• MAE-2 MAE-2 Obligation of Licensed Exchanges, Market Operators and Crowdfunding Platform Operators

    • MAE-2.1 MAE-2.1 General Obligations

      • Licensing Requirements

        • MAE-2.1.1

          A licensed exchange or licensed market operator shall, in respect of every market it operates:

          (a) As far as is reasonably practicable, ensure that the market is fair, orderly and transparent;
          (b) Manage any risks associated with its business and operations prudently;
          (c) Not act contrary to the interests of the public, having particular regard to the interests of the investing public;
          (d) Ensure that access for participation in its facilities is subject to criteria that are fair and objective, and that are designed to ensure the orderly functioning of the market and to protect the interests of the investing public;
          (e) Maintain business rules and, where appropriate, listing rules that make satisfactory provision for:
          (i) A fair, orderly and transparent market in securities and futures contracts that are traded through its facilities; and
          (ii) The proper regulation and supervision of its members;
          (f) Enforce compliance with its business rules and, where appropriate, its listing rules;
          (g) Have sufficient financial, human and system resources:
          (i) To operate a fair, orderly and transparent market;
          (ii) To meet contingencies or disasters; and
          (iii) To provide adequate security arrangements;
          (h) Ensure that it appoints or employs fit and proper persons as its chairman, chief executive officer, directors and key management officers;
          (i) Have a well designed Disaster Recovery Plan in place and the same shall be submitted to the CBB in accordance with Section MAE-2.10;
          (j) Have the capacity, authority, expertise and resources to enforce compliance by its members, shareholders, users and participants with laws, regulations and rules;
          (k) Ensure that the rules and regulations of the stock exchange are clearly expressed, understandable and readily available to anyone who needs to use them;
          (l) Ensure that the rules are applied equally to all participants without favour or discrimination;
          (m) Ensure that there is a system in place to record all trades and capture order entry data for surveillance purposes;
          (n) Ensure that it has a complaints and whistleblowing procedure; and
          (o) Have an operating manual, including the structure of the licensed exchange or licensed market operator;
          (p) Provide to the CBB, for its review and comment, at least 5 business days prior to publishing in the press, the draft agenda for any shareholders meetings referred to in Subparagraph MAE-2.1.1(r);
          (q) Ensure that any agenda items to be discussed or presented during the course of meetings which require the CBB's prior approval, have received the necessary approval, prior to the meeting taking place;
          (r) Invite a representative of the CBB to attend any shareholders' meeting (i.e. ordinary and extraordinary general assembly) taking place. The invitation must be provided to the CBB at least 5 business days prior to the meeting taking place; and
          (s) Within a maximum of 15 calendar days of any shareholders' meetings referred to in Subparagraph MAE-2.1.1(r), provide to the CBB a copy of the minutes of the meeting.
          Amended: July 2016
          Amended: April 2016

        • MAE-2.1.1A

          Licensed exchanges and licensed market operators must ensure that all regulated financial services are provided without any discrimination based on gender, nationality, origin, language, faith, religion, physical ability or social standing.

          Added: October 2020

      • Notification Requirements

        • MAE-2.1.2

          A licensed exchange or licensed market operator shall, as soon as practicable after the occurrence of any of the following circumstances, notify the CBB of the circumstance:

          (a) Any material change to the information provided by the licensed exchange or licensed market operator in its application under MAE-1.2;
          (b) The carrying on of any business by the licensed exchange or licensed market operator other than:
          (i) The business of operating a market;
          (ii) A business incidental to operating a market; or
          (iii) Such business or class of businesses as the CBB may prescribe;
          (c) The acquisition by the licensed exchange or licensed market operator of a substantial shareholding in a corporation which does not carry on:
          (i) The business of operating a market;
          (ii) A business incidental to operating a market; or
          (iii) Such business or class of businesses as the CBB may prescribe;
          (d) The licensed exchange or licensed market operator becoming aware of a financial irregularity or other matter which in its opinion:
          (i) May affect its ability to discharge its financial obligations; or
          (ii) May affect the ability of a member of the licensed exchange or licensed market operator to meet its financial obligations to the licensed exchange or licensed market operator;
          (e) The licensed exchange or licensed market operator reprimanding, fining, suspending, expelling or otherwise taking disciplinary action against a member of the licensed exchange or licensed market operator;
          (f) The licensed exchange or licensed market operator reprimands, suspends, dismisses or otherwise takes disciplinary action against any of its directors, or key management officers or if any director or key management officer is subject to an order or petition of bankruptcy or criminal prosecution;
          (g) Any civil or criminal legal proceeding instituted against the licensed exchange or licensed market operator, whether in Bahrain or elsewhere;
          (h) Any disciplinary action taken against the licensed exchange or licensed market operator by any regulatory body, whether in Bahrain or elsewhere, other than the CBB;
          (i) Any significant change to the regulatory requirements imposed on the licensed exchange or licensed market operator by any regulatory body, whether in Bahrain or elsewhere, other than the CBB;
          (j) A failure by the licensed exchange or licensed market operator to adhere to the trading days, hours or sessions of the licensed exchange or licensed market operator;
          (k) Any disruption of, delay in, suspension of, or termination in any trading procedure or trading practice of the licensed exchange or licensed market operator including those resulting from any system failure;
          (l) Any other matter that the CBB may specify by notice in writing to the licensed exchange or licensed market operator.
          Amended: April 2013

        • MAE-2.1.3

          The CBB may, at any time after receiving a notification referred to in Paragraph MAE-2.1.2 and after providing the licensed exchange and licensed market operator an opportunity to be heard, issue directions to the licensed exchange or licensed market operator:

          (a) Where the notification relates to a matter referred to in Subparagraph MAE-2.1.1 (b):
          (i) To cease carrying on the first-mentioned business referred to in Subparagraph MAE-2.1.1 (b); or
          (ii) To carry on the first-mentioned business referred to in Subparagraph MAE-2.1.1 (b) subject to such conditions or restrictions as the CBB may impose; or
          (b) Where the notification relates to a matter referred to in Subparagraph MAE-2.1.1 (c):
          (i) To dispose of the shareholding referred to in Subparagraph MAE-2.1.1 (c); or
          (ii) To exercise its rights relating to such shareholding subject to such conditions or restrictions as the CBB may impose, and the licensed exchange or licensed market operator shall comply with such directions.
          Amended: April 2016
          Amended: April 2013

        • MAE-2.1.4

          Where a circumstance referred to in MAE-2.1.2 has occurred, the licensed exchange or licensed market operator shall, in addition to the notification required under Paragraph MAE-2.1.2, within 14 days of the occurrence of the circumstance or such longer period as the CBB may permit, submit a report to the CBB of the circumstances relating to the occurrence, the remedial actions taken at the time of the occurrence, and the subsequent follow-up actions that the licensed exchange or licensed market operator has taken or intends to take.

          Amended: April 2016

        • MAE-2.1.5

          An exchange may levy on its members, participants and users such fees as it may deem necessary in the form of:

          (a) Membership fees; and/or
          (b) Listing fees
          Amended: April 2013

        • MAE-2.1.6

          The fees shall be paid quarterly, semi-annually or annually at the discretion of the exchange.

        • MAE-2.1.7

          A licensed exchange or licensed market operator shall, within a reasonable period of time prior to entering into negotiations to establish a trading linkage, clearing arrangement or cooperative arrangement with the person establishing or operating an overseas market or clearing facility, notify the CBB of such intent to enter into negotiations.

        • MAE-2.1.8

          In Paragraph MAE-2.1.7, "cooperative arrangement" shall not include:

          (a) Any joint development of products and services;
          (b) Any joint marketing efforts between the licensed exchange and the person operating an overseas market or clearing facility in promoting the services of either entity; or
          (c) Any memoranda of understanding for the exchange of information.

    • MAE-2.2 MAE-2.2 Obligation to Maintain Proper Records

      • MAE-2.2.1

        Every licensed exchange or licensed market operator shall ensure that all relevant books and other information, as may be required by the CBB for the purposes of this Module, be kept for a minimum of 10 years.

    • MAE-2.3 MAE-2.3 Final Accounts and Auditing

      • MAE-2.3.1

        Every licensed exchange or licensed market operator shall appoint one or more qualified and experienced external auditors for its accounts for every financial year. A prior written approval by the CBB will be required before appointing an auditor.

      • MAE-2.3.2

        If a licensed exchange or licensed market operator fails to appoint an auditor within 4 months from the beginning of the financial year, the CBB shall appoint such auditor.

      • MAE-2.3.3

        The licensed exchange or licensed market operator shall pay the fees of the auditor regardless of the manner in which such auditor is appointed.

      • MAE-2.3.4

        An auditor shall not be the chairman or a director in the licensed exchange or licensed market operator's board or a managing director, agent, representative or taking up any administrative work therein, or supervising its accounts, or a next of kin to someone who is responsible for the administration or accounts of a licensed exchange or licensed market operator, or having an extraordinary interest in a licensed exchange or licensed market operator as the CBB may determine.

      • MAE-2.3.5

        If any of the circumstances referred to in Paragraph MAE-2.3.4 occurs after the appointment of the auditor, the licensed exchange or licensed market operator must appoint another auditor.

        Amended: April 2016

      • MAE-2.3.6

        The licensed exchange or licensed market operator shall provide the external auditor with all information and assistance necessary for carrying out his duties.

      • MAE-2.3.7

        The duties of the auditor shall include the preparation of a report on the final accounts. The report shall contain a statement on whether the licensed exchange or licensed market operator's accounts are correct and reflect the actual state of affairs of the licensed exchange or licensed market operator according to the auditing standards prescribed by the CBB and whether the licensed exchange or licensed market operator has provided the auditor with any required information and clarifications.

      • MAE-2.3.8

        The final audited accounts shall be presented to the general meeting of the licensed exchange or licensed market operator together with the auditor's report. A copy of these documents shall be sent to the CBB at least 15 days before the date of the general meeting.

      • MAE-2.3.9

        If the licensed exchange or licensed market operator is a foreign company, a copy of its final audited accounts together with the auditor's report shall be sent to its main office abroad.

      • MAE-2.3.10

        Every licensed exchange or licensed market operator must, within 3 months following every financial year, send to the CBB and make public its final audited accounts, for all the transactions carried out until year end as well as any other financial statements required by the CBB. Extracts of the final audited accounts shall be published in 2 local daily newspapers, one in Arabic and the other in English, within 60 calendar days from the end of the financial year.

        Amended: July 2016

      • MAE-2.3.11

        Audited financial statements must comply with International Financial Reporting Standards (IFRS)/International Accounting Standards (IAS). For Islamic institutions, audited financial statements must comply with AAOIFI standards or where AAOIFI standards do not cover a subject, IFRS must be followed.

        Amended: July 2016

    • MAE-2.4 MAE-2.4 Obligation to Submit Periodic Reports

      • MAE-2.4.1

        A licensed exchange or licensed market operator shall submit to the CBB:

        (a) Within 3 months after the end of its financial year or such longer period as the CBB may permit, a copy of its:
        (i) Annual report and directors' report; and
        (ii) Auditor's report;
        (b) Within 45 days after the end of each of the first 3 quarters of its financial year or such longer period as the CBB may permit, or the preceding quarter, in such form as may be approved by the CBB, a copy of its:
        (i) Profit and loss accounts; and
        (ii) Balance sheet;
        (c) Within 3 months after the end of its financial year or such longer period as the CBB may permit, a report on how the licensed exchange or licensed market operator has discharged its responsibilities under the CBB Law and these Rules during that financial year;
        (d) Within 3 months after the end of its financial year or such longer period as the CBB may permit, a copy of the balance sheet of any fidelity fund of the licensed exchange prepared in such form as may be approved by the CBB;
        (e) The following reports relating to the business of the licensed exchange or licensed market operator:
        (i) Prescribed monthly statistics in Form 5 within 10 business days from the end of the month;
        (ii) Prescribed quarterly statistics in Form 6 within 10 business days from the end of each quarter; and
        (iii) Where the licensed exchange is operating a futures market, Form 7 within 10 business days from the end of each month;
        (f) Such other report as the CBB may require for the proper administration of this Module, at such time or on such periodic basis as may be required by the CBB.
        Amended: April 2013

      • MAE-2.4.2

        The auditor's report referred to in Paragraph MAE-2.4.1 (a)1 shall unless otherwise provided to the CBB by way of a management letter, include the findings and recommendations of the auditors, if any, on the internal controls of the licensed exchange or licensed market operator; and

        (a) Any provision of this Module;
        (b) Any direction issued by the CBB under this Module; or
        (c) Any other relevant laws or regulations.
        Amended: April 2013

      • IIS Reporting Requirements

        • MAE-2.4.3

          A licensed exchange or licensed market operator is required to complete online non-financial information related to its institution by accessing the CBB's institutional information system (IIS). Licensees must update the required information at least on a quarterly basis or when a significant change occurs in the non-financial information included in the IIS. If no information has changed during the quarter, the licensee must still access the IIS quarterly and confirm the information contained in the IIS. Licensees must ensure that they access the IIS within 20 calendar days from the end of the related quarter and either confirm or update the information contained in the IIS.

          Added: April 2013

        • MAE-2.4.4

          Licensees failing to comply with the requirements of Paragraph MAE-2.4.3 or reporting inaccurate information are subject to financial penalties or other enforcement actions.

          Added: April 2013

    • MAE-2.5 MAE-2.5 Obligation to Assist CBB

      • MAE-2.5.1

        A licensed exchange and licensed market operator shall provide such assistance to the CBB as the CBB may require for the performance of the functions and duties of the CBB, including the furnishing of such returns and the provisions of:

        (a) Such books and information:
        (i) Relating to the business of the licensed exchange or licensed market operator; or
        (ii) In respect of such dealings in securities or trading in futures contracts; and
        (b) Such other information, as the CBB may require for the proper administration of this Module.
        Amended: April 2013

      • MAE-2.5.2

        The CBB may at is discretion:

        (a) Call for the provision of additional information about the affairs of the exchange or the operator;
        (b) Carry out inspections of the office of the exchanges and inspect the books of accounts and other relevant books of the exchange or the operator; and
        (c) Appoint one or more person to inquire into the affairs of the exchange or operator.

    • MAE-2.6 MAE-2.6 Obligation to Maintain Confidentiality

      • MAE-2.6.1

        Subject to Paragraph MAE-2.6.2, a licensed exchange and licensed market operator and its officers and employees must maintain, and aid in maintaining the confidentiality of all user information that:

        (a) Comes to the knowledge of the licensed exchange or licensed market operator, or any of its officers or employees; and
        (b) Is in possession of the licensed exchange or licensed market operator, or any of its officers or employees.
        Amended: April 2016

      • MAE-2.6.2

        Paragraph MAE-2.6.1 does not apply to:

        (a) The disclosure of user information for such purposes, or in such circumstances as the CBB may prescribe;
        (b) Any disclosure of user information which is authorised by the CBB to be disclosed or furnished; or
        (c) The disclosure of user information pursuant to any requirement imposed under any law or order of court in the Kingdom of Bahrain.
        Amended: April 2016

      • MAE-2.6.3

        For the avoidance of doubt, nothing in this Section shall be construed as preventing a licensed exchange or licensed market operator from entering into a written agreement with a user which obliges the licensed exchange or licensed market operator to maintain a higher degree of confidentiality than that specified in this Section.

        Amended: April 2016

    • MAE-2.7 MAE-2.7 Exceptions to Obligation to Maintain Confidentiality

      • MAE-2.7.1

        The obligation to maintain confidentiality shall not apply to the disclosure of user information by a licensed exchange or licensed market operator, or its officers or employees for the following purposes or in the following circumstances:

        (a) The disclosure of user information is necessary for the making of a complaint or report under any law for an offence alleged or suspected to have been committed under such law;
        (b) The disclosure of user information is permitted for such purpose specified in writing by the user or, where the user is deceased, by his appointed personal representative;
        (c) The disclosure of user information is necessary for the execution by the licensed exchange or licensed market operator of a transaction in any securities or futures contracts or clearing or settlement of a transaction and such disclosure is made only to another user which is:
        (i) A party to the transaction; or
        (ii) A member of a licensed exchange or licensed market operator, or a designated clearing house through which that transaction is executed, cleared or settled;
        (d) The disclosure of user information is necessary:
        (i) In any disciplinary proceedings of the licensed exchange or licensed market operator, provided that reasonable steps are taken to ensure that user information disclosed to any third person is used strictly for the purpose for which the user information is disclosed; or
        (ii) For the publication, in any form or manner, of the disciplinary proceedings and the outcome thereof;
        (e) The user information disclosed is already in the public domain;
        (f) The disclosure of user information is made in connection with:
        (i) The outsourcing or proposed outsourcing of any function of the licensed exchange or licensed market operator to a third party;
        (ii) The engagement or potential engagement of a third party by the licensed exchange or licensed market operator to create, install or maintain systems of the licensed exchange or licensed market operator; or
        (iii) The appointment or engagement of an auditor, a lawyer, a consultant or other professional by the licensed exchange or licensed market operator under a contract for service;
        (g) The disclosure of user information is necessary in:
        (i) An application for a grant of probate or letters of administration or the resealing thereof in relation to the estate of a deceased user; or
        (ii) The administration of the estate of a deceased user, including such disclosure as may be required for this purpose by the relevant authority; or
        (h) The disclosure of user information is made in connection with:
        (i) In the case where the user is an individual, the bankruptcy of a user; or
        (ii) In the case where the user is a body corporate, the winding up or receivership of a user.
        Amended: April 2013

      • MAE-2.7.2

        Where user information is disclosed under MAE-2.7.1 (f), the licensed exchange or licensed market operator shall:

        (a) Maintain a record of the circumstances relating to the disclosure of user information referred to in MAE-2.7.1 (f); and the particulars of:
        (i) In the case of the disclosure of information under MAE-2.7.1 (f), the outsourcing of the function of the licensed exchange;
        (ii) In the case of the disclosure of information under MAE-2.7.1 (f), the engagement of the third party; and
        (iii) In the case of the disclosure of information under MAE-2.7.1 (f), the appointment or engagement of the auditor, lawyer, consultant or other professional and make that record available for inspection by the CBB;
        (b) Disclose the user information only insofar as this is necessary for the relevant purpose; and
        (c) Take reasonable steps to ensure that the user information disclosed is used by the person to whom the disclosure is made strictly for the relevant purpose, and that the user information is not disclosed by that person to any other person except with the consent of the licensed exchange or licensed market operator.
        Amended: April 2013

      • MAE-2.7.3

        Where disclosure of user information is permitted to be made for any purpose or in any circumstance under Paragraph MAE-2.7.1 to a body corporate, the user information may be disclosed only to those officers of the body corporate to whom the disclosure is necessary for the relevant purpose.

      • MAE-2.7.4

        In Paragraphs MAE-2.7.2 and MAE-2.7.3, "relevant purpose" means:

        (a) In the case of the disclosure of information under Paragraph MAE-2.7.1 (f), facilitating the outsourcing of the function of the licensed exchange or licensed market operator;
        (b) In the case of the disclosure of information under Paragraph MAE-2.7.1 (f), facilitating the engagement of the third party; and
        (c) In the case of the disclosure of information under Paragraph MAE-2.7.1 (f), facilitating the appointment or engagement of the auditor, lawyer, consultant or other professional.

    • MAE-2.8 MAE-2.8 Provision of Information to Investors

      • MAE-2.8.1

        A licensed exchange or licensed market operator shall:

        (a) Make available upon request by; or
        (b) Publish in a manner that is accessible to, any investor who accesses or potential investor who may access, any market that the licensed exchange or licensed market operator operates information on:
        (i) All services of the licensed exchange or licensed market operator;
        (ii) All products available on the market operated by the licensed exchange or licensed market operator;
        (iii) Applicable fees and charges;
        (iv) Applicable margin requirements; and
        (v) Any arrangement that may be in place to compensate an investor who suffers pecuniary loss as a result of these activities or insolvency of a participant of the licensed exchange or licensed market operator.
        Amended: April 2013

      • MAE-2.8.2

        In Paragraph MAE-2.8.1 "investor" means:

        (a) In the case where the licensed exchange is incorporated in Bahrain, any investor, whether in Bahrain or elsewhere; and
        (b) In the case of licensed market operators, any investor in Bahrain.

    • MAE-2.9 MAE-2.9 Transmission and Storage of User Information

      • MAE-2.9.1

        A licensed exchange or licensed market operator shall take all reasonable measures to maintain the integrity and security of the transmission and storage of user information.

    • MAE-2.10 MAE-2.10 Business Continuity Plan

      • MAE-2.10.1

        A licensed exchange or licensed market operator shall maintain at all times a plan of action (referred to in this regulation as a business continuity plan) setting out the procedures and establishing the systems necessary to restore fair, orderly and transparent operations of any market it operates, in the event of any disruption to the operations of the market.

      • MAE-2.10.2

        A licensed exchange or licensed market operator shall review the procedures and systems referred to in MAE-2.10.1 on such regular basis as may be specified in the business continuity plan.

      • MAE-2.10.3

        A licensed exchange or licensed market operator shall immediately notify the CBB of any activation of its business continuity plan and of any action taken or intended to be taken to restore fair, orderly and transparent operations of any market it operates.

      • MAE-2.10.4

        A licensed exchange or licensed market operator shall, within 14 days or such longer period as the CBB may permit, inform the CBB of any material change to the business continuity plan, and shall submit at the request of the CBB, a copy of the new plan to the CBB.

    • MAE-2.11 MAE-2.11 Obligations of Crowdfunding Platform Operators

      • MAE-2.11.1

        The content of MAE-2.11 and MAE-2.12 of this Module applies to crowdfunding platform operators licensed under CBB Rulebook Volume 5 (Ancillary Service Providers) undertaking equity crowdfunding activities.

        Added: October 2017

      • MAE-2.11.2

        A crowdfunding platform operator must, in respect of market it operates:

        (a) Carry out a due diligence exercise on prospective equity crowdfunding issuers planning to use its platform;
        (b) Monitor and ensure compliance of its rules;
        (c) Carry out investor education programmes;
        (d) Ensure the equity crowdfunding offering statement lodged with the crowdfunding platform operator is verified for accuracy and made accessible to investors through the platform;
        (e) Upon approval granted to an equity crowdfunding issuer to make an equity crowdfunding offer, immediately notify the CBB and file a copy of the following documents with the Capital Market Supervision Directorate:
        (i) A letter of approval from the crowdfunding platform operator clearly mentioning that the equity crowdfunding issuer's application has been verified and approved, and that the crowdfunding offer adheres to the CBB Law, rules and regulations and any other applicable law, rules and regulations;
        (ii) A copy of the equity crowdfunding offering statement filed by the equity crowdfunding issuer; and
        (iii) Any amendments to the equity crowdfunding offering statement filed by the equity crowdfunding issuer.
        (f) Inform investors of any material adverse change to the crowdfunding issuer's proposal as set out under Paragraph MAE-2.11.4;
        (g) Ensure that the fundraising limit imposed on an equity crowdfunding issuer is not breached;
        (h) Enter into a signed written agreement with an equity crowdfunding issue with all applicable terms and conditions. The crowdfunding platform operator and the equity crowdfunding issuer must fulfil all obligations in their respective capacities in accordance with the signed written agreement.
        (i) Ensure that adequate policy for identifying and managing the risk of fraud by equity crowdfunding issuer that, at the minimum:
        (i) checks, against information that is readily accessible and information that is otherwise available to the public, the identity of the issuer and information provided by the issuer relating to the identity and satisfy the "fit and proper" requirements of its directors and senior managers; and
        (ii) excludes an equity crowdfunding issuer from using the crowdfunding platform if :
        A. It is not satisfied as to the identity of the equity crowdfunding issuer or of the equity crowdfunding issuer directors and senior managers; or
        B. Has reason to believe that any of the equity crowdfunding issuer's directors or managers do not meet the "fit and proper" requirements. In assessing a person's fitness and propriety, a crowdfunding platform operator must consider previous professional and personal conduct including whether directors or managers has been convicted of offence involving fraud, dishonesty, or has been disqualified by a court, regulator or other competent body as a director or as a manager of a corporation, or has been subject of any disciplinary proceedings, investigation or fines by any government authority, regulatory agency or professional body or association; or
        C. Has reason to believe that the equity crowdfunding issuer is not likely to comply with the obligations imposed on it under the equity crowdfunding platform services.
        (j) Appoint a Money Laundering Reporting Officer (MLRO) and comply with the requirements of Module FC of the CBB Rulebook Volume 5 in respect of Anti-Money Laundering and Combating Financial Crime requirements;
        (k) Establish effective systematic internal procedures for establishing and verifying the identity of investors and the source of their funds and must undertake investors due diligence (KYC) including FATCA report. Such procedures must be set out in writing and strictly adhered to.
        (l) Establish a framework which sets out policies and procedures to effectively and efficiently manage conflicts of interest and the need to have fair, orderly, and transparent systems and procedures to carry out its functions. Such conflicts must be managed in a timely manner.
        (m) Ensure that its business activities is restricted to arranging deals by bringing together equity crowdfunding issuers and investors. It must not provide any investment advice to investors.
        (n) The board members, shareholders, management and their close family members:
        (i) Must not holds any shares or invest in whatever form, in any of the equity crowdfunding issuers hosted on its platform;
        (ii) Must not pay any referrer or introducer, or receive payment in whatever form, including payment in the form of shares, in connection with an equity crowdfunding issuer hosted on its platform; and
        (iii) Must not provide any financial assistance to investors to invest in shares of an equity crowdfunding issuer hosted on its platform.
        (o) Must not invest in an equity crowdfunding offer to the extent that it operates a crowdfunding platform. In order to undertake investment in crowdfunding issues, a crowdfunding platform operator must obtain a separate license from the CBB for investment activities and also disclose conflicts of interests that may arise between its interest and those of its clients.
        (p) Have an adequate policy (a fair dealing policy) for excluding an equity crowdfunding issuer from using the crowdfunding platform if the provider has information that gives it reason to believe that the equity crowdfunding issuer, in relation to any dealing in shares has:
        (i) engaged in conduct that is misleading or deceptive or likely to mislead or deceive; or
        (ii) made a false or misleading representation; or
        (iii) made an unsubstantiated representation
        (q) Ensure cyber-security at all times including the conduct of IT security penetration testing semi-annually by an independent consultant.
        (r) Maintain relevant systems in place for mitigating and managing operational and other risks.</div>
        (s) Subsequent to an equity crowdfunding offer, the crowdfunding platform operator must submit to the CBB the results of the crowdfunding offer, including an allotment report, within 7 calendar days from the closing date of the offer period.
        (t) Ensure that entities engaged in real estate projects comply with applicable real estate laws;
        (u) Provide frequent updates on its platform regarding the progress of an equity crowdfunding offer meeting the offer size.
        (v) Notify the CBB on the progress of an equity crowdfunding offer towards meeting the offer size within 2 calendar days after reaching 50% and 80% of the offer size.
        (w) Must be a member of the Bahrain Credit Reference Bureau.
        Added: October 2017

      • MAE-2.11.3

        The scope of the due diligence exercise by a crowdfunding platform operator, referred to in Paragraph MAE- 2.11.2(a), must include taking reasonable steps including but not limited to:

        (a) Conduct background checks on the equity crowdfunding issuer to ensure "fit and proper" requirements are met by the issuer, its board of directors, senior management and controlling owner; and
        (b) Verify that the equity crowdfunding offering statement, lodged by the equity crowdfunding issuer, does not contain information that is false or misleading, in its opinion does not prejudice the interests of present or future investors and does not omit any material information.
        Added: October 2017

      • MAE-2.11.4 MAE-2.11.4

        For the purpose of Paragraph MAE-2.11.2(f), a material adverse change concerning the equity crowdfunding issuer, may include any of the following matters:

        (a) The discovery of a false or misleading statement in the equity crowdfunding offering statement in relation to the equity crowdfunding offer; or
        (b) The discovery of a material omission of information required to be included in the equity crowdfunding offering statement; or
        (c) There is a material change or development in the circumstances relating to the equity crowdfunding offer or the equity crowdfunding issuer.
        Added: October 2017

        • Appointment of Shari'a Advisor

          • MAE-2.11.5

            For the purposes of Islamic equity crowdfunding offers, crowdfunding platform operators must appoint an independent Shari'a advisor. The appointed Shari'a advisor must be a person or a corporation.

            Added: October 2017

          • MAE-2.11.6

            The appointed Shari'a advisor must advise the equity crowdfunding issuer on all aspects of the Islamic equity crowdfunding offer, including documentation, structuring, investment, as well as other administrative and operational matters in relation to the Islamic equity crowdfunding offer, and ensure compliance with applicable Shari'a principles.

            Added: October 2017

          • MAE-2.11.7

            The crowdfunding platform operator must disclose the name of the Shari'a advisor appointed to advise on the Islamic equity crowdfunding offer and information relating to the structure of the Islamic equity crowdfunding offer.

            Added: October 2017

          • MAE-2.11.8

            The Shari'a advisor must produce and sign a Shari'a pronouncement report or declaration that the equity crowdfunding offer is in compliance with the principles of Shari'a and include the report in the equity crowdfunding offering statement which is submitted to the crowdfunding platform operator.

            Added: October 2017

          • MAE-2.11.9

            The equity crowdfunding issuer is responsible for the compliance of the issue with Shari'a principles. The Shari'a advisor's role does not release equity crowdfunding issuer's management from their responsibility in ensuring such compliance.

            Added: October 2017

        • Type of Securities Eligible for Hosting

          • MAE-2.11.10

            Ordinary shares fully paid and free from all encumbrances of closed, private, family companies, start-up, small and medium size companies and real estate projects are eligible for hosting on a crowdfunding platform.

            Added: October 2017

          • MAE-2.11.11

            In order to approve a real estate equity crowdfunding offer, a crowdfunding platform operator must ensure that real estate projects comply with the following additional requirements; (a) The real estate project must be duly incorporated and registered with relevant authority in respective jurisdiction.; and (b)The real estate project must be an income producing (rental income, leasing etc.) project or property and the intended uses may be for commercial and/or dwelling purpose.

            Added: October 2017

        • Permitted Equity Crowdfunding Issuers

          • MAE-2.11.12

            An equity crowdfunding issuer must be a duly incorporated entity under the law of the Kingdom of Bahrain, or in case of overseas equity crowdfunding issuer, under the law of its place of incorporation.

            Added: October 2017

          • MAE-2.11.13

            The following entities are prohibited from raising funds through a crowdfunding platform operator:

            (i) Commercially or financially complex structures (i.e. investment fund companies or financial institutions);
            (ii) Public-listed companies and their subsidiaries;
            (iii) Companies with no specific business plan or its business plan is to merge or acquire an unidentified entity (i.e. blind pool);/div>
            (iv) Companies with paid-up share capital exceeding BD250,000 or equivalent amount in other currency; and
            (v) Any other type of entity that is specified by the CBB.
            Added: October 2017

          • MAE-2.11.14

            An equity crowdfunding issuer must not be allowed to be hosted concurrently on multiple crowdfunding platforms.

            Added: October 2017

        • Overseas Equity Crowdfunding Issuers

          • MAE-2.11.15

            The equity crowdfunding requirements for locally incorporated equity crowdfunding issuers shall apply equally to overseas equity crowdfunding issuers.

            Added: October 2017

          • MAE-2.11.16

            An overseas equity crowdfunding issuer must provide the following additional information, documents along with the equity crowdfunding offering statement;

            (a) A copy of the home market's relevant laws, rules and regulations that show no restrictions are imposed for making an equity crowdfunding offer;
            (b) A copy of necessary approval from the home regulator;
            (c) Confirmation that it shall adhere to the general requirements as well as with the additional requirements, as stipulated in this Module;
            (d) The applicable governing law and specify the various risk factors associated with cross border transactions; and
            (e) The necessary share registrar arrangements with the crowdfunding platform operator.
            Added: October 2017

        • Limits to Funds Raised

          • MAE-2.11.17

            The following limits shall apply to an equity crowdfunding issuer being hosted on a crowdfunding platform, except where, subject to the CBB's prior written approval, the funding raised is to be used for a Government of Bahrain-led initiative/project:

            (a) Equity crowdfunding issuer, excluding entities engaged in real estate projects, can raise up to BD 250,000 or equivalent amount in other currency within a 12-month period, irrespective of the number of projects an equity crowdfunding issuer may seek funding for during the 12-month period; and
            (b) Equity crowdfunding issuer who qualify as entity engaged in real estate projects can raise up to BD 500,000 or equivalent amount in other currency within a 12-month period, irrespective of the number of projects an equity crowdfunding issuer may seek funding for during the 12-month period.
            Amended: October 2018
            Added: October 2017

        • Eligible Investors and Investment Limits

          • MAE-2.11.18

            Only accredited investors and expert investors are eligible to register with a crowdfunding platform operator and participate in an equity crowdfunding offer.

            Added: October 2017

          • MAE-2.11.19

            [This Paragraph was deleted in January 2019].

            Deleted: January 2019
            Added: October 2017

          • MAE-2.11.20

            A crowdfunding platform operator must ensure that registered expert investors comply with the applicable investment limits and on identification of any breach of applicable investment limit, report such breach to the CBB.

            Added: October 2017

          • MAE-2.11.21

            Expert investors must submit to crowdfunding platform operator a "self- declaration form" confirming that their investment is within the applicable investment limit.

            Added: October 2017

        • Disclosure Requirements

          • MAE-2.11.22

            A crowdfunding platform operator must disclose and display prominently on its platform, any relevant information relating to equity crowdfunding including:

            (a) Information relating to equity crowdfunding issuer as specified under Section MAE-2.12;
            (b) Investor education materials and appropriate risk disclosure;
            (c) Information on how to facilitates the investor's investment including providing communication channels to permit discussions about equity crowdfunding issuers hosted on its platform;
            (d) General risk warning in participating in equity crowdfunding;
            (e) Information on rights of investor relating to participation in equity crowdfunding;
            (f) Information about complaints handling or dispute resolution and its procedures;
            (g) Fees, charges and other expenses that it may charge to, impose on an equity crowdfunding issuer or investor; and
            (h) Information on processes and contingency arrangement in the event the crowdfunding platform operator is unable to carry out its operations or cessation of business.
            Added: October 2017

          • MAE-2.11.23

            A crowdfunding platform operator must immediately notify to the CBB of any non-compliance with CBB Law, rules and regulations and other applicable law, rules and regulations, money laundering, fraud or other dishonest conduct involving the crowdfunding platform operator, investor or equity crowdfunding issuer.

            Added: October 2017

        • Warning Statement

          • MAE-2.11.24

            A crowdfunding platform operator must ensure that a warning statement is prominently displayed on the home page of its website. The warning statement must be in the following form;

            "Warning statement about equity crowdfunding

            Equity crowd funding is risky.

            Equity crowdfunding issuers using this equity crowdfunding platform includes closed, private, family companies, start-up and small and medium size companies incorporated in the Kingdom of Bahrain or elsewhere and entities engaged in real estate projects in the Kingdom of Bahrain or elsewhere.

            Investment in these types of businesses is very speculative and carries high risks. You may lose your entire investment, and must be in a position to bear this risk without undue hardship.

            The CBB Law, Rules and Regulations normally requires people who offer financial products to give information to investors before they invest. This requires those offering financial products to have disclosed information that is important for investors to make an informed decision.

            The usual rules do not apply to crowdfunding offer by equity crowdfunding issuers using this equity crowdfunding platform. As a result, you may not be given all the information usually required. You will also have fewer other legal protections for this investment.

            Ask questions, read all information given carefully, and seek independent financial advice before committing yourself."

            Added: October 2017

          • MAE-2.11.25

            A crowdfunding platform operator:

            (a) Must obtain from each investor, a confirmation to the following effect:
            (i) "I confirm that I have seen the warning statement about equity crowd funding and—
            (ii) I understand that equity crowd funding is risky and I may lose my entire investment; and
            (iii) I confirm that I could bear that loss without suffering undue hardship;
            (iv) I understand that the usual legal protections do not apply to this investment; and
            (v) I understand that I may not be given the same information as is usually required by the CBB Law, Rules and Regulations for investments."
            (b) Must obtain the "warning statement confirmation" referred to in Paragraph MAE-2.11.25(a) in writing in a separate document or, if it is obtained by electronic means, through a process by which it is obtained separately from the investor agreement to use the service.
            (c) Must obtain the warning statement confirmation before the investor is authorised to use the service.
            Added: October 2017

        • Investor Agreement

          • MAE-2.11.26

            A crowdfunding platform operator must enter into a written agreement (investor agreement) with each investor before the investor is authorized to use the service.

            Added: October 2017

          • MAE-2.11.27

            The investor agreement referred to in Paragraph MAE-2.11.26 must include:

            (a) How investors and equity crowdfunding issuers apply for, and obtain, access to the facility and the eligibility criteria that apply in each case;
            (b) How shares are issued and allotted;
            (c) How investor money is received and dealt with;
            (d) The nature, extent, and frequency of monitoring the performance of the equity crowdfunding issuer by the crowdfunding platform operator;
            (e) The charges that may be payable to the crowdfunding platform operator by an investor and when the investor must pay the charges; and
            (f) The warning statement referred to in Paragraph MAE-2.11.24.
            Added: October 2017

        • Investor Money

          • MAE-2.11.28

            A crowdfunding platform operator must:

            (a) Establish systems and controls for maintaining accurate and up-to-date records of investors' monies held;
            (b) Ensure that investors' monies are properly safeguarded from inappropriate use;
            (c) Subscription monies received in respect of an equity crowdfunding offer must be held in a separate bank account with a licensed retail bank based in Kingdom of Bahrain;
            (d) Designate a separate bank account for each issue of equity crowdfunding offer. The name of the designated bank must be provided to investors as part of information relating to equity crowdfunding issuer specified under Paragraph MAE-2.11.22(a).
            (e) Hold subscription monies received in respect of crowdfunding offer in the designated separate bank account held with a licensed retail bank, until the final allotment of shares has been approved by the crowdfunding platform operator.

            Release the fund to the equity crowdfunding issuer after the following conditions are met:

            (i) The equity crowdfunding offer confirms to minimum subscription requirement and conditions regarding unsubscribed portion of an equity crowdfunding offer stipulated under Paragraphs MAE-2.12.7 and MAE-2.12.8; There is no material adverse change relating to the equity crowdfunding offer during the offer period; and
            (ii) In the event of non-receipt of minimum subscription, all investors monies received must be refunded to the investors forthwith, but no later than 7 calendar days from the closing date of the equity crowdfunding offer.
            Added: October 2017

          • MAE-2.11.29

            The crowdfunding platform operator, subject to the approval of the CBB, may impose any other additional conditions before releasing the fund specified in Paragraph MAE-2.11.28, provided that they serve the investors' interest.

            Added: October 2017

        • Cooling-off Period

          • MAE-2.11.29A

            Crowdfunding platform operators must allow persons (whether natural or legal) who commit to invest through a crowdfunding platform, a minimum of 48 hours from the time the commitment is made, to withdraw the commitment. No fee or penalty must be charged to such persons if a commitment is withdrawn.

            Added: January 2019

        • Segregation of Client Assets

          • MAE-2.11.30

            A crowdfunding platform operator must maintain sufficient systems and procedures in respect of the handling of clients' money and assets, including but not limited to the requirement of maintaining books and records, segregation of the clients' money and assets and the risk management and internal controls systems to address this requirement.

            Added: October 2017

          • MAE-2.11.31

            A crowdfunding platform operator must hold client assets separate from its own at all times. The crowdfunding platform operator must, in connection with any clients' assets and funds received in the course of their business, establish and maintain separate client accounts, segregated from those used for their own accounts.

            Added: October 2017

        • Client Money

          • MAE-2.11.32

            A crowdfunding platform operator must hold client money in a separate client bank account. Client bank accounts may only be opened with banks licensed to do business in the Kingdom of Bahrain.

            Added: October 2017

        • Record-keeping

          • MAE-2.11.33

            A crowdfunding platform operator must ensure that proper records, sufficient to show and explain the crowdfunding platform operator's transactions and commitments in respect of its client assets are kept. These records must be retained for a period of a minimum of 10 years after they were made, unless otherwise required by law.

            Added: October 2017

        • Compliance

          • MAE-2.11.34

            A crowdfunding platform operator that hold or control client assets must arrange for their external auditor to report on the crowdfunding platform operator's compliance with the requirements related to the holding and segregation of the client's assets requirements.

            Added: October 2017

          • MAE-2.11.35

            The report referred to under Paragraph MAE-2.11.34 must be in line with the Agreed Upon Procedure provided by the CBB, and must be submitted to the CBB immediately whenever such report contains serious deficiencies and on a regular basis within 60 calendar days of the crowdfunding operator's financial year end.

            Added: October 2017

        • Share Register

          • MAE-2.11.36

            A crowdfunding platform operator must:

            (a) Establish a framework which sets out policies and procedures to perform the function of creation, maintenance and update of the share register;
            (b) Must provide the CBB on request as well as on a quarterly basis, a summary of the list of investors they maintain in the form required by the CBB; and
            (c) Be responsible for any loss or damage to the investor due to any inaccurate information or entries made in the share register.
            Added: October 2017

          • MAE-2.11.37

            The CBB may, by notice in writing, issue a direction to the crowdfunding platform operator, the board, chief executive, controller or any other person regarding—

            (a) Compliance with the requirements of the CBB Law, Rules and Regulations;
            (b) The conduct of business or operations of the equity crowdfunding market;
            (c) The appointment or removal of the approved persons;
            (d) Fees payable;
            (e) Restrictions on the types of investors or participants who may have access to an equity crowdfunding market;
            (f) The capital market products or Islamic capital market products that may be hosted on equity crowdfunding market;
            (g) The services that may be offered;
            (h) The requirement to notify the CBB of any changes to the equity crowdfunding platform operator's business;
            (i) The requirement to submit periodic reports to the CBB;
            (j) The requirement to maintain relevant records;
            (k) The requirement to submit to the CBB for its approval, any proposed rules or any proposed amendment to existing rules of the equity crowdfunding market; and
            (l) Any other matter as the CBB considers necessary for the protection of investor or the proper functioning of an equity crowdfunding market.
            Added: October 2017

          • MAE-2.11.38

            The CBB may, at any time, by notice in writing to a crowdfunding platform operator, vary any condition or restriction or impose such further condition or restriction as it may deem fit.

            Added: October 2017

          • MAE-2.11.39

            A crowdfunding platform operator must ensure that an equity crowdfunding issuer adheres to the requirements of equity crowdfunding offer as stipulated under Section MAE-2.12.

            Added: October 2017

    • MAE-2.12 MAE-2.12 Equity Crowdfunding Offer

      • MAE-2.12.1

        An equity crowdfunding issuer making an equity crowdfunding offer must comply with the rules stated under Section MAE-2.12 and is exempted from such requirements under Module OFS whereby requisite permission for public offering of equity securities is made to and approved by the CBB.

        Added: October 2017

      • MAE-2.12.2

        Equity crowdfunding offer must be exclusively made through a crowdfunding platform. An application for equity crowdfunding offer must only be made to and approved by a crowdfunding platform operator.

        Added: October 2017

      • MAE-2.12.3 MAE-2.12.3

        In order for the CBB to regard an offer as an equity crowdfunding offer, the equity crowdfunding issuer must meet the following conditions:

        (a) It must be a closed, private, family companies, entities engaged in real estate projects, start-up and small and medium size companies, incorporated either in Kingdom of Bahrain or elsewhere;
        (b) Ordinary shares fully paid and free from all encumbrances are issued as part of the offer;
        (c) The total amount raised from such offers within a 12 month period must not exceed BD 250,000, or equivalent amount in other currency, irrespective of the number of projects an equity crowdfunding issuer may seek funding for during the 12-month period. This limit is not applicable for entities engaged in real estate projects;
        (d) Entities engaged in real estate projects can raise up to BD 500,000, or equivalent amount in other currency, within a 12-month period, irrespective of the number of projects an equity crowdfunding issuer may seek funding for during the 12-month period;
        (e) Such offer is made only to accredited investors and/or expert investors; and
        (f) The use of the proceeds from equity crowdfunding offer must be for undertaking proposed business activities disclosed in the equity crowdfunding offering statement.
        Amended: January 2019
        Added: October 2017

        • Equity Crowdfunding Offering Statement Disclosure

          • MAE-2.12.4

            An equity crowdfunding issuer proposing to make an equity crowdfunding offer must submit an equity crowdfunding offering statement with all relevant information to the crowdfunding platform operator including the following:

            (a) The first page of the equity crowdfunding offering statement must contain the following particulars:
            (i) Full name and registration number of the equity crowdfunding issuer;
            (ii) Number and amount of ordinary shares to be offered: Face or par value of the ordinary shares;
            (iii) Offer Price
            (iv) Minimum Subscription limit; and
            (v) Standard disclaimer statement, written in capital letters and box framed, as follows:

            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 INSTITUTION LAW 2006 (DECREE LAW NO. 64 OF 2006). THIS OFFER IS MADE IN RELIANCE ON THE EXEMPTION UNDER SECTION OFS-1.4.1(e) OF MODULE OFS, CBB RULEBOOK VOLUME-6. THIS EQUITY CROWDFUNDING OFFERING STATEMENT AND RELATED OFFERING DOCUMENTS HAVE NOT BEEN AND WILL NOT BE REGISTERED AS A PROSPECTUS WITH THE CENTRAL BANK OF BAHRAIN (CBB). THE CBB HAS NOT REVIEWED, APPROVED OR REGISTERED THE EQUITY CROWDFUNDING OFFERING STATEMENT OR RELATED OFFERING DOCUMENTS AND IT HAS NOT IN ANY WAY CONSIDERED THE MERITS OF THE SECURITIES TO BE OFFERD FOR INVESTMENT, WHETHER IN OR OUTSIDE THE KINGDOM OF BAHRAIN.
            THE CENTRAL BANK OF BAHRAIN ASSUME NO RESPONSIBILITY FOR THE ACCURACY AND COMPLETENESS OF THE EQUITY CROWDFUNDING OFFERING STATEMENT AND INFORMATION CONTAINED IN THIS DOCUMENT AND EXPRESSLY DISCLAIM ANY LIABILITY WHATSOEVER FOR ANY LOSS HOWSOEVER ARISING FROM RELIANCE UPON THE WHOLE OR ANY PART OF THE CONTENTS OF THIS DOCUMENT
            (vi) Standard risk disclosure statement, written in capital letter and box framed, as follows:

            COMPANIES HOSTED ON EQUITY CROWDFUNDING PLATFORMS MAY CARRY HIGHER RISK WHEN COMPARED WITH LARGER OR MORE ESTABLISHED COMPANIES LISTED ON LICENSED EXCHANGES. IN PARTICULAR, COMPANIES MAY HOST ON EQUITY CROWDFUNDING PLATFORMS WITHOUT A TRACK RECORD OF PROFITABILITY AND THERE IS NO ASSURANCE THAT THERE WILL BE A LIQUID MARKET IN EQUITY SECURITIES HOSTED ON EQUITY CROWDFUNDING PLATFORMS. YOU SHOULD BE AWARE OF THE RISK OF INVESTING IN SUCH COMPANIES, INCLUDING THE RISK OF LOSING ALL OF YOUR INVESTMENT, AND SHOULD MAKE THE DECISION TO INVEST ONLY AFTER CAREFUL CONSIDERATION AND, IF APPROPRIATE, CONSULTATION WITH YOUR PROFESSIONAL ADVISER(S)
            (vii) If not disclosed on the front cover, the document should include on the inside cover the following declaration by those responsible for it (usually the Directors of the equity crowdfunding issuer):

            THE DIRECTORS OF THE COMPANY, WHOSE NAMES APPEAR HEREIN, ACCEPT RESPONSIBILITY FOR THE INFORMATION CONTAINED IN THIS DOCUMENT. TO THE BEST OF THE KNOWLEDGE AND BELIEF OF THE DIRECTORS, WHO HAVE TAKEN ALL REASONABLE CARE TO ENSURE THAT SUCH IS THE CASE, THE INFORMATION CONTAINED IN THIS DOCUMENTIS IN ACCORDANCE WITH THE FACTS AND CONTAINS NO OMMISSIONS LIKELY TO AFFECT THE IMPORTANCE AND COMPLETENESS OF THE DOCUMENT.
            (b) Information that explains the nature of business, key characteristics of the company and relevant risk factors;
            (c) Information that explains the purpose of the fund raising, the offer size and the closing date;
            (d) The price to the investors and the method for determining the price;
            (e) Information relating to the business plan of the company;
            (f) Information about management, directors and owners of 5 percent or more of the issue;
            (g) Related-party transactions;
            (h) The basis of allotment must be clearly stated and all investors must be treated equally in all aspect and in accordance with allotment basis;
            (i) Financial information relating to the company:
            (i) Audited financial statements of the company where the equity crowdfunding issuer has been established for at least 12 months; and
            (ii) Certified financial statements or information by the issuer's management where the equity crowdfunding issuer is newly established (less than 12 months period);
            (j) A roadmap that includes the proposed exit channels for investors and number of year to planned exit;
            (k) Disclose the fees that the crowdfunding platform operator is charging for its services and other expenses related to the equity crowdfunding offer; and
            (l) Where the equity crowdfunding issuer makes an Islamic crowdfunding offer, a copy of Shari'a Pronouncement report that the transaction is in compliance with the principles of Shari'a;
            (m) Information regarding the option to be availed in event of the equity crowdfunding offer is not fully subscribed but meets the minimum subscription requirement of 80%:
            (i) All monies shall be refunded to investors; or
            (ii) Provide details of the means by which the shortfall in subscription money shall be funded
            (n) Applicable governing law;
            (o) In case of overseas equity crowdfunding issuers, various risk factors associated with cross border transactions;
            (p) The equity crowdfunding offering statement must be submitted in Arabic and/or English language.
            Added: October 2017

          • MAE-2.12.5

            An equity crowdfunding issuer proposing to be hosted on a crowdfunding platform:

            (a) Must ensure that all information submitted or disclosed to the crowdfunding platform operator is true and accurate and shall not contain any information or statement which is false or misleading or from which there is a material omission;
            (b) Amend its equity crowdfunding offering statement to disclose changes, addition or update to information already furnished. An amendment is required for changes, addition or updates that are material;
            (c) Enter into a share subscription agreement with the investors. A share subscription agreement is an agreement between the investors and the equity crowdfunding issuer, under which each investor agrees to purchase ordinary shares fully paid and free from all encumbrances from the equity crowdfunding issuer pursuant to terms specified therein and the equity crowdfunding offering statement.
            Added: October 2017

        • Offer Period

          • MAE-2.12.6

            The offer period for an equity crowdfunding offer must not be less than 10 calendar days after the day of commencement of the offer and must not exceed a maximum period of 3 months.

            Added: October 2017

        • Minimum Subscription

          • MAE-2.12.7

            The minimum subscription to be received in an equity crowdfunding offer must not be less than 80% of the equity crowdfunding offer size. In the event of non-receipt of minimum subscription, all subscription monies received shall be refunded to the investors forthwith, but no later than 7 calendar days of the closing date of the equity crowdfunding offer.

            Added: October 2017

          • MAE-2.12.8

            Where the equity crowdfunding offer is not fully subscribed but meets the minimum subscription requirement specified under Paragraph MAE-2.12.7, the equity crowdfunding issuer may either;

            (i) Seek transfer and utilization of funds collected, provided adequate disclosures regarding the means by which the shortfall in subscription money shall be funded, is made in the equity crowdfunding offering statement; or
            (ii) Refund all monies paid by investors in respect of the equity crowdfunding offer. The crowdfunding platform operator must refund the subscription money to investors no later than 7 calendar days from the closing date of the equity crowdfunding offer.
            Added: October 2017

        • Investment Commitment

          • MAE-2.12.9

            An investor that has signed the share subscription agreement with the equity crowdfunding issuer must contribute their committed

            Investment into the designated separate bank account held with a licensed retail bank no later than the closing date of subscription period.

            Added: October 2017

          • MAE-2.12.10

            An investor may cancel or amend an investment commitment until the end of the closing date of subscription period.

            Added: October 2017

          • MAE-2.12.11

            If there is any material adverse change, an equity crowdfunding issuer must notify of such change to potential investors and seek a reconfirmation of investment commitment.

            Added: October 2017

        • Oversubscription

          • MAE-2.12.12

            If an equity crowdfunding offer is over-subscribed after the closing of the offering period, the equity crowdfunding issuer must make allotment in accordance with the pre-determined basis which must be described in the equity crowdfunding offering statement. No allotment shall be made by the equity crowdfunding issuer in excess of the offer size stated in the equity crowdfunding offering statement.

            Added: October 2017

        • Allotment, Dispatch and Refund

          • MAE-2.12.13

            An equity crowdfunding issuer must allot or allocate, in accordance with the allotment basis stipulated in the equity crowdfunding offering statement, ordinary shares within 4 calendar days from closing date.

            Added: October 2017

          • MAE-2.12.14

            The equity crowdfunding issuer must refund the excess subscription money and dispatch ordinary shares within a maximum of 7 calendar days from the closing date.

            Added: October 2017

        • Reporting Requirements

          • MAE-2.12.15

            An equity crowdfunding issuer must provide on a semi-annual basis, to it investors, the crowdfunding platform operator on which it is hosted and the CBB a performance progress report. The semi-annual report is to be provided as of 30th June and 31st December and must be provided to the investors, the crowdfunding platform operator and the CBB within three months of the reporting period.

            Added: October 2017

          • MAE-2.12.16

            Equity crowdfunding issuers, other than entities engaged in real estate projects, must provide the following information in the report required under Paragraph MAE-2.12.15:

            (i) Update of development at company:
            (a) Report on any strategic or organizational changes since last report.
            (b) Business review and future plans.
            (ii) Disclosure of financial result: Reviewed quarterly or audited annual financial statements.
            (iii) Information about the board members and members of senior management.
            (iv) Litigation or disputes: Disclosure of any claims brought against the equity crowdfunding issuer or any complaint brought by investors or any investigation by regulatory bodies against the concerned equity crowdfunding issuer, their directors and management.
            (v) Board Resolution: Briefing on resolutions passed by the board.
            (vi) Pledging or sale of assets of, or acquisition of additional debt by the equity crowdfunding issuer:
            (a) Details of any charges or pledges created over the assets of the equity crowdfunding issuer, or sales of assets and whether such sales or pledges are consistent with the disclosure made in the original disclosure statement.
            (b) Details of any additional debt facilities undertaken by the equity crowdfunding issuer and the amount drawn down.
            Added: October 2017

          • MAE-2.12.17

            Equity crowdfunding issuers engaged in real estate projects, must provide the following information in the report required under Paragraph MAE-2.12.15:

            (i) Update of onsite development of projects:
            A. Original development plan and its deliverables and milestones and any amendments thereon.
            B. Report on physical progress made since last report.
            C. Report on any official planning or other permission obtained or outstanding.
            D. Next step and anticipated completion date.
            (ii) Utilisation of Proceeds: Report of amount spent during the preceding 6 months period and on a cumulative basis, and identification of the recipients of material amounts (10% or above) of such amount spent. This would include payments made to any related party of the equity crowdfunding issuer.
            (iii) Disclosure of financial result: Reviewed quarterly or audited annual financial statements.
            (iv) Information about the board members and members of senior management.
            (v) Litigation or disputes: Disclosure of any claims brought against the equity crowdfunding issuer or any complaint brought by investors or any investigation by regulatory bodies against the concerned equity crowdfunding issuer, their directors and management.
            (vi) Board Resolution: Briefing on resolutions passed by the board
            (vii) Pledging or sale of assets of, or acquisition of additional debt by the equity crowdfunding issuer:
            A. Details of any charges or pledges created over the assets of the equity crowdfunding issuer, or sales of assets and whether such sales or pledges are consistent with the disclosure made in the original equity crowdfunding offering statement.
            B. Details of any additional debt facilities undertaken by the equity crowdfunding issuer and the amount drawn down.
            Added: October 2017

        • Limits on Advertising

          • MAE-2.12.18

            An equity crowdfunding issuer must not advertise the terms of an equity crowdfunding offer except in a notice that directs investors to the crowdfunding platform and includes no more than the following information:

            (i) A statement that the equity crowdfunding issuer is conducting an equity crowdfunding offer pursuant to Section MAE-2.12 of Module MAE, CBB Rulebook Volume 6, the name of the crowdfunding platform operator through which the equity crowdfunding offer is being conducted, and a link directing the potential investor to the crowdfunding platform;
            (ii) The terms of the equity crowdfunding offer, which means the amount of ordinary shares offered, the nature of the ordinary shares, the price of the ordinary shares, and the closing date of the offering period; and
            (iii) Factual information about the legal identity and business location of the equity crowdfunding issuer, limited to the name of the equity crowdfunding issuer, the address, phone number, and website of the equity crowdfunding issuer, the e-mail address of a representative of the equity crowdfunding issuer, and a brief description of the business.
            Added: October 2017

          • MAE-2.12.19

            Advertising the terms of the equity crowdfunding offer off the crowdfunding platform is limited to a brief notice. However, an equity crowdfunding issuer may communicate with investors and potential investors about the terms of the equity crowdfunding offer through communication channels provided on the crowdfunding platform. An equity crowdfunding issuer must identify itself as the issuer and persons acting on behalf of the equity crowdfunding issuer must identify their affiliation with the equity crowdfunding issuer in all communications on the crowdfunding platform.

            Added: October 2017

          • MAE-2.12.20

            The following statement, in bold, must be included in all advertisements specified under Paragraph MAE-2.12.19.

            "THIS EQUITY CROWDFUNDING OFFER IS MADE ONLY TO ACCREDITED INVESTORS AND/OR EXPERT INVESTORS. THE CBB HAS NOT ASSESSED, REVIEWED OR APPROVED THIS EQUITY CROWDFUNDING OFFER."

            Added: October 2017