• CSD-1.5 CSD-1.5 Power to Stop Commencement or Order Cessation

    • CSD-1.5.1

      The CBB may order a person who has applied under rule CSD-1.1.1 not to establish or commence operation of a clearing or depository facility if:

      (a) The person did not furnish the CBB with such information or documents as required under rule CSD-1.2.3 of this Module;
      (b) Any information or document provided by the person to the CBB is or proves to be false or misleading; or
      (c) The CBB is of the opinion that it is in the interests of the capital market or financial sector.

    • CSD-1.5.2

      The CBB may, by notice in writing, order a licensed clearing house or central depository to cease operating its clearing or depository facility if:

      (a) It has contravened any provision of the CBB Law, or any other law or rule in the course of operating its clearing facility;
      (b) It has not complied with any of the licensing requirements contained in this Module;
      (c) It provided any information or document to the CBB that is false or misleading;
      (d) In the opinion of the CBB, it is operating the clearing or depository facility in a manner that is likely to pose systemic risk to the financial system of Bahrain;
      (e) It is in the course of being wound up or otherwise dissolved, whether in Bahrain or elsewhere;
      (f) A receiver, a receiver and manager, or an equivalent person has been appointed, whether in Bahrain or elsewhere, in relation to or in respect of any property of the licensed clearing house or central depository;
      (g) It has been convicted, whether in Bahrain or elsewhere, of an offence involving fraud or dishonesty, or the conviction for which involved a finding that it had acted fraudulently or dishonestly; or
      (h) The CBB is of the opinion that it is in the interests of the public to do so.

    • CSD-1.5.3

      The CBB shall give notice in the Official Gazette of any order made under rule CSD-1.5.2.

    • CSD-1.5.4

      Subject to CSD-1.5.5, the CBB shall not make an order under rule CSD-1.5.1 or rule CSD-1.5.2 without giving the person an opportunity to be heard.

    • CSD-1.5.5

      The CBB may order a person not to establish or commence operation of a clearing or central depository facility under rule CSD-1.5.1, or to cease operating its clearing or central depository facility under rule CSD-1.5.2 on any of the following grounds without giving the person an opportunity to be heard:

      (a) The person is in the course of being wound up or otherwise dissolved, whether in Bahrain or elsewhere;
      (b) A receiver, a receiver and manager, or an equivalent person has been appointed, whether in Bahrain or elsewhere, in relation to or in respect of any property of the person;
      (c) The person has been convicted, whether in Bahrain or elsewhere, of an offence involving fraud or dishonesty, or the conviction for which involved a finding that it had acted fraudulently or dishonestly.

    • CSD-1.5.6

      The CBB may direct, by notice in writing, a licensed clearing house or licensed central depository, to whom an order to cease operations of its clearing facility has been made by the CBB under rule CSD-1.5.2, to take such action as it considers necessary, including any of the following actions:

      (a) Ordering the liquidation of all positions or part thereof, or the reduction in such positions;
      (b) Altering conditions of delivery of transactions cleared or settled, or to be cleared or settled through the clearing or depository facility;
      (c) Fixing the settlement price at which transactions are to be liquidated;
      (d) Requiring margins or additional margins for transactions cleared or settled or to be cleared or settled through the clearing or depository facility;
      (e) Modifying or suspending any of the business rules of the licensed clearing house or licensed central depository; or
      (f) Transferring the rights and obligations of that licensed clearing house or licensed central depository to another licensed clearing house and licensed central depository; and

      the licensed clearing house or licensed central depository shall comply with that direction.

      Amended: April 2016

    • CSD-1.5.7

      The CBB may modify any action taken by a licensed clearing house or licensed central depository, including the setting aside of that action.

      Amended: April 2016

    • CSD-1.5.8

      Any order made under rule CSD-1.5.2 shall not operate so as to:

      (a) Avoid or affect any agreement, transaction or arrangement entered into in connection with the use of a clearing facility operated by the person, whether the agreement, transaction or arrangement was entered into before or after the order of the cessation; or
      (b) Affect any right, obligation or liability arising under such agreement, transaction or arrangement.