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  • Lending

    • CIU-1.7.3

      A Bahrain domiciled retail CIU may not lend its assets, except as otherwise provided for in Rule CIU-1.7.5 (in relation to stock lending) or for the purposes of meeting margin requirements where the CIU is using financial derivatives.

    • CIU-1.7.4

      For the purpose of Rule CIU-1.7.3, the placing of money on short-term deposit (i.e. for a term of less than one year) or in a current account is not considered lending.

    • CIU-1.7.5

      A Bahrain domiciled retail CIU may only enter into stock lending arrangements (including repurchase arrangements) in respect of any securities held by it, provided that:

      (a) The counterparty is a licensed financial institution;
      (b) The arrangement is consistent with good market practice;
      (c) Acceptable collateral with a value equal to the securities lent is obtained to secure the obligation;
      (d) The aggregate value of stocks lent does not at any time exceed 20% of the net asset value of the CIU's assets; and
      (e) The circumstances and applicable conditions for such borrowings are disclosed in its prospectus.