. BC/05/2002 dated 1st June, 2002. Collective Investment Undertakings.