OFS-A.1.1

Module OFS formulates the regulatory framework of the Central Bank of Bahrain ('CBB') to govern the issuing and offering of securities in/from the Kingdom of Bahrain. It incorporates the requirements of Articles 80-85, 96 and 166 of the CBB Law. These regulations are issued pursuant to the authority of CBB under Article 37 to establish and enforce rules, while meeting the specific requirements of Part 4 of the Central Bank of Bahrain and Financial Institutions Law of 2006 ('CBB Law').

OFS-A.1.2

This Module contains the CBB's Directive (as amended from time to time) relating to the issuing and offering of securities and is issued under the powers available to the CBB under Article 38 of the CBB Law, together with the abovementioned provisions of the CBB Law. The Directive in this Module is applicable to all market participants and relevant persons, including but not limited to issuers of securities or any person acting on their behalf, licensed exchanges, licensed market operators, licensed clearing houses, depositories, market intermediaries, business trusts, listed companies, any person acting for or on behalf of listed companies, shareholders of listed companies, securities ownership transfer agents, lead managers, underwriters, professional advisors, listing agents, auditors, financial analysts and any other person who engages or encourages others to engage in any acts of commission or omission covered by the scope of this Module, irrespective of whether such person is a market participant or not. OFS-A.2.3

This Module should be read in conjunction with Resolution No.(16) of 2013 with respect to Financial Services Marketed in the Kingdom of Bahrain and Resolution No (1) of 2007 (as amended from time to time) with respect to determining fees categories due for licensees and services provided by the CBB.

OFS-A.2.1

A clear division of responsibilities between the CBB as the securities regulator, the issuer of securities and the licensed exchanges or the licensed market operators as a self-regulatory organisation (SRO) is required:

OFS-A.2.2

As a regulator, the CBB's role is as follows:

OFS-A.2.3

The licensed exchange or the licensed market operator established as an SRO must comply with the requirements laid down under the CBB Law, this Module and other applicable laws and regulations.

OFS-A.2.4

As an SRO, the main objective of the exchange or the operator would be to:

OFS-A.2.5

The issuer of securities in/from Bahrain or any person acting on its behalf must comply with the requirements laid down under the CBB Law, this Module and the other applicable laws, rules and regulations.

OFS-A.2.6

The main responsibility for the issuer of securities or any other person acting on its behalf is to:

OFS-A.3.1

This Module was first issued in January 2014 by the CBB. Any material changes that are subsequently made to this Module are annotated with the calendar quarter date in which the change is made; Chapter UG-3 provides further details on Rulebook maintenance and version control.

OFS-A.3.2

The most recent changes made to this Module are detailed in the table below:

OFS-A.3.3

This Module supersedes the following provisions contained in circulars or other regulatory instruments:

OFS-1.4.3

Where structured products are offered outside but marketed inside the Kingdom of Bahrain, the following must be adhered to by the issuer and any advisor or agent acting on behalf of the issuer, in addition to the general requirements for exempt offers laid out below:

OFS-1.4.4

The offering document of any securities to be offered exclusively outside Bahrain, and marketed through a roadshow, must contain the following prominent statement under the heading "Important Notice", of the prospectus (or such other offering documents) of such offer:

"In relation to investors in the Kingdom of Bahrain, securities issued in connection with this prospectus and related offering documents must be in registered form and must only be marketed to existing account holders and accredited investors as defined by the CBB in the Kingdom of Bahrain where such investors make a minimum investment of at least US$ 100,000, or any equivalent amount in other currency or such other amount as the CBB may determine.

This offer does not constitute an offer of securities in the Kingdom of Bahrain in terms of Article (81) of the Central Bank and Financial Institutions Law 2006 (decree Law No. 64 of 2006). This prospectus and related offering documents have not been and will not be registered as a prospectus with the Central Bank of Bahrain (CBB). Accordingly, no securities may be offered, sold or made the subject of an invitation for subscription or purchase nor will this prospectus or any other related document or material be used in connection with any offer, sale or invitation to subscribe or purchase securities, whether directly or indirectly, to persons in the Kingdom of Bahrain, other than as marketing to accredited investors for an offer outside Bahrain.

The CBB has not reviewed, approved or registered the prospectus or related offering documents and it has not in any way considered the merits of the securities to be marketed for investment, whether in or outside the Kingdom of Bahrain. Therefore, the CBB assumes no responsibility for the accuracy and completeness of the statements and information contained in this document and expressly disclaims any liability whatsoever for any loss howsoever arising from reliance upon the whole or any part of the content of this document.

No offer of securities will be made to the public in the Kingdom of Bahrain and this prospectus must be read by the addressee only and must not be issued, passed to, or made available to the public generally."

OFS-1.4.5

Any offering document for marketing and/or a foreign private placement that does not include the statement, in Paragraph OFS-1.4.4 may not be circulated or used in the Kingdom of Bahrain.

OFS-1.4.6

Where an offer of securities is not being made in or from the Kingdom of Bahrain, but such offer is to be marketed in Bahrain as part of a roadshow, the issuer and or his advisor or marketing agent is required to provide prior notification to the CBB of such roadshow and to file a copy of the prospectus with the Capital Markets Supervision Directorate (CMSD).

OFS-1.4.7

The offering document for any securities not to be offered in or from Bahrain but to be marketed in Bahrain as part of a roadshow, must contain the following prominent statement on the cover page of the offering document:

"A copy of this prospectus has been submitted and filed with the Central Bank of Bahrain. Filing of this prospectus with the Central Bank of Bahrain does not imply that any Bahraini legal or regulatory requirements have been complied with. The Central Bank of Bahrain has not in any way considered the merits of the Securities to be offered for investment whether in or outside of the Kingdom of Bahrain.

Neither the Central Bank of Bahrain nor the licensed exchange assumes responsibility for the accuracy and completeness of the statements and information contained in this prospectus and each expressly disclaims any liability whatsoever for any loss howsoever arising from reliance upon the whole or any part of the contents of this prospectus.

The Issuer together with any local agent or adviser accepts responsibility for the information contained in this prospectus. To the best of the knowledge of the Issuer (having taken all reasonable care to ensure that such is the case) the information contained in this prospectus is in accordance with the facts and does not omit anything likely to affect the import of such information."

OFS-1.6.1

Issuers of equity securities to the public must meet the following additional eligibility criteria in order to obtain approval from the CBB:

OFS-1.6.2

With respect to Subparagraph OFS-1.6.1(c), the CBB reserves its right to amend such percentage in accordance with the type and size of the issue.

OFS-1.6.3

With respect to Subparagraph OFS-1.6.1(e), the CBB may exempt any issue from the underwriting requirements where the offering price is equal to or below the average market price for the last six months, or where it is issued at the flat par value.

OFS-1.6.4

The ownership of equity securities of the issuer must not be restricted otherwise than in accordance with the issuer's Memorandum and Articles of Association, or the applicable laws, rules and regulations.

OFS-1.6.5

The founders of the issuer must confirm and submit bank certificates to the CBB that their contribution in the share capital of the issuer is paid before the CBB grants its approval to issue its securities to the public.

OFS-1.6.6

The issuer's preliminary contract must include the details as specified in this Module.

OFS-1.6.7

Any newly established issuer must submit to the CBB a duly signed and irrevocable agreement entered into between financial institutions or other third party in respect of procuring partial finance of an issuer's project if such project is required to be financed by the total proceeds of the issue together with such finance.

OFS-1.6.8

For listed or existing issuers, the issuance and offering of additional and/or new equity securities must obtain the approval of the General Assembly of its shareholders, in accordance with the issuer's Memorandum and Articles of Association or such other applicable laws, rules and regulations.

OFS-1.6.9

The CBB may reject the registration and issuance of any securities if it is found that the issuance thereof might cause damage, dilute or be contrary to the interests of the owners or holders of the issuer's securities or public investors in general.

OFS-1.6.10

The CBB may refuse to grant its approval, postpone granting such approval, or fix the timeframe for the offering period, if the CBB deems that the market condition or circumstances justifies such action.

OFS-1.6.11

The CBB will decide on the application within sixty calendar days from the date of its submission. Any rejection by the CBB will contain reasons for the decision. The applicant whose application has been rejected has the right to be heard by the CBB within thirty days from the date of notifying it of the rejection of its application. The CBB's decision is final.

OFS-1.6.12

The founders do not have the right to re-apply for the issuance of securities before addressing the reasons for the rejection or the lapse of six months from the date of the CBB's rejection decision.

OFS-1.11.1

Where the issuer directly issues warrants, he must satisfy the requirements relating to the underlying securities in accordance with this Module.

OFS-1.11.2

Structured warrants or such similar instruments must be issued by a third-party issuer which is:

OFS-1.11.3

Structured warrants and other similar instruments may only be issued in relation to:

OFS-1.11.4

At least 50% of an issue must be placed out to a minimum of 50 persons. This requirement does not apply if there is a designated market maker for the structured warrants or other instruments.

OFS-1.11.5

The minimum board lot size, the issue size, issue price and any other details for structured warrants based on listed or quoted securities are subject to the licensed exchange business rules.

OFS-1.11.6

The tenure of the structured warrant must not exceed three years from the date of issue, or such longer time as the CBB may allow.

OFS-1.11.7

On exercise, structured warrants must cash settled unless the CBB has approved physical settlement where the underlying securities are cash or cash equivalent securities. The settlement method must be specified in the offering document. The issuer thereafter must not have an option to elect for settlement either in shares or cash upon exercise of the structured warrants.

OFS-1.11.8

An issuer must decide on the method for determining the cash settlement price at the time of the launch of an issue, and this must be stipulated in the offering document and or term sheet. The settlement price must be either:

OFS-1.11.9

For the exercise of structured warrants based on individual securities, the conversion ratio must avoid using fractions of securities.

OFS-1.11.11

The terms of the issue must provide for adjustment to the exercise price and, where appropriate, the number of securities which each structured warrant carries the right to sell or purchase, in the event of any capitalisation issue, rights issue, distribution or the like relating to the underlying securities.

OFS-1.11.12

If there is a designated market maker in respect of the issue, the CBB together with the licensed exchange must be satisfied that the designated market maker's obligations are being fulfilled.

OFS-1.11.13

Necessary arrangements must be made for the underlying securities to be held by a trustee or custodian to meet the exercise of all obligations of the outstanding warrants.

OFS-1.11.14

Where the warrants relate to securities issued by a third party, the declaration by the issuer should take the following form:

"Subject as set out below, the issuer whose name appears on page [the issuer's Board of Directors and management] accepts responsibility for the information contained in this document. To the best of the knowledge and belief of the issuer (who has taken all reasonable care to ensure that such is the case) the information contained in this document is in accordance with the facts and does not omit anything likely to affect such information.

The information contained herein with regard to [name of issuer of underlying securities], its subsidiary undertakings and the [description of underlying securities], consists of extracts from or summaries of information contained in financial and other information released publicly by [name of issuer of underlying securities] and summaries of certain provisions of [jurisdiction of issuer of underlying securities] law. The issuer accepts responsibility for accurately reproducing such extracts or summaries. The issuer accepts no further or other responsibility in respect of such information."

OFS-1.11.15

In the case of warrants related to anything other than securities, the declaration in Paragraph OFS-1.11.14 should be appropriately modified.

OFS-1.11.16

Where the issue of warrants is guaranteed, the information requirements which apply to the issuer must also be applied to the guarantor, depending on whether the guarantor is listed or is the guarantor of other listed securities.

OFS-1.11.17

The equivalent offering document must include details of conditions of and procedures for exchange, exercise or cash settlement and details of the situations in which they may be amended, including any provisions for the adjustment of the terms of the warrants.

OFS-2.3.2

Issuers of securities in a public offering must confirm to the CBB before the registration of the offering document that it is able to comply with the CBB Law, rules and regulations, as well as with all other applicable laws, rules and regulations.

OFS-2.3.3

The issuer must meet the following requirements in order for a public offer to be approved by the CBB:

OFS-2.3.4

The issuer must appoint a lead manager for any public offer.

OFS-2.3.5

An issuer in an initial public offering of equity securities must ensure that the issue is underwritten, unless an exception is made by the CBB, in accordance with Paragraph OFS-2.3.6.

OFS-2.3.6

The CBB may approve an issue without an underwriter where:

OFS-2.3.7

Where the issue is to be underwritten, full details of the underwriter and the underwriting arrangement must be disclosed in the prospectus and the full underwriting agreement as signed by the parties must be made available for inspection by the subscribers.

OFS-2.3.8

Where the issue is not to be underwritten, the CBB retains its right to impose full or partial underwriting based upon pricing of the securities to be issued and market conditions.

OFS-2.3.9

Where the issue is underwritten the:

OFS-2.3.10

Details of underwriting agreements must be disclosed in the offering document and the agreement must be capable of being enforced under any circumstance.

OFS-2.3.11

In respect of public offers of debt securities, where the issue is to be underwritten or sold through primary dealer arrangements, full details of the underwriter, primary dealer, the underwriting arrangement and/or primary dealer arrangements must be disclosed in the prospectus and the underwriting agreement must made available for inspection by the subscribers.

OFS-2.3.12

The preliminary/red herring prospectus containing all the information except the information regarding the price at which the securities are offered, must be filed with the CBB prior to it being used in any manner by the issuer or its advisors.

OFS-2.3.13

The lead manager and/or the underwriter to the issue must be nominated by the issuer as a book runner and his name must be disclosed in the prospectus.

OFS-2.3.14

The preliminary/red herring prospectus to be circulated may indicate the price band within which the securities are being offered for subscription.

OFS-2.3.15

The book runner, on receipt of the offers must maintain a record of the names and number of securities ordered and the price at which the investors are willing to subscribe to securities under the placement portion.

OFS-2.3.16

On receipt of the information, the book runner and the issuer must determine the price at which the securities are to be offered to the public.

OFS-2.3.17

The book runner and other appointed advisors associated with the book building process must maintain records of the book building process and the CBB has the right to inspect and obtain a copy of such records.

OFS-2.3.18

Details of the outcome of the book building process must be disclosed in the prospectus or offer document and must include information such as the general range of the prices at which the institutional investors are willing to subscribe to under the placement portion, the total number of securities ordered and the total number of institutions involved. The CBB shall have the right to require the disclosure of any other additional information if it deems necessary.

OFS-2.3.19

The issuer, lead manager and/or underwriter must consider the outcome of the book building process and/or any other processes or arrangements employed, when establishing the final offer price at which the securities are to be offered to the public. A statement to the effect must be duly disclosed in the prospectus.

OFS-2.6.7A

[This Paragraph was deleted in July 2018].

OFS-3.1.2

For the purpose of this Module, in addition to any other designation by the CBB, a Capital Market Advisory Services Provider may be classified as follows:

OFS-3.2.1

The appointed advisor must be either incorporated in the Kingdom of Bahrain and licensed by the CBB or authorised to provide this service by the CBB.

OFS-3.2.2

The Memorandum and Articles of Association and/or the by-laws of the advisor must allow it to provide such service.

OFS-3.2.3

Where applicable, the appointed advisor must be incorporated in, be a member, associate or registered with the relevant local, and/or international professional body of a jurisdiction which is a signatory to the IOSCO MMoU.

OFS-3.2.4

In addition to incorporation and licensing, the CBB will review the ability of the advisor to provide the service. The CBB will consider the following in such determination:

Moreover, advisors' fees and charges should be fixed reasonably in order to ensure that the costs associated with raising capital or initial public offerings are competitive.

OFS-3.2.5

All persons proposed to undertake any of the controlled functions must be subject to the provisions and requirements related to these functions, particularly in respect of anti-money laundering and financial crime, the compliance function and any person directly involved in the preparation of the prospectus or offering documents.

OFS-3.2.6

All persons proposed to undertake any controlled functions and any other persons recruited or employed by the capital market advisory service provider must meet the relevant examination and qualification requirements of the CBB, including qualifications such as the Securities Market Regulation Certification Programme (Series 7), the General Securities Representative Qualification (Series 79), and/or any other relevant examinations and qualifications recognised by the CBB that are appropriate to capital market functions, as the case may be. However the CBB reserves the right to impose a higher level of qualifications as it deems necessary.

OFS-3.2.7

Capital market advisory services providers must maintain and keep records of agreements, contracts, correspondence and other information to demonstrate their compliance with the requirements of this Module. These records must be kept for at least 10 years.

OFS-3.2.8

Any appointment of an advisor must be made in the form of a written agreement, contract and/or official letter issued by the issuer or lead manager as applicable.

OFS-3.2.9

The acceptance of the appointment by the advisor must be made in the form of an official written confirmation.

OFS-3.2.10

The name of the appointed advisors must be prominently disclosed in the offering document and in all advertising materials.

OFS-3.2.11

A person appointed to act as an appointed advisor shall not cease to act as such until another has taken office with CBB approval.

OFS-3.2.12

An issuer must notify the CBB in writing immediately of the appointment or dismissal or replacement of an advisor that had been appointed. In the case of a dismissal, the reasons for dismissal must be provided.

OFS-3.2.13

Where a prospectus or offering document includes a statement purporting to be made by, or based on a statement made by an expert, the prospectus or offering document must not be issued unless:

OFS-3.2.14

The appointed advisor must provide a statement regarding its due diligence with regard to its appointed responsibility and this statement must be included in the prospectus or offering document.

OFS-3.2.15

The appointed advisor must disclose in the prospectus and/or offering documents, whether it has any capital of the issuer under option, or agreed conditionally or unconditionally to be put under option, including:

OFS-3.2.16

Where options have been granted, or agreed to be granted to all the holders of shares or debt securities, or of any class thereof, or to any appointed advisor, or to employees under the employees' share benefit plan, a general disclosure of such fact may be made.

OFS-3.2.17

The information provided in Rule OFS-3.2.15 must also be disclosed where there is authorised but unissued capital, or an undertaking to increase the capital in connection with warrants, convertible obligations or other outstanding equity-linked securities, or subscription rights granted or to be granted to any appointed advisor. Such information must indicate:

OFS-3.2.18

In regard to the implementation of the granting of capital in Paragraphs OFS-3.2.15 and OFS-3.2.17:

OFS-3.2.19

An appointed advisor must be independent of the issuer. An appointed advisor will not be considered independent by the CBB if:

OFS-3.2.20

When an appointed advisor undertakes business other than the capital market advisory services, or undertakes two or more of the capital market advisory services, the appointed advisor must ensure that the performance of such business is subject to the avoidance of any conflict of interest.

OFS-3.2.21

Appointed advisors are subject to confidentiality requirements which must be explicitly stated in the respective agreements, contracts and/or letters.

OFS-3.2.22

All advisors must abide by the rules relating to the Prohibition of Market Abuse and Manipulation contained in Module MAM of Volume 6 CBB Rulebook, as well as the relevant rules of the licensed exchange regarding the prevention of insider trading, in their capacity as a temporary insider.

OFS-3.2.23

An appointed advisor is responsible, in addition to the reporting and disclosure requirements stipulated under this Module, for immediate notification to the CBB of any offence involving money laundering, fraud, theft, or other dishonest conduct related to the offer or listing, irrespective of whether such conduct is reported to the CBB by the issuer and/or the lead manager.

OFS-3.2.24

An appointed advisor is required to provide the CBB with a declaration confirming his acceptance to the accountability and enforceability of the CBB Law, rules and regulations, and all other applicable laws, rules and regulations, and in particular to the CBB Law Articles 82, 84, 85, 106, 166, 167 and 168.

OFS-3.2.25

The CBB shall decide on the eligibility of the appointed advisor(s) on a case by case basis, taking into consideration, the nature and complexity of the offering, as well as, the nature of involvement and commitment of the appointed advisor(s).

OFS-3.3.2

All issuers must engage a CBB licensee to act as a lead manager or to fulfil the obligations of a lead manager as defined in this Section.

OFS-3.3.3

The lead manager is in addition to Paragraph OFS-3.2.24 required by the CBB to act with appropriate care and skill and perform the following:

OFS-3.3.4

For the purposes of Rule OFS-3.3.3, the outstanding underwriting commitments of a lead manager should not exceed reasonable limits including in relation to its capital and capital adequacy requirements.

OFS-3.3.5

The lead manager is expected to also assist the issuer with the appointment of other advisors.

OFS-3.3.6

Where the lead manager is also acting as a listing agent or sponsor in relation to a planned listing, the lead manager is also responsible for:

OFS-3.3.7

The lead manager must inform the CBB where:

OFS-3.3.8

In line with Articles 83 and 178 of the CBB Law and the dematerialisation of securities requirements under Paragraph OFS-1.5.5, issuers and lead managers must put in place appropriate technical infrastructure and other arrangements to encourage subscribers to use e-subscription facilities.

OFS-3.4.7

The independent reporting accountant is required to adhere to the independence and other standards applicable to auditors, in addition to the general eligibility under Section OFS-3.2.

OFS-3.5.2

A Bahrain domiciled trustee must be established and authorised in accordance with the Bahrain Trust Law of 2006. In the case of overseas domiciled trustees, they must be registered in their own jurisdiction and be acceptable to the CBB.

OFS-3.5.3

Every issuer of debt securities must make provision in those debt securities, or in a trust deed relating to those debt securities, for the appointment of a trustee corporation as trustee for the holders of the debt securities within a maximum of one month from the allotment date.

OFS-3.5.4

A trustee corporation must not be appointed, hold office or act as trustee for the holders of debt securities of a borrowing corporation if that trustee corporation is:

OFS-3.5.5

The trustee must be independent of the issuer, or any of the issuer's related party, subsidiaries and/or associates, and must exercise the powers and duties as defined in the Trust Law of 2006 and the trust deed, without interference or guidance from the issuer.

OFS-3.5.6

An issuer may remove a trustee after obtaining CBB approval if he exceeds the limits or is otherwise in contravention of the trust deed, or if he violates the provisions of the Trust Law of 2006.

OFS-3.5.7

Where a corporation or any other entity makes an offer or invitation in respect of debt securities, the debt securities or the relevant trust deed must contain a limitation on the amount that the borrowing corporation may borrow, pursuant to those debt securities or that deed and must contain covenants by the borrowing corporation, or if the debt securities do not or the trust deed does not expressly contain those covenants, they or it are deemed to contain covenants by the borrowing corporation, to the following effect:

OFS-3.5.8

Trust deeds for convertible securities must not include any provisions for:

OFS-3.5.9

Any changes in the terms of convertible securities must be clearly determined and disclosed in the trust deed and offering document/listing document/circular, or any other documents issued in relation to the proposal.

OFS-3.5.10

Once determined, the terms and conditions of the convertible securities may not be altered unless approved by the holders of the securities and the CBB.

OFS-3.5.11

A trustee for the holders of debt securities must not cease to be the trustee until a corporation qualified for appointment as trustee for the holders of debt securities has been appointed and has taken office as such. The holders of the securities and the CBB must be informed immediately of this event.

OFS-3.5.12

Where provision has been made in the debt securities or in the relevant trust deed for the appointment of a successor to a trustee for the holders of the debt securities upon retirement or otherwise, the successor may be appointed in accordance with such provision.

OFS-3.5.13

Where no provision has been made in the debt securities or in the relevant trust deed for the appointment of a successor to a retiring trustee, the borrowing corporation may appoint a successor which is qualified for appointment.

OFS-3.5.14

Notwithstanding anything in any debt securities or trust deed, a borrowing corporation may, with the consent of an existing trustee for the holders of the debt securities, appoint as successor to the existing trustee any corporation which is qualified for such appointment.

OFS-3.5.15

Where the trustee for the holders of the debt securities has ceased to exist or to be qualified, or fails or refuses to act or is disqualified, the court may, on the application of the borrowing corporation or the CBB, appoint any corporation qualified to be the trustee for the holders of the debt securities in place of the trustee which has ceased to exist or to be qualified, which has failed or refused to act as trustee, or which is disqualified.

OFS-3.5.16

Where a successor is appointed to be a trustee in place of any trustee, the successor must immediately after the appointment submit to the holders of the securities and the CBB notice of such appointment.

OFS-3.5.17

A trustee for the holders of debt securities must:

OFS-3.5.18

Where a trustee for the holders of the debt securities after due enquiry, at any time is of the opinion that the assets of the borrowing corporation and of any of its guarantor corporations which are or should be available, whether by way of collateral or security or otherwise, are insufficient, or likely to become insufficient, to discharge the principal debt as and when it becomes due, it must apply to the CBB for an order under Paragraph OFS-3.5.19.

OFS-3.5.19

The CBB, on receiving an application under Paragraph OFS-3.5.18 may:

OFS-3.5.20

Where:

the trustee may apply to the court for an order.

OFS-3.5.21

A trustee for the holders of debt securities may apply to the court:

OFS-3.5.22

Prior to making any application to the CBB or to the court, a trustee must consider the nature and kind of collateral or security given when the offer or invitation in respect of the debt securities was made to the public, and if no security was given must consider the position of the holders of the debt securities as unsecured creditors of the borrowing corporation.

OFS-3.5.23

A trustee may rely upon any certificate or report given or statement made by any legal advisor, auditor or officer of the borrowing corporation or guarantor corporation, if it reasonably believes that such legal advisor, auditor or officer was competent to give or make the certificate, report or statement.

OFS-3.5.24

The directors of the borrowing corporation must:

prepare a report that relates to that period and complies with the requirements of Paragraph OFS-3.5.25, and within one month after the end of each such period submit a report relating to that period to the trustee with a copy being submitted to the CBB.

OFS-3.5.25

The report referred to in Paragraph OFS-3.5.24, must be signed by not less than two of the directors on behalf of all of them and must set out in detail any matters adversely affecting the collateral or security, or the interests of the holders of the debt securities and, without affecting the generality of Paragraph OFS-3.5.24, state:

OFS-3.5.26

The trustee must demand that the borrowing corporation and each of its guarantor corporation(s) which has guaranteed the repayment of the monies raised by the issue of debt securities to:

OFS-3.5.27

Where any such advance referred to in Subparagraph OFS-3.5.26(b) is merged in a current account with bankers or trade creditors, it shall be sufficient for particulars of the net amount outstanding in respect of any such advance to be furnished every 3 months.

OFS-3.5.28

The trustees must submit to the CBB a report addressing the requirements stipulated under Paragraph OFS-3.5.17 on a regular basis but not later than each occurrence of the payment of periodic interest or income or when the trustee deems necessary to keep the CBB informed about the compliance with those requirements.

OFS-3.5.29

The directors of every borrowing corporation and of every guarantor corporation must cause to be made out and submitted to the CBB and trustee:

OFS-3.5.30

Where:

the trustee must immediately notify the CBB of this fact.

OFS-3.5.31

For the purpose of the preparation of a report that, by this Module, is required to be signed by or on behalf of the directors, or persons approved by the CBB of a borrowing corporation or any of them, that borrowing corporation may, by notice in writing, require any of its guarantor corporations to furnish it with any information relating to that guarantor corporation which is, by this Module, required to be contained in that report.

OFS-3.5.32

The guarantor corporation must furnish the borrowing corporation with that information required under Paragraph OFS-3.5.31 before the specified date, being a date not earlier than one month after the notice is given.

OFS-3.6.1

Any person acting as an underwriter to any offering, must be licensed or otherwise authorised by the CBB to undertake such activity.

OFS-3.6.2

For the purpose of this Module, the definition, role and requirements related to the underwriter also apply to co-underwriters.

OFS-3.6.3

The CBB may investigate the financial suitability of a proposed underwriter and may reject the appointment of the underwriter and/or the application for offering if it is not satisfied as to the underwriter's ability to meet its commitment under the proposed underwriting agreement and its potential impact in its capital adequacy.

OFS-3.6.4

Where an underwriter has been appointed and the securities are not fully subscribed during the offering period, the underwriter must purchase the balance of the securities through a firm commitment underwriting arrangement.

OFS-3.6.5

The firm commitment underwriting arrangement must be detailed in an underwriting agreement, which must be submitted to the CBB as part of the offering of securities application.

OFS-3.6.6

For the purpose of this Module, the total of all the underwriting undertakings of the underwriter, the company that controls it, its subsidiary, a subsidiary of the company that controls it and a company affiliated with it, are calculated as one underwriting undertaking.

OFS-3.6.7

The underwriter may appoint or form an underwriting group for any underwritten issue.

OFS-3.6.8

The underwriter must comply with the CBB Law, rules and regulations, including Volume 6 of the CBB Rulebook, and the issuer's Memorandum and Articles of Association, particularly in respect of the eligibility of the expected subscribers to acquire the issuer's securities and related disclosure requirements.

OFS-3.6.9

After the approval of the offering documents (including the underwriting agreement) neither the issuer nor any advisor or person acting on its behalf, nor the underwriter or any person acting on its behalf, has the right to change any provision or commitments stipulated in the underwriting agreement.

OFS-3.6.10

All commitments, terms and conditions stipulated in the underwriting agreement must be enforced and implemented without any change or alterations, including the relevant timeframes.

OFS-3.6.11

The CBB may consider amendments to an underwriting agreement where the stability of the financial sector and/or capital market will be adversely affected by the agreement's current provisions. In this regard, the CBB must be provided with a supporting application signed by both the issuer and the underwriter, before considering such amendment.

OFS-3.6.12

A firm commitment underwriting arrangement is required for all public offerings. However, the CBB may accept other underwriting arrangements other than firm commitment underwriting, in the following cases:

OFS-3.6.13

A firm commitment underwriting arrangement may also be done through a bought-out deal wherein the underwritten issue is bought entirely by the underwriter to resell to investors.

OFS-3.6.14

In case of issues which are exempted from firm commitment underwriting arrangements (non-public offers), the CBB may accept partial underwriting commitment arrangements, or best-efforts underwriting.

OFS-3.6.15

The name of the underwriter and the terms of the underwriting agreement must be prominently disclosed in the offering document and in the application for approval.

OFS-3.6.16

A summary of the underwriting agreement or arrangements must be provided in the prospectus or offering document, including but not limited to the cost of underwriting and other related fees and charges.

OFS-3.6.17

The underwriter is required to provide sufficient and adequate information to the CBB and disclose the same in the prospectus or offering documents as to the method, bases, mechanism, assumptions, and all other related information used to reach the offering price.

OFS-3.6.18

In cases where the offering price is determined by the underwriter jointly with any other advisor or third party, the name and role of such advisor or person must be provided to the CBB and disclosed in the prospectus or offering document.

OFS-3.6.19

The underwriting agreement must be provided as a document available for inspection to the subscriber.

OFS-3.6.20

For purposes of Paragraph OFS-3.6.17 and item 25.1(b) under Section 17 of Appendix OFS-1, relating to the pricing of securities and bases or methods for determining the issue or offer price and for prospectus disclosure purposes, the bases used for determining the pricing of securities must be elaborated on and general statements must be avoided.

OFS-3.6.21

For purposes of Paragraph OFS-3.6.20, factors that are commonly cited in pricing determination which should be elaborated may include, but are not limited to, prevailing market performance and condition (e.g. price earnings ratio, dividend yield, etc.), financial and operating performance (e.g. earnings per share, etc.), consolidated net tangible assets per share and/or net assets per share (or liabilities as to the case may be), earnings potential, assessment of management, market valuation of companies in related businesses, intellectual property and technology, etc. Where appropriate, cross-references should be made to the relevant and specific sections of the prospectus.

OFS-4.2.2

The declaration by the lead manager (Appendix OFS-8) required under Paragraph OFS-4.2.1 must consider and contain the following:

OFS-4.2.3

The CBB will notify an applicant of its decision in writing within 15 business days of the receipt of the offering of securities application, complete in all respects and complying with the provisions of this Module. If permission is granted, it may be conditional or unconditional.

OFS-4.2.4

The CBB may refuse an application on any ground, including but not limited to the following conditions:

OFS-4.2.5

A notification under Paragraph OFS-4.2.4 will set out:

OFS-4.2.6

The applicant is allowed to make representation to the CBB within 30 calendar days of the receipt of a notification under Paragraph OFS-4.2.5. The applicant can undertake this through the lead manager to clarify any grounds set out in the notification. The CBB will consider any such representations before issuing a final decision.

OFS-4.2.7

The CBB will make a decision which is final within 30 calendar days of receiving the representation under Paragraph OFS-4.2.6.

OFS-4.3.2

For public offerings, the following additional requirements and documentation are required:

OFS-4.3.3

An application to the CBB for a rights issue by a listed issuer need not contain the following:

OFS-4.3.4

An application for private placement of any securities must include the following additional information and documents:

OFS-4.3.5

An application for employees stock option plan proposed by a listed issuer is subject to requirements under Subparagraphs OFS-4.2.1(a) and (b).

OFS-4.3.6

If the capitalisation issue is made in the form of a rights issue, then the same requirements stipulated under Section OFS-4.2 as well as Paragraphs OFS-4.3.2 and OFS-4.3.3 will apply.

OFS-4.3.7

If the capitalisation issue is made in the form of a stock dividend for free it is only subject to the requirements under Subparagraphs OFS-4.2.1(a) and (b).

OFS-4.3.8

An application for a consideration issue by a listed issuer, or listing applicant through which an issue of securities as a consideration other than cash in a transaction, or in connection with a take-over or merger or the division of an issuer is subject to the Take-over, Mergers Acquisitions and Share Repurchases (TMA) Module.

OFS-4.3.9

An application for the swapping, exchange or substitution of listed securities must be made as an application for listing, rather than as an offering of securities.

OFS-4.3.10

An application for the listing of publicly traded securities must be dealt with either as an initial public offering, or an initial offer for sale of securities, as mentioned above.

OFS-4.3.11

For any state owned entity, or government owned company planning to issue shares to the public, it must either be made as a public offering, or initial offer for sale of securities, as the case may be, and is subject to the abovementioned requirements provided for public offering as per Paragraph OFS-4.3.2 unless otherwise exempted by the CBB under Section OFS-1.13.

OFS-4.3.12

The following additional information and documents must be provided with an application for the offering of debt securities:

OFS-4.3.13

Where appropriate, a copy of the custodial or trusteeship agreement for the underlying securities must be provided with the application for the offering of warrants and other certificates.

OFS-4.3.14

The following additional information and documents must be provided with the application for the offering of Shari'a compliant securities:

OFS-4.3.15

The following additional information and documents must be provided with an application for the offering of assets-backed and mortgage-backed securities:

OFS-4.3.16

The following additional information, documents (to be provided with the application) are required for an offering of securities by overseas issuers:

OFS-4.3.17

The CBB may grant exemptions to any overseas issuer's application, depending upon the type of offer and type of securities on a case-by-case basis.

OFS-4.3.18

The CBB may impose additional requirements in respect of the offer of securities by way of a guaranteed issue.

OFS-4.3.19

The CBB (in conjunction with the licensed exchange where relevant) may exempt start-up or small and medium size companies from parts of this Module, as it deems appropriate.

OFS-4.4.4

After a period of 21 days from the date the draft offering document is made public, the lead manager must file a statement with the CBB giving a list of complaints received, a statement whether it proposes to amend the draft offering document or not, and highlight those amendments.

OFS-5.1.3

The issuer must disclose any information that would be material to an investor's investment decision.

OFS-5.1.4

In addition to the information prescribed under this Module, a prospectus must include all such information within the knowledge of those preparing the prospectus so that investors may make an informed assessment.

OFS-5.1.5

It is the responsibility of each issuer and lead manager to determine the material information:

OFS-5.1.6

For the purpose of Paragraph OFS-5.1.5, material information consists of both material facts and material changes related to the business and affairs of the issuer, taking into account qualitative and quantitative facts, developments and events capable of influencing the offering or market price or value of issued securities.

OFS-5.1.7

If a disclosure requirement is not applicable to an issuer's sphere of activity or legal form, no information need be provided in response to that requirement, although equivalent information must be given.

OFS-5.1.8

For purposes of Paragraph OFS-5.1.7, the CBB may authorise the omission of information from the prospectus if it considers that:

OFS-5.1.9

To be granted the right to omit information as noted in Paragraph OFS-5.1.8, the issuer must obtain the CBB's authorisation by explaining in writing to the CBB the reasons for not making information public.

OFS-5.1.10

A supplementary or replacement prospectus is a prospectus that has the same wording as the original prospectus, except for the provision of new or additional information, or the correction of deficiencies in the original prospectus.

OFS-5.1.11

A supplementary or replacement prospectus must be submitted to the CBB as soon as practicable if, during the validity period of a prospectus, the issuer becomes aware that the prospectus is deficient or outdated in that:

OFS-5.1.12

The supplementary and/or replacement prospectus must be approved by the CBB and published in summary form in accordance with Article 81(b) of the CBB Law.

OFS-5.1.13

The supplementary or replacement prospectus may be used to correct, update or add to the original prospectus at any time before the date of the CBB approval and/or start of the offering period.

OFS-5.1.14

All supplementary or replacement prospectuses must contain the following:

OFS-5.1.15

All supplementary and/or replacement prospectuses must clearly indicate the changes and revisions made.

OFS-5.1.16

For purposes of Paragraph OFS-5.1.15, such changes must be made clear in all copies provided to the CBB and the investing public.

OFS-5.1.17

Application for approval for any changes to the prospectus must be accompanied by the following:

OFS-5.1.18

For public offers, the issuer must inform the public of the changes and make the supplementary and/or replacement prospectus available to it. In accordance with Article 84 of CBB Law of 2006, issuers of securities must publish a summary of the supplementary and/or replacement prospectus in two daily local newspapers, one in Arabic and the other in English and disclose the material amendments therein.

OFS-5.1.19

For Bahraini issuers who made an offer or listed their securities outside Bahrain, and for overseas issuers who made an offer or listed their securities in Bahrain, all information of importance to shareholders made public about the issuer in other markets must be made public in Bahrain, whether or not disclosure of such information would otherwise be required by the CBB.

OFS-5.1.20

Although the information sections and order of presentation are not mandatory, the CBB recommends that the format of the standards outlined in this Module be followed to enhance comparability. If the same information required by this Module is also required by the body of accounting principles used in preparing financial statements, the information need not be repeated, as long as there is a cross-reference to the location of the information. It is also recommended that a table of contents be provided at the beginning of the document.

OFS-5.1.21

The prospectus must remain valid for a maximum period of six months from the date of notification of the CBB approval. After this period no person shall offer securities based on such prospectus, unless approved by the CBB.

OFS-5.1.22

When a draft prospectus is submitted to the CBB or to any appointed advisor, the final offering price is not required to be disclosed. The offering price must however be included in the final printed proof prospectus and before the start of the offering period is set.

OFS-5.1.23

In accordance with Article 85 of the CBB Law, the person responsible for the preparation of the prospectus must ensure that it is free of incorrect or misleading information. Furthermore, Article 166 (b) makes it an offence to intentionally include false or misleading information and that the responsible persons may, subject to any greater penalty under the penal code, be punished by imprisonment or a fine not exceeding BD3,000.

OFS-5.1.24

The following persons are responsible for the reliability and accuracy of the prospectus or offering documents:

OFS-5.1.25

The issuer and/or lead manager must obtain confirmation and/or consent letters from the appointed advisors or experts acknowledging their responsibilities and obligations under Article 85 of the CBB Law of 2006.

OFS-5.1.26

If the prospectus is approved by the CBB subject to changes, the final corrected copy must be registered with the CBB within 24 hours prior to the date of commencement of the offering period.

OFS-5.1.27

The prospectus must be attached with all agreements, contracts, arrangements and documents required under this Module, or as referred to in the prospectus as being available for inspection.

OFS-5.1.28

The issuer, lead manager, or any other appointed advisors or persons involved in the preparation of any offering documents must ensure that the content and the statements included in such documents will meet, but not be limited to the following requirements:

OFS-5.1.29

For the purpose of Paragraph OFS-5.1.28, unwarranted promotional information means disclosing information beyond that necessary to inform investors and used only as an attempt to influence potential subscribers.

OFS-5.1.30

In order to meet the requirements under Paragraphs OFS-5.1.31 and OFS-5.1.32, the contents of the prospectus and statement therein should either be prepared, reviewed, or edited by the legal advisor or other related appointed advisors, depending on the importance and complexity of the concerned contents or statement.

OFS-5.1.31

No person shall use any offering document unless:

OFS-5.2.1

An offering document in respect of equity securities must contain the minimum content requirements of this Section and be prepared in accordance with Appendix 1.

OFS-5.2.2

Front cover page: The cover page of the offering document must contain the following particulars:

OFS-5.2.3

If the offer is planned to be issued in any other jurisdiction or is planned to be listed on any other regulated exchange(s) then the name of the securities regulator of such jurisdiction and/or the name of the other regulated exchange may be added to the above disclaimer statement, if such regulator or regulated exchange has the same or equivalent requirement.

OFS-5.2.4

The CBB will not permit any change, alteration, modification, reduction and/or addition in the above disclaimer statement, other than the cases mentioned under Paragraph OFS-5.2.3.

OFS-5.2.5

The prospectus must include on the inside cover page the following standard prominent and legible declaration and responsibility statement within a box frame:

OFS-5.2.6

The abovementioned standard responsibility statement must be duly signed by the issuer's board of directors.

OFS-5.2.7

The standard responsibility statement must be produced in the prospectus and the same must be submitted to the CBB.

OFS-5.2.8

The CBB will not normally accept any board of directors responsibility statement, unless it is duly signed by all directors. In cases where one or more of the directors cannot provide their signature on such statement, the issuer is required to provide to the CBB and disclose in the prospectus itself the actual reasons and justification.

OFS-5.2.9

In addition to the information required to be included on the front and inside cover pages of the prospectus, the prospectus must contain, at the minimum, the following information:

OFS-5.3.2

Front cover page:

The cover page of the debt securities offering document must contain the following particulars:

OFS-5.3.3

The offering document must include on the inside cover page the standard prominent and legible declaration and responsibility statement within a box frame:

OFS-5.3.4

The abovementioned standard responsibility statement must be duly signed by the issuer's/originator's board of directors.

OFS-5.3.5

The standard responsibility statement must be produced in the offering document and the same must be submitted to the CBB.

OFS-5.3.6

The CBB will not normally accept any board of directors' responsibility statement unless it is duly signed by all directors. In cases where one or more of the directors cannot provide their signature on such statement, the issuer is required to provide to the CBB and disclose in the offering document itself, the actual reasons and justifications.

OFS-5.3.7

In addition to the information required to be included on the front and inside cover pages of the prospectus or offering documents, the offering documents of debt securities must contain, at the minimum, the following sections of information:

OFS-5.6.4

In the case of an issuer wishing to issue more debt securities which are:

then the issuer must inform the debt security holders of the existing classes.

OFS-5.7.2

The offering document must contain the identity of the appointed advisors, including the Shari'a advisor.

OFS-5.7.3

The offering document must contain a Shari'a advisor's report that, at the minimum, covers the compliance of the security and its structure with the Shari'a principles.

OFS-5.9.2

The issuer must obtain a signed confirmation from its investors as to their status as accredited investors using the "Accredited Investors" Form (Appendix 11).

OFS-5.9.3

The issuer must submit a copy of the status confirmation contained in Rule OFS-5.9.2 on submission of the offering document.

OFS-5.9.4

The offering document must contain the following statement in respect of suitability of investors:

"This offer is a private placement. It is not subject to all of the regulations of the Central Bank of Bahrain that apply to public offerings of securities. This Memorandum is therefore intended only for "Accredited Investors" as defined in the Glossary to this Memorandum.

The securities offered by way of Private Placement may only be offered in minimum subscriptions of $100,000 (or equivalent in other currencies).

The Central Bank of Bahrain assumes no responsibility for the accuracy and completeness of the statements and information contained in this document and expressly disclaims any liability whatsoever for any loss howsoever arising from reliance upon the whole or any part of the contents of this document.

The Board of Directors and the management of the issuer accept responsibility for the information contained in this document. To the best of the knowledge and belief of the Board of Directors and the management, who have taken all reasonable care to ensure that such is the case, the information contained in this document is in accordance with the facts and does not omit anything likely to affect the reliability of such information".

OFS-5.9.5

The offering document must contain statements covering the risk of investment to the effect that:

OFS-5.9.6

Issuers must ensure that all relevant financial and risk information is placed in the offering document to allow investors to make an informed decision.

OFS-5.9.7

In line with Subparagraph OFS-1.5.2(i), all funds collected through an offering document must only be utilised as prescribed in the offering document, and such condition must be clearly stated in the prospectus under the related section 'Use of Proceeds'. Any usage of funds that is not as stated in the offering document is prohibited without the consent of the securities holders and the approval of the CBB. All applications to the CBB for approval must include evidence of the consent of the securities holders.

OFS-5.9.8

The PPM must disclose the estimated total amount of the proceeds of the issue, and the proposed timetable for their utilisation. Disclosure must also be made of the total amount of fees payable by the investors, up-front discount or placement commission agreed by the underwriters or other placement or selling agents and the issuer of selling shareholders, as well as the percentage such up-front discounts or placement commissions represent of the total amount of the offering, and the amount of up-front discount or placement commission per security.

OFS-5.9.9

The document must highlight to the investor the ultimate dilution of proceeds through the disclosure of fees, offering expenses or up-front discounts or placement commissions. There must be a statement of the major categories of expenses incurred in connection with the issuance and distribution of securities to be offered, and by whom the expenses are payable, if other than by the issuer. If any of the securities are to be offered for the account of an existing holder of securities in the issuer, the PPM must indicate the portion of expenses incurred by him.

OFS-5.9.10

Any private placement of securities offered in the Kingdom of Bahrain should meet the requirements as set out in OFS-2.4.7 and must set fees within reasonable and justifiable levels that do not materially compromise the interests of the issuer or the investor. The above disclosures of fees and utilisation of proceeds must be made prominently and clearly for the attention of investors.

OFS-5.10.1

With regards to the guaranteed issues, the following information must be disclosed in addition to the minimum content requirement set out in Section OFS-5.3:

OFS-5.10.2

Where issuing and offering is sought for debt securities of an issuer guaranteed or secured by another legal entity other than its holding company, the guarantor will be required to comply with the requirements of this Section to the same extent as if such guarantor were the issuer of the relevant debt securities.

OFS-5.10.3

An offering document issued in relation to a guaranteed issue must contain the same information regarding the guarantor as that regarding the issuer, so that, where appropriate the "issuer" should be read as applying equally to the guarantor.

OFS-5.10.4

The relevant guarantee must be issued in conformity with the law of the place where the guarantor is incorporated or otherwise established and in conformity with the guarantor's Memorandum and Articles of Association or equivalent documents, and all authorisations needed for its issue under such law or documents must have been duly given.

OFS-6.1.3

A copy of the prospectus submitted for registration must be signed by each director of the issuer.

OFS-6.1.4

If the prospectus is signed by an agent or alternate director, the printer's proof prospectus and the printed prospectuses must disclose this to be the case under the place where the respective director is meant to have signed the prospectus.

OFS-6.1.5

The printed proof copy of the prospectus must be accompanied by the following:

OFS-7.1.2

No person may make an announcement or invitation for subscription of securities, without determining the final record date, which must be a future date after the announcement of the offer but before the commencement of the offering period:

OFS-7.1.3

Unless otherwise determined in law or agreed by the CBB, the offer period for subscription of securities must be open for subscription as follows:

OFS-7.1.4

An issuer, when stating an offer price must also make reference to and provide a description in the prospectus or offering document of the bookbuilding, underwriting, price stabilisation or other relevant price factors.

OFS-7.1.5

Where an issuer is making a public offer following a rights share offering or a private offer, it may price the offers differently for the public offer or private placement. In such cases, the differential pricing must also consider the market trends and the justification for the price difference must be outlined in the offering document. The CBB will determine whether the differential pricing is in the best interests of the investors and the market in general.

OFS-7.1.6

Where the securities are to be listed on a licensed exchange, this must be disclosed in the offer and must provide the following information:

OFS-7.1.7

Where the offering document states that the offer will be listed on issue, the CBB may prevent allotment from taking place where the issuer has not obtained the authority to list from the licensed exchange at the time of issue, and order that the issuer refund any monies paid by subscribers in respect of such issue.

OFS-7.1.8

The issuer, lead manager and/or any other appointed advisor must ensure that the requisite listing agreement is signed within a maximum of 10 calendar days from the closing date of the offering period, and that the date for commencement of trading on a licensed exchange is within a maximum of 15 calendar days from the closing date of the offering period. Immediately upon the signing of the listing agreement with the licensed exchange, the lead manager must notify the CBB confirming the signing of the listing agreement and inform the CBB of the date for the commencement of trading.

OFS-7.1.9

As the listing authority under Article 86 of the CBB Law, the CBB shall retain the right to determine and decide on the final date of listing and/or date of commencement of trading of securities on a licensed exchange.