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  • MAE-1.6 MAE-1.6 Criteria for Granting License

    • MAE-1.6.1

      The CBB may license a person as a licensed exchange or licensed market operator if:

      (a) The CBB is satisfied that the establishment of a market or exchange to be operated by a person will;
      (i) Develop the financial sector and enhance confidence therein; and
      (ii) Protect the interests of investors in the market and exchanges and enhance the Kingdom's credibility as an international financial centre; and
      (b) The CBB is satisfied that the person, having applied to be a licensed exchange or licensed market operator under this Module, is able to comply with the obligations or requirements imposed on licensed exchanges or licensed market operators.
      Amended: April 2013

    • MAE-1.6.2

      The CBB may have regard to the following matters in determining whether a licensed exchange or licensed market operator has satisfied the criteria referred to in Subparagraphs MAE-1.6.1 (a) or (b):

      (a) The size and structure, or proposed size and structure, of the market to be operated by the applicant;
      (b) The nature of the services provided, or to be provided, by the market to be operated by the applicant;
      (c) The nature of the securities or futures contracts traded, or to be traded, on the market to be operated by the applicant;
      (d) The nature of the investors or participants, or proposed investors or participants, who may use or have an interest in the market to be operated by the applicant;
      (e) Whether the applicant is regulated by the CBB under this Module or any other law;
      (f) That the rules and by-laws of an applicant are in conformity with such conditions as may be prescribed with a view to ensure fair dealing and to protect investors;
      (g) That the applicant is willing to comply with any other conditions (including conditions as to the number of members) which the CBB, having regard to the the nature of the securities dealt with by it, may impose;
      (h) The proposed trading and settlement systems comply with up-to-date industry standards;
      (i) The persons who may be affected in the event that the applicant, or the market to be operated by the applicant, runs into difficulties;
      (j) Where the head office or principal place of business of the applicant is outside Bahrain, whether the applicant in the country or territory in which the head office or principal place of business of the applicant is situated, is subject to requirements and supervision comparable to those in the Kingdom of Bahrain;
      (k) The interests of the public; and
      (l) Any other circumstances that the CBB may consider relevant.
      Amended: April 2016

    • MAE-1.6.3

      The applicant must additionally be able to demonstrate to the CBB and the CBB must be satisfied that it has:

      (a) The financial resources, and the management and human resources with appropriate experience, necessary for the operation of a market or exchange;
      (b) Made arrangements for the proper supervision of all transactions effected through the market or exchange so as to ensure compliance with its rules;
      (c) Taken sufficient steps to maintain security and back-up procedures to ensure the integrity of the records of transactions effected through the market or exchange;
      (d) Insurance, a guarantee or compensation fund or other warranty plans in place to enable it to provide compensation, subject to the business rules, to clients; and
      (e) Made provisions, to the satisfaction of the CBB, for the clearing and settlement of transactions effected through the market or exchange and for the management of trade and settlement risk.

    • MAE-1.6.4

      In addition, the CBB may, for the purposes of licensing an overseas exchange as a licensed market operator, have regard in addition to any criteria prescribed under Paragraph MAE-1.6.1 whether adequate arrangements exist for cooperation between the CBB and the financial services regulator responsible for the supervision of the operator in the country or territory in which the head office or principal place of business of the operator is situated.

    • MAE-1.6.5

      In considering whether it is satisfied that an overseas exchange has met the requirements mentioned in Paragraph MAE-1.6.1, the CBB may have regard to:

      (a) The relevant laws and practices of the country or territory in which the head office or principal place of business of the operator is situated; and
      (b) The rules and practices of the operator.